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

A fixed-term employment contract (contrat à durée déterminée - CDD) may only be concluded for a specific and temporary task.

It can only be concluded in exceptional circumstances in response to labour needs which do not stem from the business's normal and ongoing activity.

A fixed-term employment contract for the performance of work considered as a business's normal and ongoing activity is considered a permanent employment contract.

The rules that apply to a permanent employment contract (CDI), specifically with regard to the form and content of the contract as well as the trial period, also apply, in principle, to a fixed-term employment contract (CDD).

Who is concerned

Fixed-term employment contracts are for the following categories of people:

• employees who wish to work for an employer in return for payment;
• employers who wish to hire employees for a limited period of time to perform a specific, temporary task.

How to proceed

Content specific to fixed-term employment contracts

In addition to the compulsory information in employment contracts, a fixed-term employment contract must specify:

• the purpose for which the contract was concluded and why a fixed-term contract is used;
• the end date of the contract or, the minimum period of validity of the contract if no end date is stated;
• if it is a replacement contract, the name of the employee being replaced;
• the duration of the trial period, if any;
• a renewal clause, if applicable.

If it is not stated in writing that the contract is established for a fixed-term period, it will be assumed that it is a permanent contract and the employer will not have the right to claim otherwise.

Duration

A fixed-term contract can be entered into for no longer than 24 months, including renewals.

If the maximum duration of the contract is not respected, the contract is deemed to be a permanent employment contract (CDI).

The trial period must be taken into account when calculating the maximum duration of the contract.

In principle, a fixed-term contract must include a precise end date once it has been concluded. However, it may include a conditional expiry date:

• if it is established to replace:
  
  • an employee who is temporarily absent;
  • an employee whose employment contract has been suspended;
  • an employee on a permanent employment contract whose position has become vacant, pending the hiring of the employee who will be replacing them;
• if it concerns seasonal employment;
• if it concerns a job for which it is not common practice to use a permanent employment contract due to the nature of the activity or the temporary nature of that job.

In these various cases, the contract must be established for a minimum period and must end when the absent employee returns, or when the purpose of the contract has been fulfilled.

If the conditions related to the term of the contract are not fulfilled, the contract is considered a permanent employment contract.

Trial period

The rules that apply to permanent employment contracts (CDI) with regard to trial periods also apply to fixed-term employment contracts (CDD).

When the contract does not have a fixed end date, the trial period is calculated in relation to the minimum contract duration.

A trial period is, in principle, not renewable if a fixed-term employment contract for which an employee's duties remain unchanged is renewed, or if there is a series of fixed-term employment contracts because the same employee that was replaced is absent yet again.

However, if the same employee is hired by an employer under successive fixed-term contracts, but for totally different functions, the employer is allowed to stipulate two different trial period clauses.

Tasks compatible with a fixed-term employment contract

A fixed-term employment contract may only be entered into for a specific and temporary task.

It can only be concluded in exceptional circumstances in response to labour needs which do not stem from the business's normal and ongoing activity.

Fixed-term employment contracts can be used on a general basis in certain specific sectors of activity where such contracts are unavoidable due to the nature of the activity or the temporary nature of the work.

Examples of specific and temporary tasks

• replacing an employee who is temporarily absent or filling a temporarily vacant position;
• seasonal employment, namely, for the following activities:
  • harvesting (incl. grape harvesting, etc.);
  • packaging of harvested products;
  • leisure and holiday instructors and coordinators;
  • holiday tour guides and tourist guides;
  • surveillance and maintenance of beaches, outdoor swimming pools and camp sites;
  • positions held in retail stores, hotels and restaurants that are only open at certain times of the year;
  • positions held in retail stores, hotels and restaurants that have a regular and foreseeable seasonal-related increase in activity during the year;
  • positions held in companies involved in aviation and the transportation of people that have a regular and foreseeable seasonal-related increase in activity during the year;
• occasional and one-off tasks which are not covered by the regular activity of the business;
• specific and temporary work carried out in the case of a temporary and exceptional increase in business activity, or in the case of business start-ups or expansion;
• urgent and necessary work to prevent a negative impact on the business;
• jobs assigned to jobseekers as part of the implementation of job-integration and back-to-work measures;
• jobs intended to provide employment for certain categories of jobseekers;
• jobs for which the employer agrees to offer additional professional training to the employee;
• contracts concluded with workers in the entertainment industry without regular and permanent employment;
• contracts between an employer and a student / pupil (outside school holidays; the student / pupil may not be employed for more than 10 hours per week on average over a period of one month or 4 weeks).

