The collective agreement is an agreement concluded between employers and employees in a company or in a sector of activity.
It enables the regulations of the labour laws to be adapted to the needs and specific requirements of a company or a sector of activity (i.e. industry, finance, etc.).
Any collective agreement must be negotiated between social partners according to certain formalities and filed with the Inspectorate of Labour and Mines (Inspection du Travail et des Mines - ITM) for approval by the Minister of Labour and Employment.
There are 2 types of collective agreements:
- standard collective agreements negotiated between an employer or a group of businesses (or their representatives) and a trade union;
- collective agreements declared mandatory by a grand-ducal regulation and which are applicable to all employers and employees of the profession concerned.
A collective labour agreement is negotiated by a negotiation committee consisting of:
- the employer (or the employers where the negotiation is taking place within the framework of an employer organisation or a group of businesses active in the same field or profession);
- the trade unions recognised as the general national representatives or the sectoral representatives.
They may allow or refuse, by unanimous decision, other unions to join the negotiation committee. In any case, a copy of their decision must be sent to the Minister of Labour and Employment as well as to the Inspectorate of Labour and Mines (ITM);
- the union(s) having alone or together obtained at least 50 % of the votes during the last elections for the staff delegations in the businesses affected by the negotiation.
If they want to take part in the negotiations, they must apply for it; the negotiation committee must process the application within 7 days of receipt.
Before negotiating a standard collective agreement, the employer must ensure that he is not subject to a mandatory collective agreement.
In order to negotiate and sign the collective agreements, the unions representing employees must be independent of the signatory employers' contracting partners. This means that they must have an organisational independence, as well as financial autonomy, with regard to the signatory employer (or employers) of the collective agreement, and that they must provide evidence thereof.
- defend the work-related interests of their members;
- provide collective representation for their members;
- improve their working conditions.
Scope of collective agreements
The collective labour agreement is a regulation which applies in a uniform manner to all employees in a business or a specific group of businesses, with the exception of senior management. However, it is possible to negotiate and sign a collective agreement which applies exclusively to this category of personnel or extend the application of an existing collective agreement to senior management.
The following are considered to be senior management :
- employees whose salary is significantly higher than the salaries paid to the staff covered by the collective agreement and;
- where the salary forms the counterpart in exchange for a true and effective power of management and;
employees who benefit from:
- independence in the organisation of their work and;
- a large flexibility in their working hours.
The collective agreement enables the regulations of the labour laws to be adapted to the needs and specific nature of each sector of activity, notably with regard to the organisation (factories requiring 24/7 operation, fixed-hour office work, workers active in the leisure business working on non-working days, etc.) and work constraints (night work, etc.).
In any case, the provisions of the collective agreement must be favourable to the employees; if these provisions either worsen the conditions for employees with regard to the law or limit their rights, they are declared null and void and have no effect.
Negotiating a collective agreement
The request for collective negotiations must be notified in writing:
- either by the trade unions representing the employees;
- or by the employer of the business concerned.
The party which is invited to negotiate is legally required to enter into the negotiations.
Negotiations must begin within 30 days of the notification request.
However, an employer who is invited to negotiate but who wishes to negotiate the agreement together with an organisation of employers or group of businesses in the same profession or activity may inform the unions thereof within 15 days of the notification request.
In this case, negotiations must begin within 60 days of the employer's wish to negotiate at another level.
Topics which entail an obligation of result
The aim of the collective agreement is to establish the working and employment conditions for employees. Negotiations must reach an agreement on the following topics:
- conditions of employment and departure of employees, including appropriate welcome and introductory measures for the concerned positions to be filled;
- duration of work and its organisation, overtime, as well as daily and weekly rest periods;
- public holidays;
- leave of absence, including annual leave;
- the remuneration system, as well as the salary premiums per professional job category.
A collective agreement must cover the following topics:
- premiums for night work which must represent at least 15 % of the normal hourly wages;
- premiums for difficult, dangerous and unsanitary work;
- conditions under which the principle of equality of remuneration between men and women will be applied;
- terms regarding the fight against sexual and moral harrassment and the disciplinary sanctions which may result from such action;
- terms regarding continuous vocational training for employees that are absent due to a career break (maternity leave, parental leave, sabbatical, etc.). Businesses must provide continuous vocational training for their employees to ensure their up-to-date professional development, namely regarding technical aspects and production procedures.
