A new law dated December 23rd 2016 on the organisation of the working hours (the “ New Law”) has been enacted which amends the Luxembourg Labour Code.

The objective of the law is, on the one hand, to ensure the good functioning of businesses and to boost employment and on the other hand, to protect the employees’ security, health and good working conditions.

The Law introduces the following changes:

Extension of the reference period

Any employer has the option to set up a work organisation plan (Plan d’Organisation du Travail - POT) which allows the employer to determine the weekly working schedule and weekly working hours subject to flexibility and to compute the hours of work over a reference time period based on the expected activity.

The average weekly working hours during the reference period is limited to 40 hours.

Prior to the entry into force of the New Law, the reference period was limited to one month unless otherwise agreed in a collective bargaining agreement, in which case the reference period could be extended up to 12 months.

The New Law has introduced the possibility for employers to apply a reference period under a POT of up to 4 months, subject to the following conditions:

  • the employer must inform and consult the staff delegation or failing this, all the employees concerned, of the contemplated extension of the reference period,
  • the employer must notify the Labour and Mines Inspectorate (ITM) of its decision to extend the reference period within one month from the date the decision becomes effective.

Supplementary paid leave entitlement

Employees subject to the extended reference period are granted supplementary paid leave, as follows:

  • 1.5 days of the supplementary leave for a reference period exceeding 1 month and up to 2 months;
  • 3 days of the supplementary leave for a reference period exceeding 2 months and up to 3 months;
  • 3.5 days of the supplementary leave for a reference period exceeding 3 months and up to 4 months.

A new maximum of working hours over which overtime is computed:

Overtime is performed (i) when the hours worked during the reference period exceed the average of 40 hours a week and/or (ii) when the hours worked exceed a certain threshold:

  • any hour exceeding 20% beyond the normal working hours (i.e. 48 hours a week or 192 hours a month) over a reference period of up to 1 month
  • any hour exceeding 12.5% beyond the normal working hours (i.e. 45 hours a week or 180 hours a month) over a reference period of over 1 month and less than 3 months
  • any hour exceeding 10% beyond the normal working hours (44 hours a week and 176 hours a month) over a reference period of exceeding 3 months and up to 4 months

Modification of the work organisation plan (POT) by the employer

The employer may amend the POT with 3 days’ notice. The employee concerned may request not to comply with the POT, as modified, for compelling and justified reasons, unless the modification is due to a specific case of force majeure.

If the employer complies with the 3 days’ notice period, the work performed beyond the initial schedule under the previous POT is not deemed to be overtime, so long as the modification does not cause the maximum working hours to be exceeded (taking into consideration the limits of 12,5% and 10% as described above).

If the employer does not comply with the 3 days’ notice period and if the modification does not result in an increase in the hours of work but in a change to the anticipated work schedule, any hours worked outside the anticipated work schedule is compensated at a rate of 1.0% for the first two hours worked and at the rate 1.2% for any hour worked beyond the first two working hours.

If the modification causes an increase in the hours of work, any hours worked outside the anticipated schedule is deemed overtime.