Under Luxembourg's employment law regime, a 'company practice' is a practice that:
- is habitually performed within a company; and
- takes the form of a benefit awarded to employees or a group of employees in addition to what they are entitled to by law or under a collective agreement or employment contract.
To be recognised as a company practice, the practice must be general, consistent and fixed. It may be an employer initiative or the result of an employer's tacit acceptance of the practice.
In a November 13 2015 ruling – which drew on a 2012 stand-alone Court of Appeal decision(1) – the Esch-sur-Alzette Employment Tribunal reiterated that to terminate a company practice, the employer cannot simply stop performing it.(2) Rather, the employer must explicitly terminate the practice by informing employees of the termination sufficiently in advance. In light of this, the tribunal found that "the sufficiency of the notice must be accepted by the judge. This means that the termination will take effect only at the end of a notice period, details of which must be included with the information about the termination given to the employees".
The tribunal then clarified that "this termination is binding on the employees, who cannot claim to see this as a change to their employment contract, as the benefits involved are not included in that contract". The tribunal concluded by saying that "when the termination comes into effect, no benefit acquired can continue".
In other words, to terminate a company practice, an employer must inform its employees of the termination and explain that it will take effect only after a reasonable period has passed.
For further information on this topic please contact Guy Castegnaro or Ariane Claverie at Castegnaro by telephone (+352 26 86 82 1) or email ([email protected] or [email protected]). The Castegnaro website can be accessed at www.castegnaro.lu.
(1) Court of Appeal, May 10 2012, 37069.
(2) Esch-sur-Alzette Employment Tribunal, November 13 2015, 2669/2015.