When a collective agreement covers a specific business sector, a specific branch or several businesses, the working and employment conditions may be established in each company by an agreement between the business and its social partners. In this case, the collective agreement will state the terms of enforcement with regard to the working and employment conditions in each business.
Topics which do not entail an obligation of result
The members of the negotiation committee must also discuss certain topics where they are not required to reach an agreement:
the organisation of working hours, notably regarding:
- reference periods used for the calculation of the duration of work;
- reduction of working time;
- reduction of overtime;
- development of part-time work;
- career breaks;
the training policy of the business, sector of activity or branch of activities, notably regarding:
- the development of possibilities for training, work experience, apprenticeships or other measures which facilitate access to employment;
- the development of lifelong training possibilities;
- the efforts made for maintaining or developing employment, notably for employees over 45 years of age;
the implementation of the principle of equal treatment of men and women, in particular:
- setting up an equality model regarding employment and salaries;
- making businesses and continuous vocational training accessible to people who wish to reintegrate the job market after a career break.
Whether an agreement was reached or not, the collective agreement must state:
- that the different topics laid down in the law have been discussed;
- whether or not decisions have been taken on these subjects;
- what decisions have been taken, if applicable.
When a collective agreement covers a sector of activities, a branch of activities or several businesses, these different topics may subsequently be defined in each company by an agreement between the business and its social partners. In this case, the collective agreement will state the implementation procedures for these topics in each business.
Approving a collective agreement
Signing the collective agreement
For it to be valid, the collective agreement must be signed by all parties represented in the negotiation committee.
However, if in the negotiation committee, one or more unions decide not to sign the agreement, the remaining unions may announce that they will sign the collective agreement exclusively. In this case, the signatory unions have 8 days to invite the other contracting unions to sign.
The other contracting unions must communicate their decision to sign or not within 8 days following the invitation to sign.
After the communication of their decision and if all the unions in the negotiation committee have still not reached an agreement, one or more of the signatory unions have 8 days to refer the case to the Minister of Labour and Employment.
If the Minister finds that they have collected at least 50% of the votes during the last election for staff delegation in the concerned companies, he will allow them to sign the collective agreement.
The collective labour agreement and the collective agreements which are related thereto must state:
- the names of the parties taking part in the negotiation of the agreement;
- the name and position of the person representing each party;
- its scope of application, at a professional and geographical level, including the categories of non-affected personnel;
- the date of its entry into force;
- its duration;
- the deadline for its termination.
Lodging and publicising a collective agreement
When signed, a collective agreement must be lodged with the Inspectorate of Labour and Mines (Inspection du Travail et des Mines - ITM) by one of the negotiating parties.
Following the recommendation of the Inspectorate of Labour and Mines (ITM) and within 15 days of its deposit, the Ministry of Labour will rule on whether or not the collective agreement is accepted and valid. The decision will be communicated to all parties concerned and published in the Mémorial B (official journal).
When the collective agreement has been lodged and accepted, it comes into force the day after its lodging with the Inspectorate of Labour and Mines, unless stated otherwise in the agreement.
From the date it enters into force, the duration of a collective agreement is:
- 6 months minimum;
- 3 years maximum.
Terminating a collective agreement
In order to renegociate a collective agreement, in part or in its integrity, the social partners must request its termination by respecting the notice period established in the collective agreement (maximum 3-month notice period).
The termination request must be notified in writing. It is a request to open new negotiations.
A copy of the termination request letter must be sent to the ITM without delay.
Negotiations must in any case begin at the latest 6 weeks before the agreement or the provisions to be renegotiated come to term.
If the parties concerned agree on the need to renegotiate some provisions only, they must state this in a written document establishing which of the provisions should be terminated.
A copy of this document must be sent to the Ministry of Labour and the ITM without delay.
The terminatied collective agreement is not applied anymore:
- as soon as a new agreement enters into force;
- at the latest, on the 1st day of the 12th month following the termination request.
If there has been no request for termination of the collective agreement (or some of its dispositions) before its end date, it will be extended for an undetermined period of time. It may be subsequently terminated while respecting the notice period set out in the agreement.