ALEBA’s goal has always been to understand the concerns of the financial sector employees that it represents. We have prepared a series of fact sheets intended to inform you and to address, in practical terms, some of the questions that you have asked us. Your obligations and your rights in different situations, how the institutions around you function, the organisation of the employee representative bodies at your company: find out more today!

This information is of course in addition to the personal support and advice our staff provide to each member, and in terms of employment law and social legislation in particular.

I'm ill: what do I need to do?

A medical certificate is not required for a one- or two-day absence from work. From the third day of absence onward, you must provide your employer and the National Health Fund (Caisse Nationale de Santé – CNS) with a medical certificate confirming that you are unfit for work.

Written proof must be available to the employer by the third day of absence. One section must be sent to the CNS, another to your employer, and the third one is for you to keep. It is important to respect this legal deadline of three days, otherwise you run the risk of being dismissed for gross misconduct.

In the event of emergency hospitalisation, however, the medical certificate may be given to the employer within eight days of hospitalisation. In all cases, the employer must be informed on the same day that you are unable to work. For peace of mind, you can even send your certificate by registered letter with acknowledgement of receipt.

Can I go out if I am ill?

You are not allowed to leave your home for the first five days of your sick leave, regardless of your doctor’s opinion of your health. After these five days, you may leave your home, but only between 10:00 and 12:00 and from 14:00 to 18:00. Essential outings for treatment or diagnosis in connection with your illness, or related to summons by the Medical Board of the Ministry for Social Security are authorised, but you must be able to justify them if requested by an inspector. All other outings outside these times must be authorised in advance by the CNS.

Can someone come to check on me?

The CNS may perform a check outside the periods during which you may leave your home as of your first day of sick leave, either on its own initiative or at your employer’s request. Checks may be performed in cases where you are supposed to stay at home and are not authorised to go out. A CNS inspector will then visit your home, although this inspection may also be performed on public premises. If you are absent at the time of the inspection, you will find a form to be completed in your letter box. You must then provide a written explanation for your absence and send it within two days of the inspection (with the postmark serving as proof of date).

The management committee of CNS will then decide on a fine, where applicable. 4/Who pays me? Your employer pays you up to the 77th day of your absence. The employers’ mutual insurance scheme, to which your employer pays contributions, then reimburses 80% of the paid salary to your employer. In simple terms, the CNS takes over after the 77th day. You are entitled to receive your salary and other benefits stated in your employment contract in full until the end of the month in which the 77th day of your sick leave occurs. For the period covered by the CNS (from the 78th day onwards), your salary corresponds to the basic remuneration (plus any additional and incidental income) on the condition that this is payable monthly in cash (the allowance for your company vehicle is therefore excluded, for example). See next month’s edition for our practical guide on issues related to ending the working relationship.

Can my employer fire me?

No, if you have sent your medical certificate to your employer on time, you are protected from dismissal for the first 26 consecutive weeks of illness.

Where should I send my certificate?

If you go on sick leave, you must send your medical certificate without putting a stamp on your envelope (in Luxembourg) to the following address: CNS, Département des Indemnités Pécuniaires, L-2979 Luxembourg. Always state your (13-digit) social security number on your certificate!

The National Pension Insurance Fund (Caisse Nationale d’Assurance-Pension - CNAP) in seven questions

Are you planning for your retirement? Do you have any questions? ALEBA Info tells you all about Caisse Nationale d’Assurance-Pension, Luxembourg’s official pension body.

1) What is the National Pension Insurance Fund (Caisse Nationale d’Assurance-Pension) ?

The National Pension Insurance Fund or CNAP is a social security institution. As its name suggests, it is responsible for managing pensions in Luxembourg. It was created following the merger of four pension funds: the Caisse de Pension des Employés Privés (CPEP), the Établissement d’Assurance contre la Vieillesse et l’Invalidité (AVI), the Caisse de Pension des Artisans, des Commerçants et Industriels (CPACI) and the Caisse de Pension Agricole (CPAG*).

2) When was it created?

It was created in 2008**. The law of 13 May 2008 introducing a single status for all employees, which came into force on 1 January 2009, put an end to the distinction between the socio-professional categories of private sector employees and blue-collar workers in terms of social security and employment law.

3) What is its principal role?

Its role entails being the specific point of contact for private sector employees working in Luxembourg or earning a replacement income there, and providing benefits in three cases:

  • Old age
  • Disability
  • Survival

Its staff are available to handle scheme members’ enquiries at its branch in Luxembourg City, no appointment necessary.

