Termination of employment : Discover your rights and obligations as an employer or an employee working in Luxembourg.

1. Proceedings and consequences of
a dismissal or a resignation

2. Before we start, let me introduce myself first
Maître Amal JAOUID
Attorney at the Luxembourg
Bar association

3. One way in - unlimited ways out…
❖ Don’t forget that the
relationship with your
employer is an AGREEMENT
❖ Any contract-agreement can be
terminated by one or all parties
❖ The consequences of that
termination might have serious
consequences for the one or the
other party.

4. Legally acknowledged
terminations of an
employment contract
1) Contract expiry (CDD)
2) Automatic termination caused by an event
(death, bankruptcy, extended illness over 52 weeks)
3) Early termination (trial period)
4) Mutual agreement
5) Dismissal with notice period (economic or personal reasons)
6) Dismissal with immediate effect (due to gross misconduct)
7) Resignation with notice period
8) Resignation with immediate effect

5. Warmup questions
❖ Is the employer allowed to dismiss whoever and whenever he wants?
❖ Is an employee allowed to leave the company whenever he wants?
❖ Please develop and explain the consequences of your statement!

6. - before being a legal litigation it is first a personal issue, with emotional ups and downs and their consequences
- difficult situation for the dismissed employee who tries to find out the « why me-why now » reason
- the employer is free to choose whether or not he needs or wants an employee in his staff. Same thing for the employee, who is free
to choose to go, whatever his reasons might be
- don’t forget that an employment contract is a civil contract, freely negotiated by both parties. It doesn’t mean that the parties are
equal!
- the labour law rules (Labour Code, CBA, etc.) protects the employee in the situations where the employer might use unilaterally
his power in an unfair way. The non respect can lead to sanctions, that can only be ordered by a judge
- in other words: if you want justice and damages, you need to sue the employer, as he is the only one who can order a sentence
- the litigation outcome can be long and uncertain
In practice, terminations can be tough situations!
WHY?

7. Dismissal
❖ with notice period
❖ with immediate effect
❖ personal reasons
❖ economic reasons

8. * depends on the reason that is the origin of the employer’s decision
* the term used in Luxembourg is « faute » (= fault, negligence, misconduct or offence)
* this fault is appreciated and defined unilaterally by the employer first
* if the precision, the seriousness or the reality of the reasons mentioned are seen differently
by the employee, he will have to challenge them and sue the employer, in order to let a
judge assess if the reasons given by him are wrongful or unlawful (« licenciement abusif »)
Choice of the type of dismissal

9. The procedure of a dismissal with notice period
❖ The « normal » way
❖ Article L-124-1 & s. of the
Labour Code (Code du travail)
❖ not applicable for CDD’s
❖ difference between trial period
procedure and CDI-procedure

10. 1) < 150 employees: preliminary interview is not mandatory
2) 150+ employees: preliminary interview is notified per registered letter to the employee
- number of employees is calculated within the concept of « economic and social unit »
- right for being assisted by a colleague, a staff delegation representative or a Trade union representative having a national
union representation legal status (ALEBA has a legal status of union for the finance sector only —> not allowed).
- letter has to respect several contents: date, hour & place of the interview ; presence of a staff member or a member of the
employer organization (if not mentioned —> not allowed to be present) ; copy has to be sent to the staff delegation (SD)
or the ITM if there is not SD
- about the presence of a lawyer (2 theories)
- during the interview: employer has to indicate the reason of his decision, hears the employee out and listens to the
general comments of the assisting person
- after the interview: employer has to decide if and how he wants to dismiss the interviewed employee.
- the decision is expressed in a formal dismissal letter, notified to the employee by registered letter
- deadline: no earlier than the day after the interview and at the latest eight days after.
N.B.: if this part of the procedure is not respected: damage equivalent to 1 month salary can be requested at the court
Preliminary interview

11. ❖ letter of the dismissal is notified (= sent per registered letter) to the employee
❖ date of dispatch and date of receipt : 2 important concepts !
❖ a dismissal always starts either the 1st or the 15th of a month
❖ length of the notice period depends on the length of service
❖ this length of the notice period can be longer (ex.: Collective bargaining agreement or in the employment
contract itself)
❖ the reasons are generally not mentioned
❖ employer is free to choose to release the employee from his work or not ; if he chooses to do so, he has to
mention it in writing.
❖ Possibility to grant a partial release.
❖ usually mentions how the relationship will continue until the end (equipment of the employer and how it has
to be remitted, belongings of the employee, complementary obligations, agreement related to the contract
(leasing car, insurances, etc.)
❖ If this procedure is not respected: damage equivalent to 1 month salary, if recognized as wrongful by a judge
(not cumulative)
❖ the concept of « chômeur involontaire » and the consequences
Formal letter

12. ❖ has 1 month within the date of notification to ask the
reasons for the dismissal to the employer
❖ the request for the reasons has to be notified per
registered letter
❖ inversion regarding the burden of proof (goes back to
the employer)
❖ can already start to find a new job
Now comes the employee’s move !

