Amending an employment contract

Last update

The essential terms of work contracts cannot be amended unilaterally to the disadvantage of the members of the staff delegation, both regular and substitute staff representatives, and of the safety officer, during their term of office.

As far as the other categories of employees are concerned, employers may, in principle, modify the conditions governing a working relationship unilaterally and at any time.

As a general rule, amending the working conditions is not subject to any formality except where the employer chooses to amend the employment contract to the disadvantage of the salaried worker and where the envisaged amendment concerns an essential clause in the employment contract.

In order to protect the salaried workers' rights, the change of essential terms to the disadvantage of the salaried worker is subject to a number of formalities which must be complied with by the employer.

The changes can be made to permanent contracts (CDI) and to temporary contracts (CDD).

In principle, any amendment to an employment contract must be drawn up in writing (addendum to the employment contract) in duplicate and a copy given to the salaried worker and the employer respectively at the latest on the date the amendments take effect.

There are various scenarios for the amendment of an employment contract:

  • if the amendment is neutral or favourable to the salaried worker and relates to an essential term, it can be applied without the salaried worker's consent after an addendum to the contract has been drawn up;
  • if the amendment is neutral, favourable or unfavourable to the salaried worker and relates to an ancillary clause, it may be applied without the salaried worker's consent after an addendum to the contract has been drawn up;
  • if the amendment is unfavourable to the salaried worker and relates to an essential clause of the employment contract, the employer must follow a well-defined procedure before drawing up an addendum to the contract.

How to proceed

Amending work contracts

Whether or not it is favourable to the salaried worker, any amendment to one of the elements of the employment contract must be made by means of a written addendum to the employment contract.

The addendum must be drawn up in duplicate with one copy for the employer and one for the salaried worker.

Neutral or favourable amendment of a clause of the employment contract

If the amendment is neutral or in the salaried worker's favour (for either an essential or ancillary clause), it may be applied without notice and without the consent of the salaried worker.

The employer may unilaterally decide to amend an essential clause in favour of or with a neutral effect on the salaried worker, without having to abide by any particular procedure or deadlines. Therefore, in this case, the employer is not obliged to notify the salaried worker in writing in advance of their intention to amend the contract.

Favourable or neutral amendments to the terms of the employment contract must be made by means of an addendum to the employment contract, drawn up in 2 copies and signed by the 2 parties, where one copy is given to the salaried worker on the date, at the latest, the amendments in question take effect.

However, even if the salaried worker refuses to sign the addendum, the amendment takes effect and the salaried worker can only accept the new working conditions.

If the salaried worker refuses to comply with the new working conditions, this may be construed as a refusal to work or to comply with orders and may, depending on the circumstances, be subject to sanctions which could go as far as dismissal with notice or with immediate effect.

Unfavourable amendment of an ancillary clause of the employment contract

A clause in the employment contract is deemed to be ancillary if:

  • it concerns an element which the parties clearly did consider to be of decisive importance upon signature of the employment contract;
  • the employer and the salaried worker have foreseen the possibility of a subsequent amendment (e.g. the employment contract can stipulate that the salaried worker's assignments may vary in accordance with the needs of the business and the salaried worker's skills).

An element of the employment contract may be of decisive importance to a particular salaried worker at the time the contract is entered into, whereas, for another one, this same element may be less important.

For example, the following may be considered as ancillary clauses:

  • working hours, if the contract stipulates that these hours may be amended in accordance with the requirements of the business;
  • place of work (place of employment), particularly when the contract includes a geographical mobility clause, except where the parties have deemed this an element of importance (for example, if it is clearly indicated in the employment contract that the place of work is an essential element of the contract);
  • the nature of the tasks to be assigned to the salaried worker, provided that these tasks are in line with the salaried worker's qualifications and skills.

Unfavourable amendments to the salaried worker of the terms of the employment contract must be made by means of an addendum to the employment contract, drawn up in 2 copies and signed by the 2 parties, where one copy is given to the salaried worker on the date, at the latest, the amendments in question take effect.

However, even if the salaried worker refuses to sign the addendum, the amendment takes effect and the salaried worker can only accept the new working conditions.

If the salaried worker refuses to comply with the new working conditions (for example, if they continue to work under their former working hours even though these working hours have been changed), this may be construed as a refusal to work or to comply with orders and may, depending on the circumstances, be subject to sanctions which could go as far as dismissal with notice or with immediate effect of the salaried worker.

