Dismissal with notice in Luxembourg

Employees who can be dismissed with notice

To begin with, the first thing one should bear in mind is that not all persons can be subject to dismissal with notice in Luxembourg. The following categories of people cannot be dismissed in this way:

• Employees with a fixed-term contract: normally persons with this type of contract cannot be dismissed with notice, however, if the company still proceeds with the dismissal, it must compensate the worker by paying him the salary that he would have received during the notice period that would have had to be respected if the contract had been for an indefinite term.
• Staff representatives and equality, health and safety delegates: these persons may not be dismissed during the entire legal mandate (5 years) or in the first 6 months following the expiration or termination of their mandate or the 3 months before the personnel elections, from the presentation of their candidacy.
• Employees on maternity leave.
• Employees on parental leave.

Additionally, it is important to note that the employer must resort to the collective dismissal procedure if he intends to dismiss for reasons other than personal reasons 7 workers in 30 days or 15 workers in 90 days. 

Possible reasons for dismissal with notice in Luxembourg

In Luxembourg, in order to dismiss a person, there must be reasons that justify it, it is not possible to dismiss someone for no reason, these reasons can be due to personal factors and be related to the dismissed person or to economic factors and be related to the company's operation.

• Reasons of a personal nature: they may be related to the worker's aptitude or behavior and include the following cases: Insufficient quality or quantity of work performed. Frequent or prolonged absences due to non-work incapacity. The employee's behavior towards his or her employer, co-workers or customers. Systematic non-compliance with work schedules. Facts related to the employee's private life that have repercussions on his work.
• Reasons of an economic nature: they must be related to an intention of the employer to restructure the company and cut jobs. If this is the case, the company must be able to explain precisely and objectively the reason for adopting the restructuring measures and the impact of these measures on the employee's job, clearly explaining the reasons why it cannot keep the employee in his or her job.

Although there must be reasons giving rise to the dismissal, the employer is not obliged to specify them in the dismissal letter. If the dismissed employee wants to know the reasons, he must request them by registered letter within one month of the receipt of the dismissal letter. The employer must reply to the employee also by registered letter within one month of receipt of the employee's request, indicating precisely the reasons for dismissal related to the employee or to the company's operations.

Notice of dismissal

Besides the fact that there must be a reason for the discharge as we saw in the previous section, the employer is obliged to inform the employee of his dismissal by letter. This letter can be sent by registered mail or can be delivered by hand to the employee who must sign a receipt or a duplicate thereof as proof of receipt.

This letter must indicate to the employee that he is being dismissed with notice and may mention the notice period to which the employee is entitled according to his seniority in the company as well as possible dispensations from work.

Duration of the notice period

The period of notice of dismissal in Luxembourg available to an employee upon termination depends on the employee's length of service with the company. In addition, it is necessary to consider that employees who have been working for more than 5 years are entitled to a severance payment which can be exchanged for an extension of the notice period in companies with more than 20 employees. The following table shows the duration of this period taking into account all these factors:

Start of the notice period

Regardless of the date on which the employee receives the letter of notice, the notice period begins on the 15th day of the current month if the letter of dismissal was sent before that day or on the 1st day of the following month, if the letter of dismissal is sent between the 15th and the last day of the month.

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Pre-dismissal interview

If the company has 150 employees or more, the employer must call the employee to a prior interview before dismissing him, otherwise, he must pay the employee a compensation of up to one month's salary for formal irregularities in the dismissal. In companies with less than 150 employees, the employer may call the employee to a previous interview, although it is not mandatory. 

The invitation must be sent by registered letter with acknowledgment of receipt or by hand delivery against signature and the employer must send a copy to the personnel delegation.

The letter must indicate the reason for the convocation, the place of the interview and the date, which cannot be before the second working day following the sending of the letter. It must also indicate, on the one hand, the possibility for the employee to be assisted by another employee of the company or a representative of a trade union with representation at the national level and represented in the company's staff delegation. On the other hand, it must also indicate the possibility for the employer to be assisted, in this case, by a member of staff or a representative of an employer's organization.

The purpose of the interview should be to inform the employee that his or her dismissal is being considered, to explain the reasons and to allow the employee to express his views on the matter.

The severance pay

An employer who dismisses an employee who has been with the company for more than 5 years for any reason other than gross misconduct must give him, in addition to a notice, a severance payment or an extension of the notice if the company has more than 20 employees and the employer wishes to opt for such substitution. In addition, the employer must state his choice in the dismissal letter.

The following table takes up the previous table where we mentioned the possible extension of the notice period and adds the severance pay to which the employees are entitled according to their seniority in the company.