LUXEMBOURG Law and Practice Contributed by: Romain Tiffon and Marie Bentley, ATOZ Tax Advisers
Collective Bargaining Agreements Employment relationships are also shaped by collec - tive bargaining agreements, which: • reflect the practices of specific economic or indus - trial sectors; and • may supplement or refine the statutory framework. This means that, depending on the sector, employees’ rights and working conditions may be influenced by collectively negotiated rules. Individual Employment Contracts At the individual level, the relationship between employer and employee is governed by an employ - ment contract, which must: • be provided to the employee at the latest on the first day of employment; and • set out the key terms and conditions of employ - ment (such as remuneration, working time and duties). Where applicable, the contract may incorporate provi - sions from collective agreements. Role of Practice and Additional Instruments Rules and practices may reflect sectoral customs, especially through collective agreements and estab - lished practices within industries. 4.2 Characteristics of Employment Contracts Under Luxembourg law, an employment contract must be provided to the employee in writing. Employers are required to provide the contract no later than the first day of employment. The contract must set out the essential terms and conditions of employment, including: • identity of the parties; • starting date; • job title; • place of work; • wages; • working time; • holiday entitlement; and • notice provisions.
personal liability for part or all of the company’s debts or order a disqualification from acting as a director. These liability regimes are closely linked to the funda - mental duties incumbent upon directors. In particular, directors must: • act with due care and diligence; • behave loyally in the best interests of the company; and • ensure compliance with applicable laws and the company’s constitutional documents. Courts will consider lifting the corporate veil where the company structure is misused: for example, in cases of fraud, abuse of rights, or where there is a clear con - fusion between the assets or identity of the company and those of its controllers. Such intervention remains rare and is assessed on a case-by-case basis, with a high evidentiary threshold. Employment relationships in Luxembourg are gov - erned by a combination of statutory law, regulations and negotiated instruments, rather than by a single source. Statutory Law The primary source is statutory legislation, in particu - lar: • the Luxembourg Labour Code, which contains the core rules governing employment relationships; and • additional laws and Grand‑Ducal regulations, which complement the Labour Code and regulate specific aspects of employment. 4. Employment Law 4.1 Nature of Applicable Regulations These statutory rules lay down the fundamental framework applicable to employment relationships, including rights and obligations of employers and employees.
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