Concluding a permanent employment contract

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An employment contract is an agreement that governs a work relationship. In it, one person agrees to work for another in return for payment.

Although labour law recognises the validity of an oral contract, it is strongly recommended to conclude a contract in writing, detailing the nature and conditions of the work relationship.

Who is concerned?

The following parties are involved when drawing up an employment contract:

  • employees who wish to work for an employer in return for payment;
  • employers wishing to hire an employee.

Prerequisites

The signing of an employment contract seals the relationship between the employer and the employee.

The working relationship can exist only if the following 3 elements are present:

  • a hierarchical relationship between the employer and the employee: the employment contract places the employee under the employer's authority;
  • the provision of work services: the main obligation for the employee consists of carrying out work for the employer;
  • remuneration: the work performed by the employee must be directly remunerated. In principle, this must take the form of cash (salary, bonus, financial incentive) paid to the person and, in certain cases, it can be combined with benefits in kind (free housing, company car, mobile phone, etc.).

How to proceed

Form and content of the employment contract

The employment contract must be drawn up:

  • in writing;
  • at the latest when the employee begins work;
  • in duplicate, for each of the parties.

Nevertheless, an oral employment contract between the employer and employee is just as valid as a written contract. In this case, it is necessarily agreed for an indeterminate period of time. In case of a dispute, it is purely the employee's responsibility to prove its existence.

Each of the parties to an employment contract may require the other to sign a written contract. If the other party refuses, the contract may be broken without notice or indemnity. Such termination of the agreement may occur, at the earliest, on the third day after the request for a signed contract, and at the latest, within 30 days of the employee's starting work.

Mandatory information in all employment contracts

All employment contracts must include the following mandatory information:

  • the identity of the parties entering into the contract (names, addresses);
  • the effective date of entry into service of the employee;
  • the place of work;
  • the registered office of the business or, where applicable, the employer's residence;
  • the nature of the job carried out, and, where applicable, a description of the role and tasks assigned to the employee at the time of hiring;
  • the employee's daily or weekly working hours;
  • the normal working times;
  • the basic salary and the index in force when the contract was signed, as well as any additional financial benefits (incentives, 13th month, head-of-household premium, bonus, etc.);
  • the duration of paid annual leave, or if it is not possible to state this when concluding the contract, the means used to determine and allocate the amount of leave must be stated;
  • the notice period that the employer and employee must give to terminate the contract;
  • the duration of the trial period, where applicable;
  • the reference to collective bargaining agreements, where applicable;
  • where applicable, the existence and description of a supplementary pension scheme, the optional or compulsory nature of that scheme, the rights to related benefits and any personal contributions to be made;
  • where applicable, any additional or derogation clause which may override the law. These clauses must be favourable to the employee. If not, they are declared null and void.

When given the job, employees must inform the employer of their qualifications in order to be paid the social minimum wage for skilled workers.

If employees inform the employer of their professional qualifications at one point once they have started working, they will only be assured of receiving the social minimum wage for skilled workers from that point on. In addition, employees must actually perform the functions required of skilled work.

Trial period

The purpose of the trial period is to:

  • give employees the opportunity to ensure the job is suitable for them;
  • give the employer the opportunity to assess the employee's skills.

During this period, the 2 parties may rapidly terminate the employment contract without compensation.

The trial period must be stipulated in writing, at the latest when the employee starts work.

If the contract is concluded after the employee starts work (i.e. as a result of a verbal contract or an existing fixed-term employment contract), it can no longer include a trial period clause.

Duration of the trial period

The minimum duration of the trial period is 2 weeks.

The maximum duration of the trial period depends on the employee's level of qualification and salary. It is:

  • 3 months maximum if the employee does not have a vocational skills certificate (CATP) / vocational aptitude diploma (DAP) or equivalent;
  • 6 months maximum if the employee has a vocational skills certificate (CATP) / vocational aptitude diploma (DAP) or equivalent, or a higher level of training;
  • 12 months maximum if the employee receives a gross monthly salary of EUR 4,938.75 or more (at the current index value).

If the trial period stated in the contract exceeds these maximum limits, the trial period clause is deemed null and void for the excess period.

In the context of the same working relationship, only one trial period may be implemented. It cannot be renewed. Therefore, if the employee's duties or status are changed within the company through an addendum to the contract, the contract may not contain a clause that stipulates a new trial period.

Suspending the trial period

Suspending the implementation of the contract for illness or miscellaneous leave

Should the contract be suspended during the trial period (due to illness, leave for family reasons, etc.), the trial period is suspended throughout the whole period of absence.

When the employee returns to work, the trial period is automatically extended for a period equal to the period of suspension. However, the maximum period of extension is 1 month.

Suspending the implementation of the contract in the event of pregnancy

If an employee gets pregnant during the trial period under a permanent employment contract, the trial period is suspended from the day the employee submits a medical certificate to her employer confirming her pregnancy. The remaining part of the trial period starts again at the end of the period of protection against dismissal. Pregnant employees are protected against dismissal from the first day of the medically certified pregnancy to the twelfth week after giving birth.

The suspension of the trial period in case of pregnancy only affects employees with a permanent employment contract (CDI).

End of the working relationship

Unilateral termination of the employment contract

Both the employee and the employer can terminate the employment contract.

If the employee terminates the contract, it will be a resignation. There are two types of resignations:

If the employer terminates the employment contract, this is a dismissal, which may be:

Workers who are dismissed for serious misconduct in principle are not entitled to unemployment benefits. However, workers who are dismissed for serious misconduct may apply for unemployment benefits as part of proceedings for unfair dismissal.

Termination of the employment contract by mutual consent

Both the employee and the employer can terminate the employment contract by mutual consent.

The termination of an employment contract by mutual consent does not entitle the employee to unemployment benefits.

Automatic termination of the employment contract

In some cases, the employment contract binding the employee and employer ends automatically without any action on their part.

The contract is terminated automatically when:

  • the employee is declared unfit for work during the medical examination at the time of hiring;
  • the employee is redeployed elsewhere in the labour market;
  • the employee is eligible for a disability pension;
  • the employee's rights to sick pay have expired (after 52 weeks of illness over a period of 104 weeks);
  • the employee is eligible for an old-age pension;
  • the employee turns 65, provided the employee is entitled to an old-age pension;
  • the employee no longer qualifies as a disabled employee;
  • the employer is declared bankrupt;
  • the employer is physically unable to carry on business;
  • the employer dies;
  • the employee dies.

Online services and forms

Who to contact

Chamber of Employees

  • Chamber of Employees

    Address:
    18, rue Auguste Lumière L-1950 Luxembourg Luxembourg
    B.P. 1263 L-1012 Luxembourg
    Email address:
    csl@csl.lu
    Closed ⋅ Opens at 8.00
    Monday:
    8.00 to 12.00, 13.00 to 17.00
    Tuesday:
    8.00 to 12.00, 13.00 to 17.00
    Wednesday:
    8.00 to 12.00, 13.00 to 17.00
    Thursday:
    8.00 to 12.00, 13.00 to 17.00
    Friday:
    8.00 to 12.00, 13.00 to 17.00
    Saturday:
    Closed
    Sunday:
    Closed
    Mon.-Fri. from 8.30 to 12.00 and from 13.00 to 17.00

Inspectorate of Labour and Mines

2 of 5 bodies shown

Related procedures and links

Procedures

Fixed-term employment contracts Requesting legal annual leave Pregnancy and maternity leave

Links

Further information

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