Directive n°2019/1152 voted by the European Parliament on 20 June 2019 (the “Directive”) is part of the European Parliament’s desire to require employers to fully inform all workers of their working conditions at the time of recruitment, or very shortly thereafter. The Directive was transposed into Luxembourg law by a law of 24 July 2024, which came into force on 4 August this year (the “Law”).
Although the Law is not revolutionary in terms of the amount of compulsory information to be provided (the Labour Code (the “Code”) already contains numerous provisions in this respect), it does introduce a number of new features, particularly with a view to protecting the rights of employees on fixed-term and/or part-time contracts, as well as new subtleties and, above all, fines for employers who fail to comply with their information obligations. We therefore consider it appropriate to advise you of the main provisions of the Law to enable you to assess the need to amend your current contractual documentation.
Affected workers
The Law covers all workers employed by Luxembourg employers. Thus, while it excludes the self-employed, its provisions apply to employees, apprentices, students and pupils (and even civil servants).
Terms and conditions
Notwithstanding the provisions of this Law, the principle of a contract (of employment, apprenticeship, student/pupil) drawn up in writing prior to or at the time of the employee’s commencement date will remain intact in Luxembourg law. However, the Law adds new procedures for unilateral information to be provided, whether at the start of the employment relationship or during it (for example, in the event of the employee’s departure abroad or in the event of a unilateral amendment to the employment contract).
While these extended information obligations mainly take the form of additional mandatory information that must be included in the contract between the employer and the employee, the Law provides that an employer acting in good faith may communicate certain information essential to the employment relationship to the employee in writing after the employee has commenced work. The Law provides the employer with two-time limits (i.e., seven days or one month from the employee’s request, depending on the nature of the request) to fulfil its obligations as regards the contractual documentation to be exchanged with the employee. The deadline will depend on the nature of the missing information (for example, seven days to confirm the place of work, and one month to confirm the amount of paid leave). The mere coexistence of the previous provisions of employment law and those of the Law introducing new procedures and subtleties is bound to generate litigation in the years to come, particularly because of the responsibility the Law places on employers.
New information to be included and changes to be respected
The Law requires employers to include new information in their employees’ contracts (including the full amount of additional pay and benefits, how overtime is to be compensated, and the procedure for terminating the contractual relationship) and in the documentation to be sent to employees who leave to work abroad for more than four consecutive weeks.
New Regimes
With regard specifically to employees, two important contributions of the Law should be mentioned:
- Probationary period clauses
The law now regulates the duration of the probationary period in a fixed-term contract. New article L. 122-11 (1) paragraph 3 of the Code stipulates that the probationary period cannot be less than two weeks or exceed a quarter of the fixed term set out in the contract (or the minimum duration where applicable).
- Exclusivity clauses
New article L. 121-4 (8) of the Code prohibits, in principle, exclusivity clauses preventing an employee or apprentice from having multiple jobs. However, the same article provides for exceptions where such multiple employment can be prohibited by the employer on objective grounds, whether this justification is provided ab initio or is the subject of a dispute. These grounds include, for example, the health and safety of the employee at work, the imperative need for confidentiality, or conflicts of interest.
New rights
The Law introduces two new rights for employees:
- The right to switch to a more secure and predictable form of employment: here the Law complements existing arrangements by covering scenarios where (i) part-time employees ask to work full-time, and (ii) employees on fixed-term contracts ask to be converted to permanent contracts. Once the agreed probationary period has expired and provided, they have been working for the same employer for at least six months, these employees will be able to make such a request to their employer once a year. The employer will have a period of one month from the date of this request to either amend the contract, or to send the employee the detailed reasons justifying refusal.
- The right to free compulsory training courses that employers must provide for their employees.
Penalties
The employer’s breaches of the Law may be subject to both civil and criminal penalties. The Luxembourg legislator has provided for criminal fines of up to 10,000 euros if the employer is a legal entity, it being understood that these fines may be cumulative.
The Law also provides for sanctions against employers who, faced with requests for regularisation from workers, retaliate against them.
Conclusions
While new employment contracts must comply with the provisions of the Law, contracts signed before 4 August 2024 will not necessarily have to be updated, as the Law does not impose any obligation to sign an amendment unless the workers concerned request one. The Law will also require certain collective agreements to be brought into line.