4) Who runs it?

It is run by a management committee. This comprises representatives elected by the various professional chambers, on the basis of the electoral results obtained

in these chambers’ elections. There are eight private sector employees appointed by the Chambre des Salariés (CSL).

The Chamber of Commerce sends a “non-employee” representative, as does the Chamber of Skilled Trades and Crafts and the Chamber of Agriculture. Four “employer” representatives are appointed by the Chamber of Commerce, whereas the Chamber of Skilled Trades and Crafts appoints just one. There are as many permanent members as substitute members. The Chairman, a civil servant, is appointed by the Grand Duke. The committee members’ term of office is five years.

The Management Committee draws up CNAP’s internal regulations. It approves the annual budget, the annual breakdown of income and expenses and the balance sheet; it also decides on the legal benefits within the limits of the laws and regulations. It makes decisions concerning CNAP’s employees.

5) Is ALEBA represented?

Yes, ALEBA Vice-Chairman Christian Hoeltgen sits on the Management Committee as a permanent member.

6) How is it funded?

CNAP is funded by member contributions and other resources such as income from investments.

7) Where is its registered office?

CNAP is located at 1a, boulevard Prince-Henri, L-1724 Luxembourg. Tel: (+352) 22 41 41 -1

Fax: (+352) 22 41 41-6443



Opening hours:

Monday to Friday, 08:15 to 16:00.

What about my pension?

You can see the amounts of the contributions deducted in respect of your pension on your payslips. The percentages deducted are 8% for the employee, 8% for the employer and 8% for the government.

The statutory retirement age in Luxembourg is 65. To claim a pension you need to have paid in at least 120 months’ contributions. To claim your pension at age 57 you need to have paid 40 years’ contributions, i.e. 480 months. The old age pension starts on the day of the member’s 65th birthday.

In the case of early retirement, members receive their pension on the day the relevant age and payment period conditions are met.

To ensure a smooth transition to retirement, we recommend that you apply for your pension 2 – 3 months before you leave work. Cross-border workers whose last place of work was in Luxembourg must also apply to CNAP for their pension. If they have been in paid employment in their country of residence, the relevant pension fund will forward the paperwork to CNAP. For more information visit

All you need to know to about the Employment Tribunal

What is the Employment Tribunal?

Have you ever wondered what the role of this legal body is, and how it is composed? Is ALEBA represented on it? Here are the answers to your questions.

What are its powers?

The Employment Tribunal is a court with legal jurisdiction in the same way as the police courts and magistrate courts, which rules on civil and commercial matters. It deals with company disputes.

The Employment Tribunal hears disputes relating to employment contracts, supplementary pension schemes, insolvency insurance and apprenticeship contracts.

Its role is both to deliberate and to take the “employee” point of view of the case. It must be objective and fair.

How is it composed?

It comprises a chairman and two assessors. The first assessor represents the employee(s), and the second the employer. They are selected from a “list of elected candidates put forward by the relevant professional chambers”. Their term of office is five years, and is renewable. The clerks at the magistrate’s court perform the Employment Tribunal’s clerical duties.

Is ALEBA represented on the Employment Tribunal?

Yes, ALEBA has four members representing it. Jim Schneider, ALEBA’s Vice-Chairman is the permanent assessor in Luxembourg City, and ALEBA Chairman Roberto Scolati is the substitute. Nico Diedenhoffen acts as permanent assessor in Diekirch. His substitute is Carlo Krier.

When should I use the Employment Tribunal, and how?

An employee uses the Employment Tribunal to take legal action against his or her employer. The process starts with the lodging of an application. It is drawn up either by the employee, or by a lawyer defending his or her interests. There are two types. A summary application (requête en référé) enables an employee to obtain an immediate ruling, ordering the employer to pay the employee the amounts owed. A full application (requête au fond) is used, according to the Chamber of Employees “when there may be grounds for disputing the ruling against the employer”.

What is the procedure for a case brought at the Employment Tribunal?

The application is submitted in writing, including the first name, surname, profession and address of the employee. The employer’s contact details and the reason for the application must be provided. The applicant is required to provide a brief description of the case and state the amounts that he/she is claiming from the employer. The grounds for the application must be set out, together with their legal basis. Supporting documents must be enclosed with the application. The application is signed and dated by the employee or his/her lawyer. Before lodging an application, the applicant can send a formal notice to his/her employer by recorded delivery letter. In this notice, the applicant sets a deadline for payment of the outstanding sums.

