Disputing a dismissal before the Labour tribunal

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In the event of a dispute relating to an employment contract, and in particular when an employee wishes to dispute their dismissal to obtain damages for unfair dismissal (except in the case of an out-of-court arrangement with their employer), the dispute is brought before the competent Labour tribunal, namely those of Esch-sur-Alzette, Luxembourg or Diekirch. The competent Labour tribunal will in theory be the one nearest the employee's place of work.

Who is concerned

The following workers may dispute their dismissal before the Labour tribunal in order to obtain damages for wrongful dismissal:

  • workers dismissed with immediate effect for serious misconduct;
  • workers dismissed with notice for a personal or economic reason (including in cases of collective redundancy, except when the dismissed worker has accepted a redundancy plan by signing a transaction agreement).

Workers may also use their unfair dismissal action to claim back-pay, etc. The Labour tribunal has the authority to hear all disputes relating to employment contracts and apprenticeship contracts, including disputes that occur after the term of the employment contract.

Apprentices may also take legal action against their training employer in the event of an arbitrary termination of an apprenticeship contract.

Serious misconduct is considered to be any fact or fault which immediately and irreparably renders it impossible to maintain or carry on a working relationship. (Article L.124-10 (2) of the Labour code).

Staff representatives (Articles L.415-11 and L.425-4 of the Labour code) and female workers who have been medically confirmed to be pregnant, and for 12 weeks following the birth (Article L.337-1 of the Labor code), are protected from dismissal. However, in the event of serious misconduct, the employer may immediately suspend the worker pending the Labour court's decision in response to their request to terminate the employment contract. However, the employer may not send a dismissal letter on their own initiative. In this case, the dismissal would be null. The employer must file a petition to terminate the employment contract with the competent Labour tribunal in order to be authorised to break the employment contract of these protected workers. Only a case of serious misconduct under the law thus justifies filing a legal petition to terminate the employment contract of these protected workers.

Deadlines

Employees who wish to challenge their employer before the Labour tribunal have 3 months to file a petition.

This 3-month interval begins as of:

  • the date of notification of the dismissal, in the event of a dismissal with immediate effect;
  • the date of notification of the dismissal with notice, if the dismissed employee has not requested the grounds for their dismissal;
  • the date of receipt of the letter of motivation, if the worker dismissed with notice asked for the grounds for dismissal and the employer notified them of said grounds during the one-month period allotted by law;
  • the date the employer should have responded to the employee's request for the grounds of dismissal (within one month of receiving the request) but did not.

The 3-month term is interrupted if the worker submits a written claim to their employer. In that case, a new period of one year begins to elapse as of the date of the written dispute. The 3-month period will not be properly interrupted if the worker has disputed their dismissal in letter requesting the grounds for dismissal (insofar as the request was made within the legal time limit of one month).

In order to be able to interrupt the 3-month waiting period, the claim must be sent by the worker, or their representative, to the actual employer. If it is sent to a third party, it will have no effect. However, the employer's attorney should not be considered a third party if appointed by the employer to defend their interests in the matter brought by the employee concerned. In their claim, the employee must clearly indicate that they are disputing a dismissal.

The 3-month period does not elapse if the employer has verbally dismissed the worker. A verbal dismissal will be declared unfair by the Labour tribunal.

How to proceed

Form and content of the petition

Form of the petition ("petition on the merits")

The petition must be in the form of a reasoned written request which presents the circumstances of the matter that would make the dismissal wrongful or unfair, and indicates the amounts that the worker wishes to obtain from their employer as compensation for the damage suffered due to the so-called unfair dismissal.

This petition may be drafted by either the employee or their lawyer. However, when an employee takes legal action against their employer for unfair dismissal, it is advisable to engage a layer, given the complexity of this procedure.

The original, along with 7 copies of the petition, or 9 if the Government is a party to the dispute (2 copies per party, 1 copy for the judge and 2 copies for the assessors), must be filed with the clerk of the competent Labour tribunal (determined in principle by the location of the employee's place of work), who will then summon the parties to a hearing.

For example: if the worker works in Luxembourg City, the petition should be filed with the Labour court of Luxembourg City.

Contents of the petition

In order to be admissible the petition should contain certain mandatory items:

  • the last name, first name, profession and domicile of the employee;
  • the contact details of the employer, i.e., the location of its registered office, its Trade and Companies Register number, the identity of its representative (for example, the manager for an SARL, the board of directors for an SA);
  • the purpose of the petition;
  • a summarised explanation of the context of the matter;
  • a numerical indication of the amounts that the worker is claiming from the employer: according to some case-law rulings, the fact that the petitions are not ascribed a numerical amount, along with the notation "for the record" (pour mémoire - p.m.) may result in these petitions being denied;
  • the grounds on which the petition is based as well as the legal bases;
  • a list of the documents which the employee is invoking in support of their petition (a copy of the documents in question should be attached to it).

Stages of the proceedings and judgement

Stages of the proceedings

At the trial court level, the parties have the option of being represented. Where applicable, the representative must hold a power of attorney (constituting authorization), unless the representative is lawyer.