Unfavourable amendment of an essential clause of the employment contract

An essential term is a clause concerning an element which is considered to be of decisive importance to the parties at the time the contract is concluded.

As a general rule, the following in particular are considered to be essential clauses:

  • clauses concerning the remuneration of the salaried worker, i.e. reduction in base salary and/or reduction or cancellation of fringe benefits. However, a change in the calculation method of the salary is not necessarily an essential amendment, as long as the overall salary level is maintained and the new calculation method is favourable to the salaried worker;
  • clauses concerning the qualification of the salaried worker, in particular if the worker is downgraded to a function corresponding to a lower level of qualification, even if the remuneration remains unchanged. Also, if an employee is demoted from a managing position to a subordinate position, this is considered to be an essential amendment in the terms of the employment contract which is unfavourable to the employee. However, a simple transfer from one function to another or from one department to another, with no change in qualification or remuneration, is not considered to be an essential amendment;
  • clauses concerning working hours, since any reduction or increase in working hours is likely to impact the salary level.
    A change in the working hours is not generally considered to be an amendment of an essential clause of the employment contract, especially if the latter contains a clause stipulating that the working hours are flexible and may vary depending on the needs of the business;
  • non-competition clauses, i.e. adding a non-competition clause which restricts the salaried worker's liberty in the future.

The concept of an essential clause of a contract is subjective. An element of an employment contract can be of great importance to a particular salaried worker at the time the contract is concluded, but for another salaried worker this same element may have less importance (e.g. a change in the place of work).

If an amendment in the employment contract is unfavourable to the salaried worker and if it changes an essential clause of the contract which is not accepted by the salaried worker, the employer must announce said amendment to the salaried worker through the same procedure as with a dismissal:

  • either by giving a notice period;
  • or with immediate effect if there are serious grounds that justify the modification.

In businesses with more than 150 staff, the employer must call the salaried worker to a preliminary interview before amending their employment contract, regardless of whether it is being amended with immediate effect or with notice. During this interview, the employer must explain their intention to significantly amend the employment contract to the salaried worker's disadvantage. Written notification of the amendment may be given to the salaried worker at the earliest on the day after and at the latest 8 days after the preliminary interview.

Employment contracts cannot be significantly modified to the disadvantage of salaried workers who are protected against dismissal (such as pregnant women, salaried workers on parental leave or leave for family reasons and staff delegates) during the whole period of time where the protection is effective. As a significant amendment to an employment contract is considered as similar to dismissal, it must be considered null and void if it concerns protected salaried workers. Salaried workers on parental leave may only have their employment contracts significantly amended due to serious misconduct.

Amendment with a notice period

An amendment to the employment contract for reasons other than serious misconduct must be notified to the salaried worker in accordance with the same procedures and deadlines as for dismissal with a notice period.

The employer must inform the salaried worker of the amendment to their employment contract in writing, stating the date on which the amendment takes effect. The notification is carried out:

  • by registered letter with acknowledgement of receipt;
  • or by delivery in person against signature on receipt.

The duration of the notice period before the amendment takes effect depends on the salaried worker's length of service.

In principle, the notice is:

  • 2 months for salaried workers with a continuous length of service of less than 5 years;
  • 4 months for salaried workers with a continuous length of service of between 5 and 10 years;
  • and 6 months for salaried workers with a continuous length of service of at least 10 years.

If their employment contract is to be significantly amended, the salaried worker may:

  • accept the amendment by signing the addendum to the employment contract as proposed by the employer, or simply continue to come to work after the amendment entered into effect which is then imposed on them;
  • ask to be informed of the reasons behind the amendment within a period of one month of receipt of the letter announcing the amendment to their working conditions. The employer is then obliged to reply by registered letter within one month of receipt of the request to be informed of the reasons, stating the precise reasons for the amendment of the salaried worker's working conditions. The salaried worker may then decide to accept the significant amendment to their employment contract or to resign;
  • refuse to accept the amendment by resigning before the end of the notice period (regardless of whether or not he has asked to be informed of the reasons). If the worker simply objects to the amendment but does not resign, they are deemed to have accepted the amendment.
    The resignation is equivalent to a dismissal with notice and the salaried worker may initiate legal proceedings for unfair dismissal. The labour tribunal will examine, in this case, the validity of the significant amendment to the employment contract and may, where applicable, oblige the employer to pay damages to the salaried worker for unfair dismissal if the amendment is not justified.