Both parties will receive a notice to appear from the clerk of the Employment Tribunal. The notice to appear will indicate the date, time and venue for the hearing. On the day of the hearing, the parties attend the court in person or are represented by their lawyers. The case is not argued at the preliminary hearing. A second date is set for hearing the arguments. At the second hearing, the parties must exchange the supporting documents that they are going to submit to the Tribunal.

If the case is argued, the parties’ explanations are heard by the Tribunal, which takes receipt of the documents. At this point, the case is deliberated and a date is set for the ruling.

Where is it?

The Employment Tribunal has three sites: Diekirch, Luxembourg City and Esch-sur-Alzette

Diekirch Employment Tribunal

Bei der Aeler Kirch, L-9211 Diekirch Tel: (+352) 808853-1

Luxembourg City Employment Tribunal

Bâtiment JP, Cité judiciaire, L-2080 Luxembourg Tel: (+352) 475981-227 (mornings)

Esch-sur-Alzette Employment Tribunal

Place Norbert Metz, L-4006 Esch-sur-Alzette, Tel: (+352) 530 529 300

The little-known role of the Compensation Fund

“Managing the compensation reserve of the general pension scheme”. This is the role of the Compensation Fund (Fonds de Compensation – FDC) The Compensation Fund was set up in 2006 pursuant to the amended law of 6 May 2004 governing the administration of the assets of the general pension scheme. The compensation reserve holds the surplus of the receipts of the National Pension Insurance Fund (Caisse Nationale d’Assurance Pension) over its expenditure.

The purpose of the reserve is to “minimise the negative impact of external factors on the level of contributions or disbursements that may lead to sharp variations in contribution rates”. The money is invested through an undertaking for collective investment set up by the Fund itself. It is a limited company called “Fonds de Compensation de la Sécurité Sociale, SICAV-FIS” (FDC SICAV-FIS).

This limited company is regulated by the Financial Supervisory Authority (Commission de Surveillance du Secteur Financier -CSSF). These investments help to safeguard the future of the general pension scheme. At 31 December 2012, the general pension scheme’s total reserves amounted to €12.64 billion. Of this sum, €11.79 billion was managed by the Compensation Fund, and €848 million was managed by the National Pension Insurance Fund.

Of the Fund’s €11.79 billion, €10.46 billion was invested through FDC SICAV-FIS. The Management Committee has 12 permanents and 12 substitutes. In the permanent group, four members represent the government, four members represent employers and four members represent scheme members. Jean-Marie Scheider (Foyer Assurances), Vice-Chairman, represents ALEBA. The breakdown of positions among the substitutes is the same, with Micky Grulms (BIL) flying the ALEBA flag.

Note that Jean-Marie Schneider is also a member of the General Meeting of FDC SICAV-FIS and the Board of Directors. The Board of Directors is assisted by the Investment Committee, which is composed of six members, three of whom are external experts.

Lorsque le salarié quitte son emploi (1/2)

Ce mois-ci, nous faisons le point sur la cessation de la relation de travail lorsque c’est vous qui en êtes à l’origine. Deux cas de figures peuvent alors se présenter : soit votre démission, soit votre départ en retraite. Il est également important faire la distinction entre un contrat à durée indéterminée (CDI) et un contrat à durée déterminée (CDD).

La démission est un acte par lequel vous mettez à votre initiative unilatéralement un terme à votre relation de travail. La mise à la retraite est acte par lequel vous (ou votre employeur) mettez un terme à la relation de travail en raison de votre âge. Dans la pratique, voici plus précisément ce qu’il faut retenir :

Démission Comment ? La loi prévoit que votre démission doit être envoyée en courrier en recommandé ou remis en main propre, dans les deux cas contre accusé de réception.
Délais : Quand ? Le préavis à respecter dépend de votre ancienneté: .

En principe, vous devez effectuer votre CDD jusqu’à son terme.

Si vous décidez de l’interrompre avant ce terme, un CDD ne pouvant être supérieur à 2 ans, le préavis est toujours d’un mois.

Ancienneté < 5 ans > 5 et < 10 ans > 10 ans Préavis 1 mois 2 mois 3 mois
Retraite Comment ? La loi ne prévoit pas de formalisme particulier. Il est cependant préférable d’informer votre employeur par courrier recommandé ou par courrier remis en main propre contre accusé de réception.
Quand ? Comme la loi ne prévoit pas de formalisme, elle ne prévoit pas non plus de délais. Il est cependant d’usage d’informer votre employeur dès que la date de mise à la retraite est connue. Dans le cadre d’un CDD, il est utile de connaître sa date de mise à la retraite au moment de la conclusion de contrat de façon à pouvoir faire coïncider la durée du contrat avec la durée du travail restant à couvrir jusqu’à la mise en retraite.

