Latest updates

GDPR: one year on
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 17 July 2019

Luxembourg implemented the EU General Data Protection Regulation through the Law on the Organisation of Luxembourg's National Commission for Data Protection and the General System for Protecting Data. The law made a number of changes to the Labour Code, including extending the circumstances in which employers can process personal data to monitor their employees. Further, employers no longer have to obtain prior authorisation to monitor employees.

Can employees who fail to complete their trial period claim bonuses?
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 03 July 2019

In addition to an employee's basic monthly remuneration, employment contracts often provide for the payment of various bonuses or gratuities, the specifics of which can be freely agreed by the parties to the employment relationship. In a recent dispute between a chief operating officer and her former employer, the Court of Appeal considered whether the annual bonus provided for in the employee's contract was owed to her since she had failed to complete her trial period.

Changes to co-financing of vocational training
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 05 June 2019

The Law of 29 August 2017 reformed the system under which the government co-finances employee vocational training in order to encourage employers to invest in developing their employees' skills while reducing the inequalities in the amount of aid provided to large and small companies. However, a number of matters remained unclear. As such, a recent Grand Ducal regulation has provided useful clarification, particularly with regard to the content and practical details of co-financing requests.

New law increases statutory leave entitlement and introduces additional public holiday
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 22 May 2019

A new law modifying the Labour Code and the Modified Law establishing the General Status of Civil Servants recently came into effect. The law has increased the minimum statutory paid leave entitlement from 25 to 26 days a year. It has also declared Europe Day, celebrated annually on 9 May, a statutory public holiday.

Court of Appeal specifies consequences of rescinding contracts
Luther SA
  • Litigation
  • Luxembourg
  • 21 May 2019

The buyer of an apartment signed a long-term lease and agreed to live in the apartment for at least 12 years. However, in contravention of this commitment, the buyer moved out and rented the property to a tenant. The seller sued the buyer, seeking to have the contract rescinded. In its decision, the Court of Appeal ruled that the contract had been divided into a contract of sale and a lease contract, and that the retroactive rescission principle would have a different effect on each of these.

PSD2 implementation in the Grand Duchy – six months later
NautaDutilh Avocats Luxembourg S.à r.l.
  • Banking
  • Luxembourg
  • 10 May 2019

In recent months, the Luxembourg Financial Supervisory Authority (CSSF) has been active and the industry is preparing for the open banking wave. The changes in response to the EU Payment Services Directive aim for a generally positive evolution of the payment scene in Luxembourg. The CSSF has published the fallback exemption request form and adopted several circulars that are applicable to payment service providers.

Dismissal during illness: when are employees protected?
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 01 May 2019

Employees who cannot work due to illness are, in principle, protected against dismissal. The Court of Appeal recently reiterated the conditions which must be met for this protection to apply and, failing this, the circumstances in which an employee's absence may justify dismissal for serious misconduct. Notably, the unique nature of the case and the fact that the employee had worked for the company for nine years did not affect the court's decision.

Who's liable for damage caused by employees?
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 24 April 2019

The Labour Code establishes a dual responsibility in employment relationships – namely, employers are liable for risks generated by their company's activity and employees are liable for damage caused by their wilful acts or gross negligence. In principle, for the courts to hold an employee responsible for wilful misconduct or gross negligence, the employer must prove not only the damage incurred, but also that this is attributable to the employee's wilful act or gross negligence, as interpreted by the courts.

Court of Appeal rules on enforcement of pledge versus insolvency proceedings and fraud
Luther SA
  • Litigation
  • Luxembourg
  • 16 April 2019

A Court of Appeal decision appears to have definitively removed any possibility of effectively challenging a transfer of ownership of pledged assets in an enforcement scenario on the basis of fraud, including manifest fraud by the pledgee. This is in contrast to a 2013 Luxembourg District Court decision and the general practice to date, which has been to consider the facts on a case-by-case basis.

Luxembourg District Court defines conditions of minority abuse at shareholders' meetings
Luther SA
  • Litigation
  • Luxembourg
  • 09 April 2019

In a notable decision, the Commercial Section of the Luxembourg District Court clearly defined – for the first time – the concept of minority abuse at shareholders' meetings under Luxembourg law. Further, the court detailed the conditions which must be met in order for conduct to qualify as minority abuse. This decision is of particular interest, as the alternative conditions for determining whether minority abuse has taken place are much broader than those initially set out in Luxembourg law.

