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04 Jul 2016

Labour Code amendments - Draft law n°6989

Since in some of the newer EU Member States wage levels and social protection are considerably lower than in other Member States, a review of directive 94/71 EC of December 16th 1996 concerning the posting of workers in the framework of the provision of services was necessary. Thus, a new directive, directive 2014/67/EU of the European Parliament and of the Council of May 15th 2015, on the enforcement of the directive (hereinafter the “Directive”) has been adopted.

The Draft law will ensure decent working conditions for posted workers, an effective social protection system, and with the purpose of fighting against social dumping.

Draft law n°6989, aiming at transposing the Directive into national law (hereinafter the “Draft law”) and amending the Labour Code and the law of June 17th 1994 determining the measures to maintain employment, price stability and business competitiveness, will result in ensuring decent working conditions for posted workers, an effective social protection system, and with the purpose of fighting against social dumping.

The key points of the Draft law are the following:

Responsibility of the undertakings in the case of subcontracting

The Draft law sets up a joint and several liability mechanism for every undertaking involved in the process of posting (i.e. temporarily posting workers to carry out work in order to provide services in another Member State), no matter whether they are the undertaking making the posting or the user undertaking, in the case where the posted employee will not receive his/her due remuneration from the undertaking making the posting. The user undertaking must inform the Labour and Mines Inspectorate (Inspection du travail et des mines, hereinafter “ITM”) immediately after having found out that the posted employee is not paid by the undertaking making the posting.
Moreover, the user undertaking must send the undertaking making the posting an injunction to stop the non-payment. If the user undertaking fails to do so, it will be held liable together with the undertaking making the posting, and may be punished with an administrative fine.

Update of the list of documents to be produced by the posting undertaking

The Draft law aims to expand the list of documents to be produced by the posting undertakings to enable an effective control allowing the posted workers to be paid in relation to the actual worked hours.

Strengthening of the administrative cooperation

At national level, the administrative cooperation for the implementation of the provisions concerning the posting of workers will be strengthened by combining the Directorate of Immigration (Direction de l’immigration), the Department of Public Works (Département des travaux publics), the Road Administration (Administration des ponts et chaussées) and the Public Works Administration (Administration des bâtiments publics) with the missions assigned primarily to the ITM.

Introduction of effective redress mechanisms allowing posted workers to complain or to engage in judicial proceedings

Effective legal actions are introduced by the Draft law to enable the posted workers to complain or to sue directly in the case of non-compliance with the provisions about the posting of workers.
For example in the case where the concerned posted worker has already left the territory of the Grand-Duchy of Luxembourg, he/she may consent that a trade union asserts his/her rights before the court.

Introduction of administrative sanctions and cross-border enforcement of the sanctions

The Draft law provides an effective and proportionate system of sanctions in the case of infringements of the provisions about the posting of workers, with fines going from EUR 2,500 to a maximum of EUR 50,000, and introduces a new chapter to the Labour Code governing the cross-border recognition and enforcement of such sanctions.