The Luxembourg government and various trade unions agreed at a meeting on Tuesday to extend the partial unemployment measure until the end of 2020.

Under the joint chairmanship of Dan Kersch, Minister of Labour, Employment and the Social and Solidarity Economy, and Franz Fayot, Minister of the Economy, the social partners represented on the one hand by Nora Back, President of the OGBL union, and Patrick Dury, President of the LCGB union, and on the other hand by Nicolas Buck, President of the UEL, agreed on the new modalities granting partial unemployment to companies affected by the COVID-19 crisis.

With the end of the state of emergency, on 24 June 2020, the emergency procedures put in place to help companies by means of partial unemployment due to force majeure will expire. It was agreed at this meeting that companies affected by the health crisis must continue to be supported through partial unemployment, while preserving as many jobs as possible.

Considering that several companies will continue to suffer from the negative effects of the health crisis beyond the end of the state of emergency, the various partners decided to continue supporting these businesses through partial unemployment until the end of the current year.

In order to take into account the fact that certain sectors have been more severely affected and will either delay returning to the same level of activity as before the health crisis or will not achieve it in the near future, four possible ways of being able to benefit from the partial unemployment have been agreed upon:

  • Industrial companies will continue to benefit from the cyclical partial unemployment scheme in order to be able to react to disturbances in international markets. By applying the partial unemployment scheme from cyclical sources, industrial companies undertake not to lay off workers for economic reasons;
  • The social partners have recognised the particularly difficult situation of companies in vulnerable sectors which remain strongly affected by the COVID-19 crisis. Companies in the Horeca, tourism and event sectors will therefore be able to benefit from accelerated access to partial unemployment from a structural source, without limiting the number of employees who will be entitled to it. In the event of proven need, these companies will be able to resort to economic redundancies within the maximum limit of 25% of their employees until 31 December 2020, by analogy to the provisions envisaged within the framework of the bill aiming to set up a fund stimulus and solidarity for businesses;
  • The social partners have explicitly insisted on the fact that the common law provisions provided for by the Labour Code concerning in particular collective dismissal remain fully applicable;
  • The social partners have agreed that in the event of a return to better fortunes, the companies which have carried out redundancies must, in the event of subsequent recruitment of staff, re-hire in priority their former dismissed employees;
  • Companies affected by the health crisis, other than industrial companies and those in vulnerable sectors, may also have recourse to short-time working from structural sources by the accelerated route provided, however, that they do not lay off workers. This measure aims to preserve jobs in the companies concerned as well as possible. In this case, however, the number of employees covered by partial unemployment may not exceed 25% of the workforce for the months of July and August, 20% for the months of September and October and 15% for the months of November and December. In this context, the term employee refers to each employee who has been declared partially unemployed during the current month, regardless of the number of hours of partial unemployment;
  • Finally, the demands of companies in vulnerable sectors dismissing more than 25% of their workforce as well as those of all other companies wanting to make redundancies will have to submit a so-called “traditional” request for partial unemployment. In fact, it has been agreed in these situations that admission to the partial unemployment scheme can only be granted if the companies draw up restructuring plans, in the form of a recovery plan in the case of small businesses (fewer than fifteen people) or a job retention plan for companies employing more than fifteen employees.

All of these partial unemployment proposals were approved by the Government Cabinet on Wednesday.

The Economic Committee also retains the right to reject requests from companies which are clearly not affected at all or only slightly affected by the health crisis.

The secretariat of the Economic Committee, in collaboration with the services of the Government IT Centre and ADEM, is currently in the process of implementing computer applications to submit requests via the myGuichet.lu platform. Precise information for companies, staff and employee delegations will be quickly prepared and made available to them on the Guichet.lu website.