Collective agreements
A collective labour agreement is a contract concerning working relationships and conditions of employees bound to an employer by a contract of employment governed by private law, concluded, on the employee side, by one or more employees’ trade unions and, on the employer side, by:
- a particular undertaking;
- one or more employers’ professional organisations; or
- a group of undertakings or a set of undertakings whose production, activity or profession is of the same nature, or which constitute an economic and social entity; if the parties entitled to enter into contracts so decide.
By means of a collective agreement the contracting parties decide upon a legal framework which will apply uniformly to employees in the field of activity concerned. Thus, a collective agreement is an extremely important contract in so far as it may bind non-signatories without having to be transposed into the general law by another instrument, except in the case of a declaration that it is generally binding.
Any collective agreement conforming to the legal provisions may be declared generally binding.
Collective agreements that are not declared generally binding shall apply to a particular undertaking or to a group or set of employers, whereas those which have been declared to be generally binding by a Grand Ducal Regulation shall apply to all undertakings in any sector, branch, profession or specified type of activity.
The declaration that an agreement is generally binding must give a detailed and precise description of the scope of the agreement. A collective agreement which has been declared generally binding must therefore specify exactly the undertakings to which the agreement applies. Sometimes, a reference to the activities, sectors, branches or professions may suffice. Thus, it is the activity carried on by the employer, and not that carried on by the employee, that makes it possible to determine what agreement is to apply.
It is to be noted that there can be only one collective agreement that applies either to an undertaking, a group or set of employers, or to a sector, branch, profession or type of activity.
Also, a single agreement must govern the working relationships of all the employees either of an undertaking, a group or set of employers or of a sector, branch, profession or type of activity.
However, undertakings having clearly separate divisions and carrying on different activities may decide to apply more than one collective agreement to their employees. In such circumstances, each division of the undertaking concerned shall apply the collective labour agreement corresponding to the activity carried on by that division.
It should also be noted that only collective agreements that have been declared generally binding shall apply to undertakings governed by foreign law, which are not legally established within Luxembourg territory, and to their employees who are employed on their behalf.
At the present time, collective agreements exist for certain sectors and certain undertakings which apply only to a single category of employees – workers or private employees. Without prejudice to the principle of the unicity of the collective labour agreement, the Law of 13 May 2008 introducing a single statute takes account of that reality and for such cases lays down a transitional provision whereby employees at present not covered by an existing agreement automatically, and possibly against their will, fall within the scope of a collective agreement initially applicable to the other category of employees only.
The transitional period provided for by that law shall apply to all collective agreements concluded after 1 January 2009, the date of entry into force of the Law introducing a Single Statute and before 31 December 2013.
It should also be noted that, as from 1 January 2014, employers will be able to conclude only one collective agreement for all their employees.