Dans tous les cas, n’hésitez pas à contacter notre Service juridique en cas de question ou pour tous renseignements complémentaires. Le mois prochain, nous aborderons la cessation de travail à l’initiative de votre employeur. Il n’est évidemment plus question de choix dans ce cas de figure souvent douloureux et les processus sont différents. Nous vous expliquerons également en détail l’aide et le support que vos Délégués ALEBA peuvent vous apporter, dans ces circonstances.

Rightly or wrongly classified senior executive? It is time to define the RIGHT situation!

Rightly or wrongly classified senior executive? It is time to define the RIGHT situation!

Not a day goes by without ALEBA’s legal department being contacted by a member or a staff representative to report a “wrongly classified senior executive” in their company.

This is hardly surprising given the many rights that are directly attached to this status: salary, overtime, bonuses, leave, etc.

But what is a “wrongly classified senior executive”?

The term wrongly classified senior executive refers to a situation where an employee has been hired or promoted within a company as a senior executive, thereby excluding said employee from the scope of application of the relevant sectoral collective labour agreement, without satisfying the current legal conditions to qualify for the status of senior executive.

Imagine being hired or promoted within a company as a senior executive, without qualifying as such. Your tasks and duties become increasingly time-consuming. You work overtime for years, without knowing that in reality you were protected by your sector’s collective agreement. Years of work and stress, and to cap it all, without being paid for all the overtime worked, simply because you were wrongly classified.

Another fictitious, but not impossible scenario: a consultant, established in Luxembourg, presents the Luxembourg market to a foreign company as being business friendly, highlighting a legal loophole which gives companies access to a highly skilled workforce without having to pay overtime, simply by attracting employees with the lure of “senior executive” status (despite the fact that such status does not exist in Luxembourg) together with an inflated job title and a company car to mislead him or her.

The reason why this issue has received such extensive media coverage recently is because the number of employees potentially affected is reaching worrying proportions. Some estimates suggest that more than 10,000 employees in the financial sector could be affected.

According to an article in L’Essentiel, the Minister for Employment, Nicolas Schmit, undertook in February 2017 to investigate the matter.

Pending the results of the Minister for Employment’s investigation, ALEBA has decided to provide a brief update on the issue, relying in particular on current case law, in order to get the facts on the table.

As an employee, does this issue concern me?

If you work in a sector covered by a collective labour agreement, then yes!

If you have any doubts, ask our legal department to assess your situation.

It should be noted that only two statuses exist in the Grand Duchy of Luxembourg: senior executive and employee. It is therefore important to avoid confusing the statuses recognized in the Grand Duchy of Luxembourg with the status classifications of neighbouring countries, such as France for example (which recognizes a third “middle management” status).

What defines a senior executive?

Article L.162-8 of the Luxembourg Labour Code defines a senior executive as follows:

“[…] The following are considered as senior executives within the meaning of this title: employees having

  •  a significantly higher salary than that of employees covered by a collective labour agreement or based on another salary scale, taking account of the time needed to perform their duties,
  • if this salary is paid in consideration for the exercise of real and effective management powers or where the nature of the tasks involves a clearly defined authority,
  • wide-ranging autonomy in the organisation of work and
  • a high degree of freedom as regards working hours, and no constraints as regards such hours […]”.

It is important to emphasise that the above-mentioned criteria are cumulative, that is to say all of the above-mentioned conditions must be met in order to be classified a senior executive within the meaning of the law.

If even one of them is not met, then the person in question cannot be considered to be a senior executive in accordance with current legal provisions.

It is therefore entirely possible to have an annual salary of EUR 150,000, a company car, a smartphone and still be an employee covered by a collective agreement if the senior executive criteria are not met.

Needless to say, therefore, an analysis of the employee’s status should not be limited solely to the remuneration criterion, as is often the case in practice.

The remuneration criterion or the main criterion for the employer

The concept of a “significantly higher salary” differs between sectors.

It is also the criterion that the employer uses to try and focus the analysis of the employee’s status, which is, as already noted, just one of many criteria and not the main criterion.

