In order to protect jobs and thus prevent redundancies, the Luxembourg labour law allows businesses, under certain conditions, to resort to various short-time working (chômage partiel) schemes depending on the nature of the difficulties encountered.
The short-time working scheme in the event of force majeure can be applied in exceptional circumstances to businesses who encounter economic difficulties following the occurrence of an event beyond their control and which prevents the continuation of their normal economic activity.
Any business making use of short-time working due to an event of force majeure undertakes not to make employees redundant for economic reasons.
During the short-time working period, the State reimburses the business 80 % of the salaries normally received by the employees during the non-work periods. Reimbursement is limited to 250 % of the social minimum wage. The business still has to pay social security costs and salaries in respect of hours worked.
Carry out your procedure:
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- Chômage partiel - demande d'octroi
hort-time working in the event of force majeure applies to businesses that can no longer carry out their activity due to the occurrence of an external event beyond their control, other than damage to the production equipment.
- businesses in the building and civil engineering sectors as well as related skilled crafts sectors who carry out their normal activity on building sites and are unable to continue their activity due to bad weather conditions;
- businesses that are unable to carry out their activity following a natural disaster or accident destroying or damaging their production equipment or premises;
- businesses that have suffered from a decrease in orders from one of their customers due to a commercial decision taken by the customer or following the arrival of a new competitor on the market.
Short-time working in the event of force majeure can be applied to all employees with their place of work in Luxembourg, whether they are under a permanent employment contract or a fixed-term employment contract.
Short-time working schemes can not be applied to apprentices, to temporary workers or workers having tendered/received their notice.
To apply for short-time work in the event of force majeure, the business must:
- be established in Luxembourg;
- hold, where applicable, a business permit granted by the competent authority;
- be impacted by the economic or legal consequences of an external event which makes it impossible for the business to continue their normal economic activity. The event must not have been caused by the business;
- undertake to not dismiss any employee for economic reasons.
Short-time working in the event of force majeure comes within the scope of complementary job protection measures which, if the company's economic situation so requires, can be combined and/or applied simultaneously.
Short-time working applications must be submitted by the 12th day of the month preceding the requested short-time working period (for example, before 12 September for a short-time working application relating to the month of October).
Short-time working can never be granted retroactively.
Submitting the application
The business must submit its application for short-time work to the secretariat of the Economic Committee and indicate the external event which made the continuation of the economic activity impossible. Each application will be treated with complete confidentiality.
The form must be duly signed by the business manager and by the staff delegation. By signing the form, the staff delegation acknowledges that the business manager has received the delegation and informed them about the application for short-time work.
If the company employs less than 15 employees or does not have a staff delegation, each employee concerned must sign the form individually.
Documents to be submitted with the application
The initial application must be accompanied by the following documents:
- the annual financial statements for the last 3 financial years;
- proof of payment of social security contributions.
Admissibility of the application
The Economic Committee analyses the balance sheet and financial situation of the business and checks:
- the existence of an external event allegedly impacting the business;
- if the event was caused by the business itself;
- whether the business is actually unable to carry out its normal activity.
It submits a written opinion to the Government Council (Conseil de Gouvernement) who will decide whether or not to allow short-time work.
After the decision taken by the Government Council, the Economic Committee will send the decision by post and by fax to the number indicated in the application. No information will be provided by telephone.
If the application is approved, the business is authorised to use short-time working for as long as the consequences of the event make it impossible to continue its normal business activity.
For applications following the initial application, the business must:
- submit the duly-signed application for short-time work before the 12th of each month;
- indicate any changes in comparison with previous months (e.g. number of employees affected).
Maximum period of short-time working per employee
The permission to make use of the provisions concerning short-time working in case of force majeure can only be granted for a maximum of 1,022 hours per year and per full-time working employee. For persons working on a part-time basis, the limit of 1,022 hours are pro-rated.
Payment of salaries and social contributions by the employer
During the period of short-time work, the employer pays each employee:
- the salary due for every hour worked;
- as well as a compensatory allowance corresponding to 80 % of the worker's normal salary in respect of inactive hours.
Employers also have to continue to pay the following to the competent public administrations:
- social contributions (the employer's and the employee's share) and withholding tax on salaries paid for hours worked;
- and also social contributions (the employer's and the employee's share) and withholding tax on the compensatory allowance paid for inactive hours, with the exception of the following employer's contributions:
- accident insurance contributions;
- and contributions for family benefits.
Reimbursement of the compensatory allowances paid by the State
Within 2 months following the month under short-time work, the employer must send the ADEM a monthly declaration of claim, the individual forms signed by the employees concerned by the short-time working and a statement of the amounts to the ADEM.
The State then reimburses the employer the compensatory allowance (80 % or 90 % of the gross salary) normally received by each employee for the inactive hours up to a maximum of 250 % of the social minimum wage.
Availability of the worker and return to work
Employees are not required to stay at work during inactive hours.
However, they need to remain at their employer's disposal who may, at any time, call the employees back to work in the event of a pick-up of activity.