Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure LU-2020-12/303 – Updated – measures in Luxembourg
|Country||Luxembourg , applies nationwide|
|Time period||Temporary, 19 March 2020 – 30 June 2022|
Employment protection and retention
– Income support for people in employment (e.g., short-time work)
|Author||Patrick Thill (LISER) and Eurofound|
|Measure added||06 April 2020 (updated 28 June 2022)|
In view of the scale of the COVID-19 threat and the tangible repercussions on the survival of companies and their employees, the government decided on a 'force majeure / coronavirus' short-time working scheme with an accelerated procedure for all Luxembourg companies impacted by the crisis. The procedure has been simplified for all companies to speed up the treatment process following the Grand-Ducal Regulation of 18 March 2020 introducing a series of measures to combat COVID-19.
A company that resorts to short-time working in cases of a force majeure commits not to dismiss employees for economic reasons as long as the relevant government decisions remain in force.
(Règlement grand-ducal du 18 mars 2020 portant introduction d’une série de mesures dans le cadre de la lutte contre le COVID-19. Mémorial A 178 du 24 mars 2020 Shortime Work: Book v.- Employment and Unemployment -Title I - Prevention of dismissals and maintenance of employment, Chapter 1 - Measures to prevent cyclical redundancies (Livre V.- Emploi et Chomage, Titre Premier – Prévention des licenciements et maintien de l’emploi Chapitre Premier.- Mesures destinées à prévenir les licenciements conjoncturels)
In the event of a drop in activity, short-time working provides for the continued employment of employees through state subsidies by reducing the working time of some or all employees in a company. The measures can apply to all employees on a permanent or fixed-term contract, as well as for apprentices and interim workers. The aim of the measure is to avoid redundancies of employees for cyclical or structural reasons and in the event of force majeure preventing the normal pursuit of economic activities. In the context of the crisis, the government decided to speed up the procedure by means of an online application accessible via the website of the public employment service. The measure is limited to 1,022 hours per year per employee.
The application for short-time work must be communicated to the staff representatives and applies to employees on permanent or fixed-term contracts who do not receive any old-age or disability pension, are insured with the Joint Social Security Centre, apprentices, persons benefiting from an employment programme.
The employer pays each employee the salary due for every hour worked as well as a compensation to at least 80% of the salary that should be received for the inactive hours, but only up to a maximum of 250% of the social minimum wage. Employers also have to continue to pay social contributions and withholding tax on salaries paid for hours worked as well as for inactive hours, with the exception of accident insurance contributions and family benefits.
Based on an agreement within the National Conjuncture Committee, the government reached an agreement on the processing of partial unemployment statements for the months of July to December 2020. It is agreed that the employer receives a detailed statement for each month concerned, both for a possible outstanding balance and for the amount of a potential overpayment.
2,849 companies in September 2020 submitted a request for partial unemployment in the context of the special provisions which are in force until December 31, 2020 due to the COVID-19 crisis. The Conjuncture Committee gave green light to 2,825 requests, which amounts to 23,122 employees.
Employees in standard employment
Other groups of workers
|Does not apply to businesses||Does not apply to citizens|
Social partners jointly
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Role||Agreed (outcome) incl. social partner initiative||Agreed (outcome) incl. social partner initiative|
|Form||Consultation through tripartite or bipartite social dialogue bodies||Consultation through tripartite or bipartite social dialogue bodies|
Social partners' role in the implementation, monitoring and assessment phase:
The Ministers of Work, Employment and the Social and Solidarity Economy, the Minister of the Economy, the representatives of the trade unions OGBL and LCGB and the representatives of the employer organisation UEL agreed on the 10 of June 2020 on new measures in a common agreement regarding the short-time work employment linked to the COVID-19 crisis.
The measure is based on an agreement by the trade unions OGBL and LCGB in the context of the COVID-19 crisis and there is a large consensus of the importance of the measure. Within the National Conjuncture Committee, trade unions and employer associations discuss measures on a monthly basis regarding short-time work and companies with financial difficulties.
Eurofound (2020), Measures for short-time working in cases of force majeure related to the Coronavirus, measure LU-2020-12/303 (measures in Luxembourg), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/LU-2020-12_303.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.