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Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case LU-2021-1/1662 Updated – measures in Luxembourg

New dispositions on partial unemployment

Nouvelles dispositions sur le chômage partiel

Country Luxembourg , applies nationwide
Time period Temporary, 01 January 2021 – 30 June 2021
Type Tripartite agreements
Category Employment protection and retention
– Income support for people in employment (e.g. short-time work)
Author Adrien Thomas (LISER)
Case created 06 January 2021 (updated 21 July 2021)
Related ERM support instrument

Background information

Given the need to limit social and economic activities due to the continued spread of COVID-19, the Conjuncture Committee, bringing together the Minister of Employment and the Minister of Economy, trade unions and employer organizations, decided on 19 November 2020 a number of changes to the partial unemployment regime.

Content of measure

The terms of application of partial unemployment for the first six months of 2021 are defined in two distinct periods of 3 months on the assumption that the health situation improves by 1 April 2021. As concerns the rules applicable between 1 January 2021 and 31 March 2021, there are four different cases:

  • Industrial companies will continue to benefit from the cyclical partial unemployment scheme in order to be able to react to disruptions in international markets. By applying the short-time working period, industrial companies commit to not laying employees off for economic reasons;
  • Companies in the vulnerable hospitality, tourism and events sectors will benefit from an accelerated access to structural partial unemployment, without limits as to the number of entitled employees. In case of proven need, these companies will be allowed to lay off up to 25% of their employees;
  • Companies affected by the health crisis, other than industrial companies and those in vulnerable sectors, may also have recourse to partial unemployment from a structural source by the accelerated route, provided, however, that they do not lay off employees.
  • Finally, if companies benefitting from partial unemployment want to lay off more than 25% of their workforce, they can only do so on condition that they provide a recovery plan in case of small companies with fewer than 15 people or a job retention plan in case of companies employing more than 15 employees.

Updates

The following updates to this measure have been made after it came into effect.

22 June 2021

The granting of partial unemployment under the so-called "structural, simplified partial unemployment" conditions introduced in March 2020 with the aim of helping companies to maintain employment during the COVID-19 health has not been extended. The amended Act of 17 July 2020 introducing a series of measures to combat the COVID-19 pandemic aiming at a facilitated access to partial unemployment will end on 30 June 2021.

23 February 2021

At its meeting on 23 February 2021, the "Comité de conjoncture" confirmed the provisions on short-time working, as agreed by the social partners in November 2020 and applicable since then.

These provisions are extended for the period from 1 April to 30 June 2021.

Use of measure

Figures to remember:- More than 150,000 people were affected by short-time work;- Nearly 1,300 companies have not paid back short-time work;- More than 3,000 claims paid in December 2020, more than 800 are still pending;- 4,450 companies in February 2021 (compared to 4,393 in January 2021) have applied for short-time work in order to benefit for the month of March 2021, from the special short-time work provisions that are in effect until 30 June 2021.

Between July 2020 and June 2021 49,300 companies introduced applications for partial unemployment and 47,296 applications have been granted by the "Comité de conjoncture".

Contents

  • Employment retention

Target groups

Workers Businesses Citizens
Employees in standard employment
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Trade unions
Employers' organisations
Company / Companies
National funds

Social partners

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:

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level

Involvement

According to the press statement by the Ministry of Employment and the Ministry of Economy, social partners adopted in "a broad consensus" the adopted new measures on partial employment, which were adopted in the tripartite Conjoncture Comitee.

Views and reactions

Social partners are supportive of the adopted measures. Representatives of the umbrella employers' organization Union of Luxembourg Enterprises (UEL, Union des Entreprises Luxembourgeoises) have, however, suggested that partial unemployment should be extended over time and made more accessible to all sectors, without raising barriers to small businesses.

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Sources

Citation

Eurofound (2021), New dispositions on partial unemployment , case LU-2021-1/1662 (measures in Luxembourg), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.