Third-country (re)insurance operations in Luxembourg post-Brexit
NautaDutilh Avocats Luxembourg S.à r.l.
  • Insurance
  • Luxembourg
  • 09 April 2019

The United Kingdom's planned exit from the European Union would result in it losing the fundamental freedoms guaranteed by the Treaty on the Functioning of the European Union and its qualification as an EEA third country. As such, it is timely to examine the regulatory framework governing the Luxembourg activities of (re)insurers registered outside the European Economic Area.

Notable Labour Court of Appeal decisions in 2018
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 13 March 2019

The Labour Court of Appeal issued a number of notable decisions in 2018. For example, it held that the high level of freedom enjoyed by a senior manager with regard to the organisation of their work must be exercised within the limits of their relationship of subordination with their employer. Further, it held that the burden of proof of overtime falls on the employee who requests payment, and that the release of an employee from their duties during their notice period cannot lead to a reduction in their remuneration.

Court of Appeal rules on testimony of executive board members
Luther SA
  • Litigation
  • Luxembourg
  • 12 March 2019

In a dispute between a public limited liability company and one of its employees, the Court of Appeal issued a decision concerning the testimony of executive board members of a party to a dispute. The court's decision contradicts case law that seemed to have overcome this problem with regard to public limited liability companies. Hence, the courts remain divided as to whether the testimony of a director who individually has no power to represent their legal entity will be taken into consideration.

Status of British citizens living in Luxembourg post-Brexit
Castegnaro
  • Immigration
  • Luxembourg
  • 22 February 2019

The Council of Government recently came to an agreement on the status of British citizens living in Luxembourg in the event that the United Kingdom leaves the European Union on 29 March 2019 without a withdrawal agreement. According to the statement, answers to questions concerning the situation of British nationals living in Luxembourg, as well as Luxembourg nationals living in the United Kingdom, are available online.

Changes to minimum social wage
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 23 January 2019

Following recent amendments to Article L 222-9 of the Labour Code, the monthly minimum social wage for a non-qualified employee paid per month has been fixed – as of 1 January 2019 – at €254.31 (with the index value of 100 weighted for the cost of living as of 1 January 1948). Thus, as of 1 January 2019 the new gross amounts of the monthly minimum social wage and the applicable legal thresholds and ceilings have been amended.

Minimum social wage rates set to increase
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 12 December 2018

Bill 7381 modifying Article L 222-9 of the Labour Code was recently submitted to the Chamber of Deputies. The bill aims to amend the minimum social wage rates to reflect the average salaries of 2016 and 2017. If the bill is passed, the minimum social wage would increase by 1.1% as of 1 January 2019. The Governing Council has also decided to increase the social inclusion income and the income for those with severe disabilities by the same amount.

PSD 2 implementation in the Grand Duchy
NautaDutilh Avocats Luxembourg S.à r.l.
  • Banking
  • Luxembourg
  • 23 November 2018

By way of the Law of 20 July 2018, Luxembourg has finally implemented the EU Payment Services Directive (PSD 2). As the PSD 2 is a full harmonisation directive, most of Luxembourg's PSD 2 provisions are identical to the legal framework implemented across the European Union. Nonetheless, EU member states were given scope to decide on certain topics and the Grand Duchy seized the opportunity to define its own rules.

Can employers access their employees' emails?
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 07 November 2018

The Court of Appeal recently considered the conditions under which employers can access their employees' workplace correspondence and use such correspondence as evidence in court. This judgment confirms the current jurisprudential trend under which employers may occasionally access their employees' computers, including their work emails. Further, any document which concerns only professional data will, in principle, constitute a lawful means of proof.

Court of Appeal rules on interpretation of court decisions
Luther SA
  • Litigation
  • Luxembourg
  • 16 October 2018

The plaintiff in a recent Court of Appeal case concerning the enforcement of a pledge on shares given to a bank as part of a financing believed that the court's original decision was unclear. It consequently asked the court to clarify whether the decision ordering the return of the shares entailed that the plaintiff should be considered a shareholder from the date on which the bank had unlawfully acquired the shares or effectively returned them to the plaintiff.

New law introduced to implement GDPR
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 10 October 2018

The new Law on the Organisation of Luxembourg's National Commission for Data Protection and the General System for Protecting Data has, among other things, modified the Labour Code. The key changes introduced in this regard concern the processing of personal data in order to monitor employees, notifying employees of personal data processing, requesting advance compliance opinions and the co-decision system.