13. ❖ 1 month to reply
❖ employer must state with detail
❖ reasons have to be :
❖ 1) precise
❖ 2) real/genuine
❖ 3) serious
❖ if he fails to fulfill those conditions or if he doesn’t answer
within the legal deadline, the dismissal is deemed to be
abusive (=unlawful, wrongful)
The employer’s duty

14. ❖ law gives the employee 3 months to:
❖ assess if the reasons given by the employer are justified or not
❖ seek for legal assistance (if he has not done it yet)
❖ introduce a legal sue in front of the court
❖ extension of the 3 months’ deadline, if:
❖ the employee sends a contestation letter per registered mail
❖ interrupts the 3 months’ deadline and starts a new deadline
of 1 year
The employee’s call

15. ❖ period in which both parties can assess if they want to
pursue the working relationship
❖ limited to minimum 2 weeks and maximum 12 months
❖ the termination during the trial period has not the same
procedure as the other terminations.
❖ no reason for this termination is required
Special situation: the trial period

16. The procedure of a dismissal without notice period
❖ The « unusual » way
❖ Article L-124-10 & s. of the
Labour Code (Code du travail)

17. 1) < 150 employees: preliminary interview is not mandatory
2) 150+ employees: preliminary interview is notified per registered letter to the employee
- number of employees is calculated within the concept of « economic and social unit »
- right for being assisted by a colleague, a staff delegation representative or a Trade union representative having a national
union representation legal status (ALEBA has a legal status of union for the finance sector only —> not allowed).
- letter has to respect several contents: date, hour & place of the interview ; presence of a staff member or a member of the
employer organization (if not mentioned —> not allowed to be present) ; copy has to be sent to the staff delegation (SD)
or the ITM if there is not SD
- about the presence of a lawyer (2 theories)
- during the interview: employer has to indicate the reason of his decision, hears the employee out and listens to the
general comments of the assisting person
- after the interview: employer has to decide if and how he wants to dismiss the interviewed employee.
- the decision is expressed in a formal dismissal letter, notified to the employee by registered letter
- deadline: no earlier than the day after the interview and at the latest eight days after.
N.B.: if this part of the procedure is not respected: damage equivalent to 1 month salary can be requested at the court
Preliminary interview

18. ❖ letter of the dismissal is notified (= sent per registered letter) to the
employee
❖ dismissal starts with immediate effect
❖ the reasons are explicitly detailed in the letter
❖ the given gross misconduct cannot be older than 1 month
❖ gross misconduct (= any conduct/fault that immediately and
unequivocally makes it impossible to continue the working
relationship
❖ also applicable for CDD’s
❖ not considered as « chômeur involontaire »
Formal letter

19. ❖ law gives the employee 3 months to:
❖ assess if the reasons given by the employer are justified or not
❖ seek for legal assistance (if he has not done it yet)
❖ introduce a legal sue in front of the court
❖ extension of the 3 months’ deadline, if:
❖ the employee sends a contestation letter per registered mail
❖ interrupts the 3 months’ deadline and starts a new deadline
of 1 year
The employee’s call

20. The procedure of a resignation with notice period
❖ Article L-124-4 of the Labour
Code (Code du travail)

21. ❖ letter of the resignation is notified (= sent per registered
letter) to the employee
❖ resignation starts with notice period, which is the half of
the notice period of a dismissal with notice period
❖ not legally mandatory to give the reason
❖ not considered as « chômeur involontaire »
Formal letter

22. The procedure of a resignation without notice period
❖ Article L-124-10 of the Labour
Code (Code du travail)

23. ❖ letter of the dismissal is notified (= sent per registered letter) to the
employee
❖ dismissal starts with immediate effect
❖ giving the reasons is the letter is not mandatory (but has to exist)
❖ the given gross misconduct cannot be older than 1 month
❖ gross misconduct (= any conduct/fault that immediately and
unequivocally makes it impossible to continue the working
relationship
❖ also applicable for CDD’s
❖ not considered as « chômeur involontaire »
Formal letter

24. Special situations
❖ if you are on maternity leave
❖ if you are on parental leave
❖ if you are on sickness leave
❖ if you are a staff representative
❖ if there are several dismissals for economic reasons
❖ if the employer unilaterally decides to amend your contract
❖ if there is a transfer of activity defined at article L.127-1 CT

25. Legal indemnities and severance payments
❖ legal indemnities
❖ severance payment
❖ increased notice pay
❖ redundancy indemnity
❖ extended notice period
❖ outplacement indemnity
❖ other allowances

26. What about the settlement agreement?
❖ A settlement agreement is a confidential contract where both parties express the
intention to put an end to a litigation.
❖ Article 2044 of the Civil code
❖ Both parties define their convenient consideration/counterparty.
❖ When agreed and signed, it doesn’t allow the parties to go to the court, unless the
settlement agreement has not been respected, which makes it either meaningless
or partially unfulfilled.
❖ Possible monetary considerations that can be negotiated in favor of the employee
(legal indemnities, severance payment, extended notice period, outplacement &
training indemnities, child indemnity, non working spouse indemnity, etc.)
❖ Discussions and negotiations for a settlement agreement are possible at any time,
even during (and in some rare cases after) the trial.

27. Lorem Ipsum Dolor
Practical assessment
regarding the consequences
Rights
vs
Interests

28. -Abraham Lincoln
« Labour is prior to, and independent of, capital.
Capital is only the fruit of labour, and could never
have existed if labour had not first existed. Labour
is the superior of the capital and deserves the
much higher consideration »

29. THANK YOU FOR YOUR TIME !