The law does not provide a clear, unequivocal answer in this regard. Current case law has established a calculation based on two cases, by comparing the highest annual remuneration that can be earned by an employee covered by a collective agreement, including the benefits of the collective agreement, with that received by the employee having lodged the appeal with the employment tribunal:

  • If this is less than 10%: the condition of a significantly higher remuneration is not met and the employee is therefore to be considered as an employee covered by a collective agreement and not as a senior executive.
  • If this is greater than 20%: the condition of a significantly higher remuneration is met and the employee may be considered as a senior executive, if the other legal criteria are met.

In the banking sector, ALEBA estimates for 2017 that the total annual remuneration of an employee covered by a collective agreement in group VI, threshold 2 is around EUR 100,000. The significantly higher salary for a senior executive should not, in practice and in accordance with case law, be less than EUR 120,000.

The criterion of real and effective management powers or where the nature of the tasks involves a clearly defined authority

The position held by the employee must include duties and obligations which are not entrusted to a simple employee (e.g. supervisory powers, number of people reporting to him or her, etc.).

More importantly, the employee must have more important responsibilities to be considered as a genuine senior executive (e.g. category A signing authority, as case law considers that category B signing authority is insufficient to presume the existence of such status).

Maria Petrosillo, ALEBA’s Head of Social and coordinator for almost 20 years, uses an interesting comparison when advising members and representatives.

She compares senior executives with army generals and employees covered by a collective agreement with the other officers. For her, the number of generals (who issue orders) in a company cannot be greater than or equal to the number of soldiers, regardless of their title. For example, a captain, although a high-level rank, remains a junior officer.

ALEBA considers that a company cannot have more than 5-10% of senior executives.

The organisation chart could be a useful indicator for employees to position themselves and thus assess their position within the company.

The criterion of wide-ranging autonomy in the organisation of work

The employee’s tasks and duties are geared towards achieving an objective or result. To that end, he or she does not simply carry out management orders, but must be able to carry out his or her work autonomously.

As the duties of each employee differ, we advise you to obtain a job description in order to make it easier to analyse your status.

The criterion of a high degree of freedom as regards working hours/no constraints as regards such hours

Senior executives work longer hours than an employee covered by a collective agreement in order to carry out their tasks and duties (e.g. international travel, etc.). This is one reason why they are better paid.

It is therefore inconceivable for an employer to impose working hours on a senior executive. The legislature has made a point of insisting that a senior executive must have a large degree of freedom as regards working hours and no constraints as regards such hours.

Therefore, an employee who has specific working hours, or who has to clock in or out, in accordance with the working hours specified in his or her contract of employment, cannot be considered to be a senior executive.

If it is so clear, why does such abuse exist?

This definition has only existed since the enactment of the Law of 30 June 2004 on collective labour relations.

Prior to that, we had only the definitions resulting from Luxembourg case law established with regard to disputes heard by labour courts.

Today, the situation is clear and it is the employer’s responsibility to comply with current legislation. It would be detrimental to the efficient running of companies and the health of employees to neglect the importance of putting the situation on a proper footing in light of current legislation.

It is worth recalling that protecting the health all employees is part of the employer’s social responsibilities.

In France, the Court of Cassation has ruled that it is the responsibility of human resources to maintain good industrial relations and thus protect the health of employees.

In a ruling dated 8 March 2017, the Court upheld the dismissal of a human resources manager on grounds of serious misconduct for having taken no action with regard to the company’s management methods. The Court considered her to be an accomplice to some extent, who had contributed to the deterioration in industrial relations within the company and had indirectly endangered, with the management, the physical and psychological health of employees.

The French Court of Cassation has therefore underscored that, over and above the functional aspect of human resources (recruitment, payroll management, etc.), there is a human, operational aspect in managing employees. The failure by human resources to react to the employer’s exploitative behaviour, thereby endangering the physical and mental health of employees, makes the human resources manager complicit in “endangering the lives of others”, a concept which exists in criminal law.

How can we prevent such abuse?

The social dialogue between management and the delegation, together with ALEBA, is the preferred solution to ultimately solve this problem.

“How can I determine whether I really am a senior executive or not?”

While some people will retort that “everything is in employment contract”, it is important to bear the following in mind.

An employee’s status is analysed in concreto, i.e. with reference to the situation at the time when the status was defined or amended.

This means that the employment relationship is likely to change over time: the contract (provided that the working relationship is established in writing) may be amended; there may be one or more written (or even oral) amendments; the nature of your job and your role may change, resulting in more responsibilities, etc.

