Advantages of a job protection plan

This page was last modified on 26-02-2016

A job protection plan comes within the scope of the job protection policy. The aim of a job protection plan is to proactively manage the effects of planned restructuring measures.

A job protection plan, approved by the Minister of Labour, Employment and the Social and Solidarity Economy, enables businesses to benefit from a certain number of instruments or from better terms to implement certain instruments.

Who is concerned

Every business who intends to implement a job protection plan approved by the Minister of Labour, Employment and the Social and Solidarity Economy.

Prerequisites

In order to benefit from the additional advantages provided by a job protection plan, the business must have its job protection plan approved by the Minister of Labour, Employment and the Social and Solidarity Economy.

How to proceed

Re-employment support for the temporary supply of manpower

A business that has concluded a job protection plan approved by the Minister of Labour, Employment and the Social and Solidarity Economy can resort to the temporary supply of manpower (labour leasing) provided it is foreseen by the job protection plan.

In this case, the business concerned will benefit from a specific application of re-employment support:

  • the source business continues to pay the full salaries normally paid to the workers who are "leased out" to the host business;
  • the host business pays an agreed allowance to the source business;
  • the Employment Fund (Fonds pour l'emploi) pays re-employment support to the source business for the amount of the residual cost, i.e. the difference between the above allowance and 90 % of the reference salary of the workers concerned.

The sum of the allowance and the re-employment support may not exceed 350 % of the social minimum wage.

The Employment Fund pays re-employment support for the temporary loan of manpower for a maximum period of 4 years.

Partial reimbursement of costs relating to early retirement (préretraite)

In principle, the company's contributions to the costs incurred by early retirement due to company restructuring (préretraite-ajustement) is between 30 % and 75 % of the early retirement benefits paid to the employee, including the employer's share of the social security contributions.

In the context of a job protection plan and subject to the approval of the Minister of Labour, Employment and the Social and Solidarity Economy, the Economic Committee (Comité de conjoncture) can allow a rate of contribution of less than 30 %.

Recruitment aid for older unemployed workers coming from a business with a job protection plan

Workers aged 40 or more who are impacted by a job protection plan approved by the Minister of Labour, Employment and the Social and Solidarity Economy do not need to register with ADEM in order to benefit from recruitment aid for older unemployed workers.

Private sector employers who hire workers from another business with a job protection plan are entitled to request the reimbursement of social security contributions from the Employment Fund (the employer's contributions and the insured's contributions) without having to wait for said workers to have been registered with ADEM between one and 3 months.

For unemployed workers aged 40 or more, social security contributions can be reimbursed during 3 years.

For unemployed workers aged 45 or more, social security contributions can be reimbursed until their retirement.

Subsidies for external audits of a business

In order to determine the need of a job protection plan, the secretariat of the Economic Committee may be asked to carry out an in-depth evaluation of the economic, financial and social situation of the business.

If the business agrees to it, the evaluation can be carried out by an external expert. In this case, the Employment Fund can partially cover the expert's fees.

Subsidy for retraining employees

Within the context of a retraining enabling employees to change their jobs, the Employment Fund may also cover up to:

  • 50 % of training fees (including salaries, social security contributions and ancillary costs) for training aimed at facilitating the redeployment of employees within the business;
  • 80 % of training fees (including salaries, social security contributions and ancillary costs) for training aimed at facilitating the redeployment of employees outside the business.
If the business is authorised to resort to short-time working due to structural economic problems, the State will reimburse 90 % of the salaries normally paid (excluding social security contributions) for inactive hours during which employees take part in vocational training courses. This measure may prove to be more advantageous. In this case, the Employment Fund will only reimburse 50 % of the ancillary costs (e.g. registration fees) incurred as a result of training.

In order to be reimbursed experts and training fees, the business must send an invoice concerning the measures implemented to the Minister of Labour, Employment and the Social and Solidarity Economy.

Temporary job protection measures

Until 31 December 2016, the State will cover all compensation payments (as from the first hour of inactivity) made within the framework of short-time working due to structural economic problems, provided that the business has concluded a job protection plan with the staff delegation and that this plan has been approved by the Ministry of Labour, Employment and the Social and Solidarity Economy.

Non-accumulation rules

The financial aid received for training employees under the different short-time working schemes or under a job protection plan cannot be combined with financial aid for continuing vocational training granted by the Ministry of Education, Children and Youth.

Therefore, the business must not include any salary costs already subsidised as training measures in the context of short-time working or a job protection plan when applying to the Ministry of Education, Children and Youth for financial aid for continuing vocational training. If it does, these applications may be rejected in full.

Only registration fees and ancillary costs may be included in these applications, provided that they have not already been reimbursed under a job protection plan.

The Ministry of Labour and Employment will inform the Ministry of Education, Children and Youth of all the financial aid received for training employees under the various short-time working schemes or under a job protection plan.

Temporary job protection measures

Until 31 December 2017, short-time working schemes may also be made available to businesses that do not belong to a sector declared to be in crisis if the business:

  • finds its work hours have been reduced by at least 40 %;
  • and has an approved job protection plan in place or another agreement between the social partners at the appropriate level.

Who to contact

Ministry of the Economy
19-21, boulevard Royal
L-2914 - Luxembourg
Luxembourg
Phone: (+352) 247-82478
Fax: (+352) 46 04 48
Email info@cdc.public.lu