Business sectors where fixed-term employment contracts are used

In addition to specific and temporary tasks, fixed-term contracts can also be used in the following sectors and professions:

• audiovisual sector:
  • radio and television broadcasters-announcers;
  • radio and television copy writers-programmers;
  • radio and television presenters;
  • producers, directors, floor managers;
  • radio and television reporters-cameramen;
• audiovisual, cinematographic and phonographic production industry:
  • producers;
  • writers, composers, performers, actors and extras;
  • directors, producers;
  • script editors, production assistants;
  • cameramen, reporters and photographers;
  • decorators, make-up artists, dressers, floor managers, film editors;
  • sound, lighting and vision operators;
• the banking sector:
  • specialist private banking activities;
  • investment advisors and portfolio managers;
  • experts responsible for swaps, options, futures and forward-rate agreements;
  • experts responsible for mergers and acquisitions, venture capital and risk capital;
• the vocational training and teaching sector:
  • supply-teacher, executive-assistant and socio-educational jobs, if such jobs cannot be filled by personnel who meet the required conditions for the job or appointment;
• professional sports:
  • athletes;
  • sportsmen/sportswomen;
  • trainers for sportsmen/sportswomen;
• construction and public works:
  • workers recruited for building sites abroad;
• cooperation, technical assistance, engineering and research activities;
• personnel hired for exhibitions, fairs, shows, congresses or seminars;
• fairground personnel;
• forestry workers;
• persons conducting surveys on a temporary basis;
• conductors and soloists in orchestras, instrumental or vocal groups;
• performing artists;
• models.

Expiry date of a fixed-term employment contract

A fixed-term employment contract automatically ends on the expiry of its term, or when the purpose for which it was concluded is achieved.

When a fixed-term contract comes to an end, the employer and the employee have 3 options:

• not to continue their working relationship beyond the end date;
• continue their working relationship with a permanent employment contract (CDI);
• continue their working relationship with a fixed-term employment contract (CDD).

Continuing the working relationship with a permanent employment contract

When an employee continues to work beyond the end date specified in their fixed-term employment contract, the working relationship continues under a permanent employment contract, in which case 2 scenarios are possible:

• the employee continues the working relationship under the same terms and conditions as initially stipulated in the fixed-term contract;
• the employee negotiates the terms and conditions of a new contract, which immediately replaces the initial fixed-term contract.

In either case, the new permanent employment contract may not contain a trial period.

The employee's length of service must be taken into account as from the start date of their first employment contract.

Continuing the working relationship with a new fixed-term contract

Renewing a fixed-term contract

A fixed-term contract may be renewed twice for a fixed term. However, the total duration may not exceed 24 months, including renewals. Otherwise, the renewed employment contract is considered to be a permanent employment contract.

The renewal must either be stipulated in advance by a clause in the initial employment contract, or be provided for in an amendment to the contract signed by both parties.