Once the petition has been filed, the stages of the proceeding are as follows:

  • the clerk of the court summons the 2 parties by registered mail, informing them of the date, time and place of the hearing;
  • on the date of the hearing, one of two situations may arise:
    • the 2 parties appear either in person, or through a representative holding a power of attorney, or through an lawyer, and a subsequent hearing is then set for the oral arguments;
    • one of the parties fails to appear, even after being properly summoned. In this case, the matter may be argued in default (in other words, in the absence of the party who failed to appear even after being summoned), and a judgement will be handed down by default;
  • while awaiting the 2nd hearing, each party must forward to the other the documents it intends to submit to the court to argue their case; the documents should be forwarded within a reasonable period of time to allow the opposing party sufficient time to analyse them (on average 5 working days before the hearing date; otherwise, the opposing party could request that the documents be refused);
  • at the 2nd hearing, the matter will be either argued or postponed to a later date.

If the case is argued, the court hears each party's explanations, receives their documents, and sets a date to hand down a judgement. The court then notifies the parties of the judgement by registered letter.

Judgement

The Labour tribunal may consider the dismissal to have been wrongful if a formality in the dismissal procedure, that was deemed to be material, was violated. For example, if notice of dismissal was given without respecting the prior interview procedure, in cases where such an interview is required by law, this constitutes wrongful dismissal due to an error of form.

The Labour tribunal may also consider a dismissal to be unfair if it is:

  • contrary to law (for example, a verbal dismissal);
  • not based on real and serious grounds linked to the employee's ability or behaviour;
  • not based on the operational needs of the company, institution or service.
Wrongful termination due to an error of form

If the tribunal declares the dismissal to have been wrongful, the employer may be ordered to pay the worker compensation—which may be no more than 1 month's salary or wages—for the error of form.

This compensation may not be granted if the tribunal nonetheless declares the dismissal as being wrongful on the merits.

Indeed the tribunal will first analyse the merits of the dismissal. If the dismissal is declared unfair, the tribunal will not examine its regularity and will not grant compensation for wrongful dismissal. Conversely, if the tribunal declares the dismissal to have been justified, it will then analyse the formal regularity of the dismissal, and where applicable will decide to allocate compensation for an error of form.

Unfair dismissal

If the tribunal declares the dismissal to be unfair, the employer may be ordered to pay the worker damages consisting of:

  • compensation for material damage suffered due to the loss of remuneration;
    and/or
  • compensation for pain and suffering arising from the circumstances of the dismissal, and notably the employee's concern about having to find a new job.

Unfairly dismissed employees are only allocated damages for material damage if they prove they did not remain passive, but took specific steps to find a new job. It is very important for the worker to be able to prove these steps were taken (copies of job-application letters and emails, copies of rejections, etc.).

The material damage suffered by the employee is calculated with regard to a reference period with a term that is set by the tribunal based on, in particular, the employee's length of service (generally a reference period of one month per year of service). The tribunal will determine if during this reference period the worker suffered material damage which must be indemnified by the employer. The material damage corresponds primarily to the actual loss of income the worker suffered during the established reference period (for example, former salary - unemployment benefit = actually loss of salary).

According to recent case law, the reference period begins to elapse after the end of the notice period, whether or not the worker was exempt from giving notice.

Consequences and recourse

Consequences for an employee dismissed with immediate effect for serious misconduct

Provided that the employee has filed a lawsuit for unfair dismissal before the Labour tribunal and is registered as a job seeker with the National Employment Agency (Agence pour le développement de l’emploi - ADEM), the employee dismissed with immediate effect for serious misconduct may be entitled to provisional unemployment benefits upon special authorisation from the president of the Labour tribunal.

The action for unfair dismissal must be filed prior to the petition for authorisation of the unemployment benefit. Otherwise, the authorisation petition will be denied.

If an employee who is dismissed for serious misconduct:

  • loses their case, they will be ordered to refund the Government the unemployment benefits that were provisionally received, and could be ordered to pay their employer a procedural indemnity (the amount varies, but is most often around EUR 800.00). Depending on their means, the employee may ask the judge to refund the unemployment benefits in instalments;
  • wins their case, they maintain their right to receive unemployment benefits, and the employer is responsible for refunding the unemployment benefits collected by the employee to the Employment fund (Fonds pour l'emploi). The employee may also receive a procedural indemnity paid by the employer.

If an employee who is dismissed with notice:

  • loses their case, they could be ordered to pay their employer a procedural indemnity (but they will not have to refund the unemployment benefits collected);
  • wins their case, the employer will be ordered to pay the Employment fund the unemployment benefits collected by the employee during the reference period set by the tribunal, and could be ordered to pay the worker a procedural indemnity.

Appeals

Opposition

Default judgements (when one of the parties has been properly summoned but did not appear) may be challenged by the defaulting party (the party who is not present) before the tribunal that handed down the decision. A petition is submitted to this tribunal, to be filed with the clerk of the Labour tribunal, within 15 days of notice of judgement.

Appeal

The judgment may be appealed before the Court of Appeal. The appeal must be served on the opposing party by a bailiff within 40 days of the notice of judgement, or no later than 40 days after expiry of the term for submitting a challenge (for default judgements, 55 days after notice of judgement).

The parties to the appeal must be represented by a lawyer before the Court.

Non-resident employees are entitled to an additional 15 days to appeal.

Court of Cassation

Decisions handed down by the Court of Appeal may be brought before the Court of Cassation within 2 months after the decision is served, provided that there is a plea alleging that the Court of Appeal violated a legal provision. The parties are required to be represented in court by a lawyer. Procedural costs are borne by the losing party.

Online services and forms

Downloadable forms

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Who to contact

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Magistrate's Court

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Luxembourg and Diekirch Bar

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