In order to protect jobs and thus prevent redundancies, Luxembourg labour law allows businesses to resort to temporary involuntary layoff (chômage accidentel et technique) under certain conditions.
A business can apply for involuntary and temporary layoff to the National Employment Agency (Agence pour le développement de l'emploi - ADEM) in the event of an interruption to or a significant reduction in its activity due:
- to a natural disaster affecting its production equipment;
- or to road or infrastructure works seriously impeding client access to the establishment.
During the involuntary and temporary layoff period, the State reimburses the business 80 % of the salaries normally received by employees as of the 17th hour of monthly inactivity.
Who is concerned
Any business whose activity has come to a standstill or has been significantly reduced following a natural disaster qualifying as an event of force majeure, i.e. destroying or damaging the production equipment, may apply for involuntary and temporary layoff.
The involuntary and temporary layoff scheme may also be granted in the event of an interruption or significant reduction in activity due to roadworks or infrastructure developments being carried out by the authorities for a duration of more than one month and seriously impeding customer access to the business, provided that the reduction in activity leads to a considerable decrease in turnover compared to a period of normal activity.
The temporary layoff scheme does not apply to businesses who are no longer able to carry out their activity due to an event external to the business, such as the temporary or permanent cessation of activity of an important supplier or a strike affecting an important supplier. In such cases, the business may apply for short-time work in the event of force majeure (chômage partiel en cas de force majeure).
The involuntary layoff scheme can be applied to all employees and apprentices with their place of work in Luxembourg.
In order to request involuntary and temporary layoff support, the business has to:
- be established in Luxembourg;
- hold a business permit, where applicable;
- be unable to temporarily post inactive personnel to other businesses, building sites or workshops;
- commit to maintain the employment or apprenticeship contracts of the persons concerned.
Before applying for involuntary and temporary layoff, the business manager must inform and consult with the staff delegation (délégation du personnel), the joint works committee (comité mixte d'entreprise) - until the next social elections - , as well as the trade unions in the case of businesses bound by a collective agreement.
It should be noted that joint works committees (also "joint works councils") will cease to exist after social elections that take place after 1 January 2016. As from these elections, the tasks and duties assigned to joint works committees will be transferred to the staff delegations in companies which had at least 150 staff during the 12 months preceding the day of the posting of the announcement of elections.
Until these elections, the joint works committees currently in place will continue to carry out their tasks.
DeadlinesThe employer must inform ADEM of the involuntary layoff at the latest on the business day following the day on which activity was interrupted.
How to proceed
The employer must submit the application for involuntary and temporary layoff on plain paper to ADEM's job protection unit (Service Maintien de l’Emploi), indicating:
- the reduction in working hours;
- the procedures put in place;
- the expected duration of the reduction;
- the number of workers concerned.
Maximum duration of involuntary and temporary layoff
Each employee may be laid off temporarily for a maximum of 350 hours per calendar year.
During the involuntary layoff period, the employer advances at least 80 % of the salaries corresponding to the inactive hours, subject to a limit of 250 % of the social minimum salary for unskilled workers.
The employer must bear all costs for the first 16 inactive hours per calendar month.
Reimbursing the business
As of the 17th inactive hour, the Employment Fund (Fonds pour l'emploi) reimburses up to 80 % of the average gross hourly remuneration actually paid to the employee during the 3 months preceding the month in which the layoff occurred.
At the beginning of each month following the month where the involuntary and temporary layoff occured, the employer must send the following to the ADEM:
- an individual form for each employee concerned;
- a statement of the amounts to be borne by the State.
The amounts received by the employer under an insurance policy concluded with an insurance company for inactive work hours (as of the 17th inactive hour per calendar month) due to the involuntary and temporary layoff are deducted from the Employment Fund subsidies.
Forms / Online services
Chômage accidentel ou technique involontaire - relevé des montants à charge de l'Etat