The law of 3 March 2026 amending Book V, Title I, Chapter III of the Labour Code (the "Law") was published in the Official Journal of the Grand Duchy of Luxembourg on 6 March 2026, entering into force on 10 March 2026.
Background and Objectives
Where the social partners anticipate economic or financial difficulties within an undertaking that are likely to have a negative impact on employment, they have the option, pursuant to Articles L.513-1 et seq. of the Labour Code, to enter into discussions with a view to establishing a job retention plan ("JRP"). The purpose of this instrument is to carry out anticipatory management of the effects of planned restructurings, while aiming to maintain employment, avoid redundancies or a social plan, and organise professional transitions without a period of unemployment.
The Law forms part of this job retention policy and aims to strengthen the preventive nature of measures designed to avoid redundancies and social plans.
Strengthening of JRP Monitoring by the Economic Committee (new Art. L. 513-3, §5bis of the Labour Code)
Upon written request from the Economic Committee, the social partners who have signed a JRP are now required to provide it with all requested information relating to:
- the measures effectively implemented;
- the number of persons affected by each of these measures;
- the own resources invested in the implementation; and
- the use of financial aid or subsidies received.
This information must be transmitted to the secretariat of the Economic Committee within one month of receipt of the request.
In the event of deliberately false information being communicated or a refusal to transmit the requested information, the Minister responsible for Employment, acting on the opinion of the Economic Committee, shall withdraw the approval of the relevant JRP.
It should be recalled that, as matters currently stand, undertakings are only required to "enter into discussions with a view to establishing a job retention plan" once the Economic Committee records five economic redundancies within a reference period of three months or eight economic redundancies within a reference period of six months.
Co-financing by the Employment Fund of Training Under a JRP (new Arts. L. 513-5 to L. 513-7 of the Labour Code)
The Law creates a legal basis for the co-financing, by the Employment Fund, of training provided under a JRP. The introduction of these provisions aims to put an end to legal uncertainty by creating a legal basis for conditions and arrangements already applied in practice.
Co-financing Rates
The Employment Fund co-finances the actual costs of training provided under a JRP at a rate of 50% where the training is aimed at a new internal position with the same employer, and at a rate of 100% where it is aimed at a new external position with another employer.
Eligible Costs
Eligible actual costs include:
- participants' registration fees;
- the salary costs of internal trainers;
- the cost of teaching materials used by the employee; and
- the cost of renting premises leased for internal training.
The following are entirely excluded from co-financing:
- training exceeding 480 hours;
- training already covered under a training plan (Art. L. 542-9);
- training falling under language leave (Art. L. 234-72);
- training covered by the Minister for Vocational Training in the context of continuing vocational training; and
- training the cost of which exceeds EUR 20,000.
Eligible Training Providers
Training eligible for co-financing includes, in particular, training provided in Luxembourg or abroad by recognised public or private schools; professional chambers; municipalities; foundations and private associations individually approved by the Minister for Vocational Training; and ministries, public administrations and public establishments.
Allocation of Costs in the Event of Interruption of Training
The actual costs of the training shall be borne by the employee only in the event of dismissal for gross misconduct attributable to the employee. In the event of economic redundancy before the end of the training, the actual costs shall remain borne by the employer.
Co-financing Procedure
The co-financing must be requested by the employer from the Minister responsible for Employment, on pain of forfeiture, before the effective start of the training.
The employer shall then submit a reimbursement request by registered letter to the Minister responsible for Employment, on pain of forfeiture, within forty days from the last day of the training. Failing this, the actual costs of the training shall be borne by the employer.
Practical Recommendations
Employers party to a JRP must henceforth be prepared to respond to information requests from the Economic Committee within the prescribed one-month period, failing which the approval may be withdrawn in the event of a refusal or deliberately false communication.
Employers contemplating training under a JRP must imperatively submit their co-financing application before the effective start of the training, and request reimbursement within 40 days following the end of the training. These time limits are forfeiture deadlines.
Our Employment, Compensations & Benefits department remains at your disposal for any questions relating to the implementation of this new legal framework or the structuring of job retention plans.
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