Job protection plan

A job protection plan is a combination of various instruments designed to adapt the workforce of businesses in difficulty while keeping employees in jobs.

It is used to manage the effects of planned restructuring in advance.

Within the framework of social dialogue, it must enable alternative solutions to be found so that employees threatened with redundancy are not faced with unemployment.

The secretariat of the Economic Committee is at the disposal of businesses to present and discuss the application of the measures provided for by a job protection plan.

Who is concerned

The job protection plan is aimed at businesses that are currently facing, or will soon have to face, economic difficulties.

Discussions regarding a job protection plan may be initiated by:

  • either the social partners when they sense that economic or financial problems are likely to have a negative impact in terms of jobs;
  • or the Economic Committee (Comité de conjoncture):
    • if it records more than 5 redundancies over a period of 3 months, or 8 redundancies over a period of 6 months;
    • or if financial or economic difficulties are expected.

Where applicable, the Economic Committee can request an in-depth examination of the economic, financial and social situation of the business in order to decide in full knowledge of the facts if drawing up a job protection plan is appropriate. If the business concerned agrees, this examination may be carried out by external experts. The Employment Fund (Fonds pour l'emploi) may cover the experts' fees.

The members of the Economic Committee undertake to respect their obligation of professional discretion with regard to any information received in this way.

Discussions concerning the job protection plan take place between the social partners, i.e.:

  • on one side:
    • the employer and/or;
    • an employers’ professional association;
  • on the other side, depending on the case:
    • the staff delegation;
    • the salary arm of the joint works committee (until the next social elections);
    • where applicable, the trade unions that have signed the collective agreement and the trade unions that are representative at a national or sector level.
In the absence of a collective agreement, the staff delegation or the joint works committee (until the next social elections) can ask one or more of the trade unions that are representative on a national level to take part in the discussions about the introduction of a job protection plan.

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.

Prerequisites

The job protection plan is intended to prevent redundancy plans. It is therefore desirable to start discussions concerning its application at an early stage, before a crisis situation arises.

In order to negotiate a job protection plan, the business must:

  • be established in Luxembourg;
  • hold, where applicable, a business permit granted by the competent authority.

How to proceed

Discussions on the job protection plan

Discussions concerning the job protection plan take place between the social partners within the business.

The party that initiated the discussions informs the secretariat of the Economic Committee when discussions have begun.

The discussions mainly concern the following instruments:

  • job protection instruments within the business:
    • reduction in the number of temporary staff;
    • natural departures without replacements, including through the use of training for internal redeployment;
    • short-time working;
    • adjustments to working hours via:
    • participation in continuing training and/or retraining during inactive or freed-up working hours;
    • voluntary career breaks;
    • temporary loan of labour for a limited period;
    • early retirement for company restructuring;
  • instruments for internal or intra-group restructuring:
    • reduction in the number of fixed-term employment contracts;
    • voluntary departures (including tax exemptions for voluntary departure or redundancy benefits under article 115.10);
    • retraining to allow redeployment within the business or to another business in the same business sector;
    • search for new jobs;
    • temporary loan of labour;
  • external reassignment:
    • search for new jobs (profile analysis and contact with ADEM, businesses including suppliers and customers, professional networks and federations, out-placement agencies);
    • personalised support for career changes, if necessary using external experts;
    • retraining, where appropriate, with training fees subsidised by ADEM;
    • temporary loan of labour;
    • re-employment support;
    • recruitment aid for older workers;
    • voluntary departures (including tax exemptions for voluntary departure or redundancy benefits under article 115.10).

The majority of these instruments can also be used without a job protection plan, but businesses who resort to job protection plans approved by the Minister of Labour, Employment and the Social and Solidarity Economy may benefit from more favourable conditions regarding some these instruments.

The job protection plan can involve one or more of these instruments, and can even include other elements not specifically listed. It provides a framework for establishing a structured approach to deal with the effects of restructuring on employment.

It must define a period of application as well as the principles and procedures governing its implementation and monitoring.

Discussions can also cover employees made redundant during the 3-month or 6-month reference period that lead to the suggestion to draw up a job protection plan.

Approval and monitoring of the job protection plan

The social partners draw up the job protection plan in the form of a signed agreement approved at the appropriate levels.

If the business belongs to a sector covered by a collective agreement, the trade unions that represent this sector at national level must sign the job protection plan.

They must then send the plan to the secretariat of the Economic Committee.

In contrast to the provisions governing redundancy plans, there are no deadlines for reaching an agreement in the context of a job protection plan.

If negotiations fail, a report outlining the content and conclusions of the discussions and signed by all the parties concerned is sent to the president of the Economic Committee.

If negotiations are successful, the plan must be communicated to the Economic Committee and approved by the Ministry of Labour and Employment so that the business can benefit from certain additional advantages.

The secretariat of the Economic Committee then provides support in terms of implementing and monitoring the job protection plan.

In the event of subsequent collective redundancies, the topics that need to be addressed in the context of redundancy plan negotiations are identical to those provided for in the job protection plan.

Businesses with a job protection plan approved by the Ministry of Labour and Employment during the 6 months preceding the start of redundancy plan negotiations need not renegotiate the measures provided for in the job protection plan, only the level of any financial compensation.

Who to contact

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