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-2020-31/2642 – measures in Luxembourg
|Country||Luxembourg , applies nationwide|
|Time period||Open ended, started on 28 July 2020|
|Context||Restructuring Support Instruments|
|Type||Legislations or other statutory regulations|
Reorientation of business activities
– Transfer or redeployment of workers
|Author||Patrick Thill (LISER) and Eurofound|
|Measure added||23 June 2022 (updated 14 November 2022)|
As defined in article L. 132-1 of the labour code, the ‘prêt temporaire de main d'oeuvre’ is limited to companies that are not temporary work agencies that, with prior authorisation from the Ministry of Labour and Employment on the advice of the Public Employment Agency (ADEM) may put on lease their employees with another employer for a limited period of time.
Implemented with the aim of preserving jobs, the "temporary loan of labour" is supposed to have positive effects on three levels:
The use of temporary sublease of employees means that, in practice, workers are sent by their initial and legal employer – the sending company – to work for a third party – the receiving company. It is framed within rather restrictive conditions:
The instrument is considered as a tool used in times of fluctuating economy, to respond to the common needs of two companies: one which temporarily lacks work and the other one which temporarily experiences a rise in demand and therefore needs more workforce. As such, the 'prêt temporaire de main d’oeuvre' permits the safeguarding of jobs: the worker who is temporarily no longer needed in their original company will provisionally move to another company which needs extra workforce, and once this fluctuating period is over, they are supposed to return to their original company. Resorting to this mechanism helps to avoid the need of dismissing and re-hiring employees over time and appears to be advantageous both for employees who do not have to experience unemployment and for companies which save the costs of dismissals and recruitment processes.
Regarding the duration of the sublease, due to its temporary nature, the request must state a limited period of time. However, this duration is very variable and can go from a few weeks to several months, depending on the reason why temporary sublease of employees was used.
In the event of temporary sublease, the employment contract between the employee and his company of origin is maintained without any loss of salary for the employee. There can be no discrimination: the remuneration paid by the sending company to its subleased employees cannot be below that paid to permanent employees with the same or equivalent professional qualifications in the receiving company (Art. L. 132-2).
Financial support can be granted exclusively under the implementation of a Job Retention Plan. As explained above, when subleasing an employee, the sending company has to pay the wage corresponding to the position filled in the receiving company. If this involves a salary increase, the Ministry finances through the Re-Employment Help a variable proportion of the wage which is the difference between the wage of the receiving company and 90% of the previous wage the employee perceived in the sending company. These public subsidies for wage maintenance can last a maximum of four years.
Employees in standard employment
||Applies to all businesses||Does not apply to citizens|
Public employment service
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
From the companies' point of view, the 'prêt temporaire de main d'oeuvre' prevents them from frequently going through dismissals and recruitment processes and hence saves costs (House of entrepreneurship, Chambre des Métiers, 2020). Likewise, companies manage to keep their qualified and trained workforce, even if they have to temporarily send them to another company. For receiving companies, the period during which the temporary sublease takes place can also be used as some sort of trial period, during which they can test the employee and decide to employ him directly after this period or not.
Eurofound (2022), Temporary sublease of employees, measure LU-2020-31/2642 (measures in Luxembourg), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/LU-2020-31_2642.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.