Around 60% of employees are covered by collective bargaining while trade union density is about 40%.
Collective bargaining system
Collective bargaining mainly takes place at sectoral and local/enterprise level and regulations governing the system are set out in legislation, the most recent of which was the 2004 Industrial Relations Act. The law sets out the requirements of recognising trade unions as representative and once recognised as such trade unions can required employers to negotiate collective agreements.
National, cross-sectoral bargaining has just taken off following the 2004 Act and the first agreement to be signed by the social partners covered access to vocational training.
Trade unions also have representation and rights to information through the chamber system. There are three chambers for employers and three for employees (Labour, White-Collar and Civil Servants) that are consulted by the government over social and economic issues.
National tripartite social dialogue takes place in the Economic and Social Council (ESC), which provides a forum for examining and discussing social, economic, or financial problems affecting particular sectors or the national economy as a whole. There is also a Tripartite Coordination Committee that brings together representatives of employers, labour, and the public authorities to discuss how to tackle economic and social problems such as industrial restructuring.
Legal regulation of pay and working conditions
There is a statutory indexation system covering wages which requires them to be increased if inflation goes above 2.5%. There is also a statutory minimum wage which is covered by the indexation arrangement but which is also reviewed every two years.
The two main confederations are the Confederation of Independent Trade Unions (OGB-L) with 16 affiliates and socialist orientation, and the Confederation of Christian Unions in Luxembourg (LCGB) which brings together 16 federations made up of 10 sector federations and six that organise specific groups of workers (for example, migrant workers and women). In the public sector there is also the CGFP (Confédération Générale de la Fonction Publique) which has 11 sub-organisations and the FGFC (Fédération Générale de la Fonction Communale) in the local government sector.
There is one collective agreement covering all public sector workers employed on the basis of a private employment contract. Civil servants’ conditions of employment are covered by statute. The CGFP organises civil servants while blue-collar public sector workers are represented by the OGB-L or the LCGB both of which have separate affiliates organising public sector workers and health workers. The LCGB also has an affiliated union that organises local authority workers.