Types of fixed-term employment contracts renewable in exceptional circumstances

Some fixed-term employment contracts may be renewed more than 2 times even for a duration exceeding 24 months without being recategorised as a permanent employment contract. These are namely fixed-term employment contracts concluded:

• with lecturers-researchers at the University of Luxembourg;
• with workers in the entertainment industry without steady employment;
• with students (for a maximum of 5 years);
• between the State or the commune and the following categories of personnel:
  • executive assistants of a pre-school or primary education school;
  • secondary school supply teachers;
  • socio-educational officers of a government administration or department attached to the Ministry of Education, Children and Youth (Ministère de l’Education nationale, de l’Enfance et de la Jeunesse - MENEJ);
  • supply teachers attached to the Department of Adult Education (Ministry of Education, Children and Youth);
  • supply teachers attached to the Department of Vocational Training (Ministry of Education, Children and Youth);
  • supply teachers attached to the National Institute for Languages;
  • supply teachers in specialised differentiated teaching institutes and departments;
  • supply teachers at the Logopedics Centre (Centre de logopédie);
• between communes, associations of communes or certain private institutions, on the one hand, and a supply teacher responsible for music education on the other hand;
• between the archbishopric, on the one hand, and a supply teacher for religion on the other hand, in order to carry out temporary replacements;
• between a federation or a sports club, on the one hand, and a trainer or sportsman/sportswoman on the other hand.

Successive fixed-term employment contracts

The same position may not be filled:

• by successive fixed-term employment contracts;
• and/or interim assignment contracts;
• and/or labour supply contracts.

Therefore, the employer may not directly offer a new fixed-term contract for the same position to an employee whose fixed-term contract has reached its term (i.e. at the end of 24 months maximum, renewals included), or to any other candidate.

The employer must first allow for a waiting period to pass, corresponding to 1/3 of the duration of the contract that reached its term, including renewals.

A contract concluded in violation of these provisions is considered as a permanent employment contract.

However, this waiting period does not apply to the following cases:

• if the employee replaced during the first contract period is still absent;
• if urgent works need to be carried out;
• if it is a seasonal employment contract;
• if it involves filling a position for which a permanent employment contract is not commonly used;
• if the fixed-term contract is terminated early by the employee;
• if the employee on a fixed-term employment contract refuses to renew their contract, despite a renewal clause, a fixed-term contract can be concluded with a person for the remainder of the time foreseen by the renewal clause;
• if it is a job offered to an unemployed person registered with ADEM as part of a professional integration or a return to work measure, or a job offered to an unemployed person eligible for fixed-term employment, or a job intended to encourage hiring certain categories of unemployed persons, or a job for which the employer commits themselves to providing additional vocational training.

Terminating a fixed-term employment contract

A fixed-term employment contract may be terminated before its established end date only in the following 3 cases:

• during the trial period, by either the employer or the employee, provided they observe the notice period;
• in the event of serious misconduct on the part of the employer or the employee;
• by mutual consent between the employer and employee. However, to be valid, the mutual consent must be established in writing, in two original copies, and signed by both the employer and the employee;

Other than these 3 cases, a fixed-term employment contract cannot be terminated before the expiry date: neither of the parties can therefore withdraw from its obligations before the scheduled end date of the contract.

If, despite this, a fixed-term employment contract is terminated before it expires:

• by the employee: the employee runs the risk of having to pay any damages their employer may claim for any actual harm that the employer may have suffered. However, the amount may not exceed the compensation for the notice period which the employee should have observed had they been on a permanent contract;
• by the employer: the employer must compensate the employee by paying the amount they would have earned until the end of the contract. However, the amount may not exceed the compensation for the notice period during which the employee should have observed had they been on a permanent employment contract.

Automatic termination of a fixed-term employment contract

In addition to cases where it has expired, a fixed-term employment contract is automatically terminated if:

• the employee is found to be unfit to work following the medical examination at the time of hiring;
• the employee's rights to sickness benefits are exhausted;
• the employee no longer qualifies as a disabled employee;
• the employee is redeployed elsewhere on the labor market;
• an invalidity pension is granted to the employee;
• the employer is declared bankrupt;
• the employer is physically unable to continue the business activity;
• the employer dies;
• the employee dies.

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