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Workforce Flexibility and Government Incentives in times of Covid-19 - Luxembourg

Short-Term Work State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

Yes

If YES on question 1, please describe which type of regulation. Please confirm if and to what extent such leave can be supported by state aid and/or other extra-ordinary governmental support.

In the context of the Covid-19, several regulations provide an employer with possibility for flexible workforce planning.

Teleworking: The Luxembourg government asked companies to foster the teleworking when possible.

Partial unemployment scheme allows employers, in certain circumstances such as this pandemic, to close down all or part of the business concerned and to receive a state fund to maintain the salaries

Leave for family reasons: an employee can request a leave for family reason if he/she must stay at home to take care of one or several children under 13 years and has no other solution (no option for teleworking, etc..). This specific leave cannot be used by both parents simultaneously. This leave can be full time or part-time (for example 3 days a week) and will be fully compensated by the Social Security Scheme.

Partial unemployment scheme: all companies must apply through a dedicated e-platform available on the Unemployment Authorities website (“ADEM”). However, some companies (closed due to the lockdown) will be automatically eligible whereas companies only facing a business decrease will be eligible, subject to a decision to be taken by the Government (“Comité de conjuncture”).The application process requires legal information about the company and detailed figures regarding business, breakdown of staff, etc.The application is valid for one month and must be renewed each month by the company.

if YES on question 1, please describe which contacts that may need to be initiated with trade unions and/or works councils. Must a special process be followed?

Partial unemployment scheme: The implementation of a partial unemployment scheme requires a prior consent of the Staff Delegation (signature of the President of the Staff delegation is required on the application). Unions must be involved if the company is subject to a collective bargaining agreement.

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

Yes, as mentioned above, there is the partial unemployment scheme, the recourse has been facilitated by the government. The government introduced an automatic access for companies obliged to close down due to the isolation obligation (shops, etc..). In this case, the state support will be paid directly and the controls will be held ex post. Other companies suffering from a significant slowdown need to apply and fullfil a detailed form. in this case, each application is subjetc to the approval of the government.

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

The partial unemployment scheme benefits to companies facing serious difficulties. In the application, the company must explain the measures already taken to maintain the employment level (training sessions, teleworkoing, etc…) and the business (research for new clients or suppliers, developements of new products, investments or restructuration plan, etc..). In counterpar of the state aid, the employer must undertake to not dismiss any employees for economic reasons during the partial unemployment scheme.

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

Partial unemployment scheme: all companies must apply through a dedicated e-platform available on the Unemployment Authorities website (“ADEM”). However, some companies (closed due to the lockdown) will be automatically eligible whereas companies only facing a business decrease will be eligible, subject to a decision to be taken by the Government (“Comité de conjuncture”).The application process requires legal information about the company and detailed figures regarding business, breakdown of staff, etc.The application is valid for one month and must be renewed each month by the company.

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 02 April 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.