CONDITIONS, COMPULSORY INFORMATION AND CASE EXAMPLES OF A PERMANENT CONTRACT IN LUXEMBOURG (CDI)
The conclusion of a permanent contract permits the occupancy of a position for a constant and indispensable period of time for the company. Luxembourg is the country for permanent contracts - 92% of employment contracts concluded in the Grand Duchy are permanent ones.
THE CONDITIONS OF THE CDI IN LUXEMBOURG
Whether it is for a CDD (fixed-term contract) or a CDI (permanent contract), an employer who wishes to hire an employee is required to conclude a written employment contract either before their arrival or at the latest when the employee starts work. If the employment contract is signed after these periods, then the contract will mandatorily be a permanent contract and will not be eligible for a trial period.
The employment contract must be drawn up in writing and in duplicate originals, one of which must be kept by the employer and the other by the employee. The CDI must of course be signed by both the employer and the employee and marks the relationship binding them.
What differentiates the CDI from the CDD is the expiry date, since by definition a CDI has an indefinite duration and so no expiry date is mentioned in the contract.
THE COMPULSORY INFORMATION OF A PERMANENT CONTRACT
An permanent contract must contain certain information (some of which is compulsory) such as the name of the employee and employer, the place of work, the function and job description, etc.
In addition, for the employment contract to be considered as such, the following three criteria must be met: performance of work, remuneration and subordination.
In the case of a part-time employment contract: it is compulsory for the employment contract to state how the working time is to be allocated among the days of the week and the number of hours worked per week.
It is compulsory to mention the daily or weekly working time and its terms and conditions for extra hours and how these are paid.
The employer also must indicate to the employee its default working time.
The employer should mention in the permanent contract indexed monthly rate completed (gross salary further bonuses, extra month’s bonus, etc.).
At least, within a permanent contract, duration of leave, termination conditions and reminder of suitable collective bargaining agreement(s), Social Security office (used for social benefits charges, social care), training program, must be mentioned.
Special clauses may be added to the employment contract, such as a a non-competition clause, an intellectual property clause or a training indemnity clause.
These clauses are limited and are applied in accordance with the case law in force. They must therefore strictly comply with the Luxembourg Labour Code.
EXAMPLES OF SPECIAL CASES OF A PERMANENT CONTRACT
Some special cases may arise when signing or discussing the terms of the employment contract between the employer and the employee. Here we present some situations which require knowledge of the Luxembourg labour code in order to deal with them.
When a permanent contract is terminated: if the employer or the employee decides not to sign the employment contract despite the request of one of the parties, then the contract may be terminated without notice or compensation. However, such termination must arise at the earliest on the 3rd day following the request to sign the contract and at the latest within 30 days following the employee's entry into service [1].
If the employment contract is signed by both parties and the employment contract is terminated before the commencement of work, this opens up rights to compensation in lieu of notice if the employment contract does not include a trial period. If the contract stipulates a trial period, the compensation is not due and the parties will have to respect the notice period [2].
[1] Article L.121-4 of the Labour Code (Source www.itm.lu)
[2] Article L.121-5 of the Labour Code