There are other factors to be taken into consideration, such as acquired rights and situations involving the transfer of a company (for example, a merger or a sale).

It is therefore difficult to rely solely on the employment contract to determine your status.

Please don’t hesitate to ask ALEBA’s legal department to analyse your situation!

However, these are the main components of a body of evidence:

  • The employment contract
  • Amendments to the employment contract
  • Current job title and position held
  • Job description
  • Pay slips

The following factors are also relevant:

  • The way in which working time is organised within the company
  • The system for clocking in and out
  • Internal regulations
  • The organisation chart/schematic representation of work relations

Be wary of certain factors that create the illusion of being a senior executive, without being sufficient to meet the relevant criteria:

  • Whether you manage a team
  • Having a company car
  • Business travel
  • Having a company smartphone
  • Teleworking

“Can I ask to have my situation corrected retroactively?”

Yes. You can attempt to resolve such a situation amicably within the framework of employer-employee relations with the help of your union or staff representative, or, if necessary, by instituting legal proceedings.

However, please note: the recovery of unpaid wages is subject to a three-year time limit.

“Can I choose the status that I want?”

No. Article 162-8 of the Luxembourg Labour Code stipulates that any clause in an employment contract intended to exclude an employee from the scope of a collective labour agreement is void. In other words, even if an employee wishes to be hired as without being covered by a collective agreement, an employer may not do so if such a status is not appropriate.


The situation of wrongly classified senior executives is an open wound that has neither been treated nor closed, and today it has repercussions that go beyond the issue of salary.

The impact on health (e.g. risk of burnout owing to the poor management of working hours) and on private life (e.g. too many constraints, too much overtime or recovery time to achieve a work/life balance) are very serious, as clearly illustrated by the alarming figures on work-related psychosocial risks.

It is therefore time to heal this wound and close it properly to prevent the risk of collateral damage.

Wrongly classified senior executive (Part 2)

A few months ago ALEBA carried out a thorough investigation into the issue of wrongly classified senior executives and produced an article summarising the current legal position and the position in Luxembourg case law.

Who could have imagined that it would have attracted such attention: ALEBA’s communications department logged over 5,000 readers across all the social media and material issued. The coordination and legal departments were bombarded with requests from banking and insurance representatives seeking insight into the controversy and to have ALEBA check the position at their companies. The social department noted a striking link between certain cases of professional burn-out (or other psycho-social risks) and the consequences of this wrongly classified senior executives status.

ALEBA’s departments are receiving more and more enquiries; employee representatives are increasingly putting the topic on the agenda of representative-management meetings; an increasing number of employees are asking ALEBA to check their classification and HR departments are assessing their potential “complicity” following the ruling by the French Court of Cassation of 8 March 2017 and its potential implications for Luxembourg law in the future.

The question asked most frequently nevertheless remains: what are the implications in real terms of this misclassification for an employee?

For a clearer understanding of the issue, take for example X, recruited to work in a bank’s IT department in 1986 in a position covered by the banking collective agreement at the time, promoted to project manager at the end of 2008, reassigned (without amendment to his contract) beyond the scope of the collective agreement with effect from 1 January 2009 and currently earning a gross annual salary of €60,000 (€5,000 per month). On average he works 55 hours a week, not counting any foreign business trips.

The main implications of this are as follows:

  • Remuneration:

Hypothesis one: If X had really been a senior executive his basic annual salary would now have been around €120,000. In theory his employer is therefore paying him €60,000 less than his “status” would normally grant him.

Hypothesis two: Assuming in this example that the position of project manager would meet all the criteria of group function VI, “IT project manager”, as provided for in the banking collective agreement, his employer should now be paying him a salary of up to €100,000. In this instance, a shortfall of up to €40,000.

Hypothesis three: X earns €5,000 per month over 12 months. By omitting the 13th month, the June bonus and the other remuneration relating to the collective agreements, he is losing out on approximately €10,000 a year.

In short, X is losing out on somewhere between €10,000 and €60,000 a year.

As the law limits salary-related claims to the last three years, once he has filed his claim with the courts, X can at best hope to obtain redress for 2015–2017 only, as the other years (2009–2014) are definitively time-barred.

  • Overtime:

Note that in theory, not only are senior executives excluded from the scope of the collective agreement for their sector, they are in addition not subject to the laws on working hours and weekly rest (excluding public holidays and statutory leave).

Senior executives are therefore not paid overtime.