A distinction must be made between the employer's possible failure to comply with the notification procedure and the absence of grounds for the substantial amendment:

  • in the event of non-compliance with the notification procedure, the amendment to the contract becomes null and void.
    The salaried worker can appeal to the labour tribunal within a reasonable deadline and have them declare the invalidity of the amendment and, once the invalidity is declared, the worker can return to work as if nothing happened. However, in order to have the amendment declared null and void by the tribunal, the salaried worker must still be employed by the company;
  • if there is no valid reason for a substantial amendment, the employer will suffer the consequences for unfair dismissal.
    If the reasons for the amendment are not notified to the salaried worker within the legal deadlines or are not detailed enough, the dismissal or substantial amendment will generally be qualified as unfair. However, if the salaried worker does not request the reasons, the burden of proof becomes incumbent upon them and they will have to prove that the amendment is not based on real and serious grounds.

Amendment with immediate effect

An amendment with immediate effect must be notified to the salaried worker in accordance with the same procedures and deadlines as for dismissal with immediate effect. This is, in general, decided upon by the employer when the salaried worker has been found guilty of serious misconduct.

The employer may:

  • notify the salaried worker immediately of the amendment to the employment contract with immediate effect;
  • or first announce a suspension and then notify the amendment of the employment contract. The notification of the amendment can occur at the earliest on the day following the announcement of the suspension and at the latest 8 days after the suspension.

The employer must notify the salaried worker of the amendment to their employment contract in writing:

  • by registered letter with acknowledgement of receipt;
  • or by delivery in person against signature on receipt.

The letter notifying the amendment to the salaried worker must explain in detail the serious reason(s) that prompted the employer to make such a change.

The salaried worker may then:

  • accept the amendment by signing the addendum or continue to work after the amendments have entered into force, the worker is then considered to have accepted them;
  • refuse the amendment and resign.
    If the worker simply objects to the amendment but does not resign, they are deemed to have accepted the amendment. The resignation is considered to be a dismissal with immediate effect and the salaried worker may initiate legal proceedings for unfair dismissal. The labour tribunal will examine, in this case, the validity of the significant amendment to the employment contract and may, where applicable, oblige the employer to pay damages to the salaried worker for unfair dismissal if the reasons for the amendment with immediate effect are not considered to be justified.

A distinction must be made between the employer's possible failure to comply with the notification procedure and the absence of grounds for the substantial amendment:

  • in the event of non-compliance with the notification procedure, the amendment to the contract becomes null and void.
    The salaried worker can appeal to the labour tribunal within a reasonable deadline and have them declare the invalidity of the amendment and, once the invalidity is declared, the worker can return to work as if nothing happened. However, the invalidity action requires that the salaried worker is still employed by the company;
  • if there is no valid reason for a substantial amendment, the employer will suffer the consequences for unfair dismissal.
    If the reasons for the amendment are not notified to the salaried worker within the legal deadlines or are not detailed enough, the dismissal or substantial amendment will generally be qualified as unfair. However, if the salaried worker does not request the reasons, the burden of proof becomes incumbent upon them and they will have to prove that the amendment is not based on real and serious grounds.

Related procedures and links

Procedures

Permanent employment contract (CDI) Dismissal with notice Dismissal with immediate effect for serious misconduct Fixed-term employment contracts

Links

Further information

Legal references

Your opinion matters to us

Tell us what you think of this page. You can leave us your feedback on how to improve this page. You will not receive a reply to your feedback. Please use the contact form for any specific questions you might have.

Fields marked with an asterisk (*) are mandatory.

Did you find what you were looking for?*
How would you rate this page?*
Very poor
Very good

Leave a comment to help us improve this page. Do not provide any personal information such as your email address, name, telephone number, etc.

0/1000

Please rate this page

Your opinion has been submitted successfully!

Thank you for your contribution. If you need help or have any questions, please use the contact form.

Would you like to help us make digital public services more user-friendly by submitting your suggestions for improvement?

Then visit Zesumme Vereinfachen, the online participation platform dedicated to administrative simplification in Luxembourg.

Let's simplify things together

An error occurred

Oops, an error has been detected during your form processing.