Latest updates

Draft law amends right to leave for family reasons and clarifies reclassification provisions
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 20 November 2019

A bill amending articles of the Labour Code relating to family leave and professional reclassification was recently tabled in the Chamber of Deputies. The bill intends to provide an exception to the rule that employees with a dependant child of a certain age are entitled to family leave in case of the child's illness only if the child is hospitalised. It also provides details on occupational reclassification.

District court examines aspects relating to loan guarantees
Luther SA
  • Litigation
  • Luxembourg
  • 29 October 2019

The Luxembourg District Court recently ruled on the equivalence of suretyships and autonomous guarantees. Although the court interpreted agreements using the traditional rules, this decision illustrates its pragmatic approach of analysing commitments to qualify guarantees.

Liquidator held liable for omitting claims arising from ongoing litigation
Luther SA
  • Litigation
  • Luxembourg
  • 15 October 2019

In a 2018 decision, the Luxembourg District Court found a liquidator liable for damages which the plaintiffs had suffered as a result of the early closure of the liquidation while legal proceedings were still ongoing. The court held that since the liquidator had personally received the document instituting the proceedings, he should not have ignored any claims that might have arisen from the ongoing dispute. Notably, the court went even further by also holding the liquidation auditor liable.

Court recognises employees' right to disconnect when on leave
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 09 October 2019

As new information and communication technologies continue to be developed, employees are increasingly connected to their business phones or computers outside their working hours. As such, the line between employees' private and professional lives has become blurred. Within this context, the Luxembourg courts recently recognised, for the first time, the existence of employees' right to disconnect.

Professional training reform
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 02 October 2019

A new law has incorporated the Modified Law of 19 December 2008's provisions on apprenticeship and internship contracts into the Labour Code and introduced certain clarifications and modifications. Among other things, the new law provides that apprenticeship contracts must provide for a non-renewable three-month trial period. In addition, apprentices can now benefit from settling-in and training leave in certain circumstances.

Minimum social wage increased
Castegnaro
  • Employment & Benefits
  • Luxembourg
  • 14 August 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 €256.60 (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.

Directors' liability in event of non-compliance with company tax obligations: case law reversal
Luther SA
  • Litigation
  • Luxembourg
  • 30 July 2019

Under the General Tax Law, directors are held personally liable for the fulfilment of their company's tax obligations. Prior to a case law reversal, the Administrative Court took a strict approach towards directors and systematically held that they had breached their duties by failing to withhold, declare or pay company taxes. However, in 2017 the Administrative Court of Appeal held that the wrongful character of alleged tax breaches must be demonstrated by law and factually proved by the Tax Administration.

Luxembourg life insurance – a European adventure
NautaDutilh Avocats Luxembourg S.à r.l.
  • Insurance
  • Luxembourg
  • 23 July 2019

With more than 93% of premiums collected outside the Grand Duchy, Luxembourg life insurance has undeniably contributed to the dynamism of the European passport with regard to both freedom of services and freedom of establishment. Luxembourg life insurance is mainly a passported activity and thus marked by cross-border issues shaped by local developments that require constant monitoring, particularly when it comes to one of the sector's leading products: life insurance linked to investment funds.

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.

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.

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.

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.