It is on this sensitive issue that the balance between professional and personal life can go awry. The much-celebrated work/life balance is significantly disrupted, depending on the number of hours’ overtime worked, on the pretext that it is “normal” for a senior executive to work overtime.

Let us not forget that, as in other European countries, the Luxembourg legislator has deliberately limited weekly working hours to 48 hours so that employees have enough time to cultivate a personal life, and also to prevent a rise in psycho-social risks or the diminution of the private individual in favour of the legal entity that is the company.

According to Eurostat, employees in Luxembourg worked 1,909 hours in 2015 on average. Luxembourgers work 263 hours (32.8 days) a year more than their French counterparts and 151 hours (18.8) more than the Belgians.

As a result of his key position in the company and in accordance with the law, a senior executive effectively waives legal protection for this balance in exchange for said salary, which is significantly higher than the best-paid workers covered by a collective agreement.

Getting back to our example, on average X works 15 hours a week on top of the 40 hours already worked, for no additional salary and instead of spending time with his family or on personal interests.

If he wants to claim these hours, he must not only prove that he actually worked them, but what is more difficult prove that his employer (or line manager) agreed to him working them.

In this instance that corresponds to around €2,500 a month, or €30,000 a year, not counting the other items that could be added to this (such as public holidays).

  • Loss of protection against dismissal:

An employee covered by a collective agreement in the banking and insurance sector is protected against dismissal on economic grounds for two years (article 5.3 of the banking or insurance CCT) if there is a change in the employer’s legal situation, in particular as a result of inheritance, sale, merger, transformation of funds or conversion to a company, i.e. in the event of a business transfer.

Until X manages to have his real status recognised by either his employer or the court he will not be able to invoke this protective clause in the collective agreement as, strictly speaking, it does not appear in his employment contract.

In practice, wrongly classified senior executives are frequently invited to personal interviews with a view to making them an offer that disregards their misclassification and is therefore often much less attractive when compared with the benefits of a redundancy plan.

  • Exclusion from protective measures in the event of mass redundancies:

An incorrectly classified employee risks being excluded from the measures provided for by the law in the event of mass redundancies, whereas the law excludes employees not covered by a collective agreement from negotiations that aim to agree a redundancy plan.

Employees not covered by a collective agreement (especially wrongly classified senior executives) are left to their fate and often have to negotiate their own “exit package” under their contract terms, without automatic legal aid or corporate justice.

Redundancy plans in the banking and insurance sectors offer financial and above all social measures that are often more attractive (e.g.: extended notice period, a “safety net” if they are made redundant by their next employer, help with the cost of retraining outside the banking and insurance sectors, etc.).


  • If I ask to be covered by the CCT, will I lose my company car, smartphone, position and other benefits linked to my “executive” status?

NO! If these benefits are stipulated in your employment contract or can be demonstrated, joining a collective agreement should not result in you losing either your salary level or other items which the law calculates in the remuneration package. Company cars usually count as a benefit in kind, stipulated in the employment contract or in another official document (such as internal regulations). It is, however, worth having this point checked by one of ALEBA’s legal team so that he can determine for sure whether it is a company car, or simply a car made available to the employee for the requirements of his work.

  • If I ask to be covered by the collective agreement, will my employer be entitled to divide my salary by 13 or to “recalculate” it in order to include all the financial items stipulated in the collective agreement for my sector in my current salary?

NO! By law, employers must classify their employees under the correct status. If they do not, and they fail to add all the benefits stipulated in the collective agreement to employment contracts, they are in the wrong if they claim that they have to “recalculate” the salary. We should not lose sight of the fact that changing an employee’s salary in a manner that is unfavorable for the employee is tantamount to amending a substantive component of his employment contract. To do so, the employer must initiate the procedure provided for in article 121-7 of the Luxembourg employment code (notification by recorded delivery letter, possibility of demanding explanation, etc.) for cutting the salary. If the employer does not proceed in accordance with the terms provided for by law, the employee can have a court declare the unfavorable amendment made unilaterally by the employer null and void.

  • Should my employer include my bonuses in the calculation of my salary? Can he do this?

NOT NECESSARILY! Bonuses constitute what are known as “rewards” or “premiums”. If there is no bonus clause in a contract or in the collective agreement, this bonus constitutes a donation to be paid at the discretion of the employer and cannot therefore be calculated as part of the remuneration package.

For peace of mind, ask ALEBA’s legal advisers to check your situation for you.

  • My employer is refusing to include me under the collective agreement. What can I do?

