Blank cheque for an unprecedented social bloodbath!

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On 29th July 2016, just before the parliamentary holidays and during the summer lull, Finance Minister Pierre Gramegna put forward a draft law (number 7024) aiming to transpose the regulation EU 2015/751. This relates to interchange fees for card payment operations, but also leads to a series of adjustments and modifications in several important laws related to the financial sector.

In particular, the draft law foresees modification of article 41 of the 5th April 1993 law concerning professional secrecy, in order to facilitate the outsourcing of services. In real terms this would mean, if the draft is adopted, that the obligation for professional secrecy would be weakened considerably. Financial sector data processing, which today is carried out exclusively in Luxembourg, could be offshored without any problem.

ALEBA believes that it is high time that we set alarm bells ringing. For Laurent MERTZ, ALEBA’s secretary general, this draft law is “a blank cheque from the government for an unprecedented, major social bloodbath in the financial sector (relating principally to IT jobs) and this within a short space of time. Initial estimates would see 5,000 financial sector IT professional jobs being eliminated quickly, both in PSF companies and in other financial sector institutions. Unfortunately, this figure seems realistic, and even probably underestimates the impact. It does not take the knock-on impact into account, which at the moment appears likely but hard to quantify.”

This radical weakening of professional secrecy rules would permit the transfer of the obligation for keeping data private to entities based outside the Grand Duchy. ALEBA thinks this would open the way for many of these IT activities to be outsourced abroad on a large scale and over a short time scale. Of course this would be carried out in the interests of cost cutting. “The financial sector is directly affected by the 3rd Industrial Revolution, FinTech, the digital economy and so on. We cannot deny this, and the sector must accept that changes are inevitable and fresh thinking is required. But this draft law goes much to far, and would deal a sharp blow to the financial sector and its staff. This comes at a time when the current social climate is difficult, with a restrictive and costly regulatory environment, tough economic circumstances, and little optimism about the medium term outlook,” added Laurent MERTZ. ALEBA refuses to accept this act of self-sabotage.

“Be in no doubt that behind the desire to change professional secrecy rules are international lobbies but also Luxembourgish employers groups. They see an opportunity to cut their costs further to increase profits without any consideration for staff. Of course we cannot agree with this. It is all the more shocking as we have the feeling that this regulatory change is being planned on the sly. We thought that we would have been consulted on this matter, but nothing has happened, so we will ask to meet Finance Minister Pierre Gramegna as soon as possible. This will be an opportunity for the financial sector’s leading trade union to explain their point of view. The government has a clear social responsibility to financial sector staff, and they have fallen short by acting in this way. It would also be interesting to hear the views on this subject of the Financial Sector Surveillance Commission (CSSF), the Bankers Association (ABBL), and the Association of the Luxembourg Fund Industry (ALFI), all of which the government says in its evaluation sheet were consulted in the preparation of draft law 7024…

ALEBA would like to underline that according to the latest information, a decisive meeting related to this draft law will be held this Thursday 24th November at the Ministry of Finance.

(Press release oh the 23th november 2016)

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Press contacts:

Laurent MERTZ, General Secretary (laurent.mertz@kbl-bank.com / (+352) 621 232 295)

Sandra CARVALHO, Head of Communications & Strategy (sandra.carvalho@aleba.lu / (+352) 671 223 228)

ALEBA has more than 10,000 members and is by far the largest trade union in the Luxembourg financial sector. In November 2013, at the most recent elections for personnel delegations, ALEBA received the support of more than 65% of voters in the financial and related sectors, giving it more than 700 personnel representatives in more than 150 companies. This huge level of trust given to ALEBA has been won over many decades since 1918, thanks to our open, honest, independent and transparent union activity. For more information see www.aleba.lu.