Employees in this situation have three options, bearing in mind that this problem is systematically analysed on a case-by-case basis:

  • try to have your real status recognised on your own: In practice this is usually unsuccessful, unless an employee has the support of his union.
  • vote for his company’s employee representatives, who act by virtue of the law of 23 July 2015 on labour relations: In practice this approach is generally effective, as it creates a situation similar to a US-style class action resulting in joint action, combined with the tools of the law of 23 July 2015 on labour relations, to pursue a common cause or to negotiate the terms of inclusion under the collective agreement and the payment of back pay with the employer.
  • take legal action: In practice only dismissed employees and employee representatives dare to assert their rights in this manner.


  • Why doesn’t the Minister for Labour do something?

Minister for Labour Nicolas Schmit has promised to investigate this matter. Given that it involves case-by-case analysis, it is unlikely that the Minister will be able to check the employment contracts of each and every employee in the financial sector.

As part of its investigations, ALEBA supports the cause and is planning to present an investigation report shortly.

To ensure that the results are as realistic as possible, any employee who thinks they may be concerned by this matter is firmly encouraged to contact ALEBA as soon as possible (the survey will be completely anonymous).

  • What is ALEBA planning to do next?

ALEBA is continuing to gather as much information as it can and will present it to the Minister for Labour shortly. Depending on the outcome, ALEBA will have to think about possibly opening up the debate with a view to negotiating a special collective agreement for senior executives.

ALEBA will of course carry on advising and supporting any employees and representatives that request its help and support on this matter.

by Safouane Jaouid – Head of Legal at ALEBA

How many days of paid leave am I entitled to?

How many days of paid leave am I entitled to?

DISCLAIMER: Unless specified otherwise, this article only addresses the general cases of full-time employees working under a permanent employment contract (CDI) with no special status (other than the application of a Collective Labour Agreement, for either the banking or insurance sectors). We will discuss the taking of leave and the rights and obligations of employees when on leave in a subsequent article.

Article L.233-4 of the Labour Code stipulates that the minimum amount of paid annual leave is 25 working days per calendar year (from 1 January to 31 December). Employers are free to grant additional days of paid annual leave (but a smaller amount of leave cannot be imposed by employers or accepted by employees).

According to Article L.233-5 of the Labour Code, “working” days are “all calendar days, excluding Sundays and public holidays”.

The Collective Labour Agreement for the banking sector (CCT Banks) adds a day of leave for employees having achieved 25 years of service before the age of 50. CCT Banks and the Collective Labour Agreement for the insurance sector (CCT Insurance) add two days of leave for employees between the ages of 50 and 54 (regardless of the number of years of service) and three days for employees aged 55 and older. These days are acquired in the year of the birthday in question.

Finally, CCT Banks grants 8.5 “personal days” per year and CCT Insurance grants 9.5. The Collective Labour Agreements (CCTs) set forth a number of specific rules for these personal days, but with regard to the definition of employee rights, the rules are the same as for paid annual leave.

In the first year of an employment contract, entitlement to leave is only granted from month to month in proportion to the number of whole months worked (the law only considers a month to be “whole” if the contract covers a period of at least 15 calendar days. For example, employees having worked from 15 to 31 January are entitled to 1/12th of the amount of leave for the month of January. However, if they only worked from 18 to 31 January, they will have no leave entitlement for the month of January).

Entitlement to paid annual leave is calculated over the course of a calendar year (from 1 January to 31 December). Employees are entitled to the entirety of their leave for the year from 1 January. Employers cannot, therefore, object to employees taking their full leave entitlement at the start of the year. Of course, in this case, if the contract were to be subsequently terminated later in the year, the employee would theoretically be required to reimburse the employer for the excessive leave taken.

Employers can only reduce entitlement to paid leave in the event of unjustified absence. In that respect, certain unworked periods are legally considered as providing an entitlement to leave: absence due to sickness or accident, absence authorised by the employer (unworked notice period, dismissal, paid leave, extraordinary leave, etc.), public holidays and contractual holidays, industrial action and cases of force majeure (in which employees are unable to notify their employer in advance, except in the case of imprisonment). Specific attention should be paid to unjustified absences, which may, in certain cases, be deducted from the statutory leave entitlement by the employer.

Finally, the law stipulates that employees whose work is planned to be spread across at least five weekdays may only take five days of leave to cover the whole week, even if in reality they work in excess of five days a week.

By Matthias Lindauer, Legal Adviser