In November 2024, the non-profit association CASA laid off more than half of its 34 employees following investigations by the Inspectorate of Labour and Mines (ITM) and the National Employment Agency (ADEM) into irregularities in the association’s employment practices. The layoffs were reported by several media outlets, which highlighted concerns over CASA’s handling of leave and employment contracts.
CASA, which has operated in Luxembourg for 45 years, provided fixed-term contracts to unemployed individuals through funding from ADEM. However, the association came under scrutiny for its use of “Compensated Temporary Occupation” (OTI) contracts, which are not permitted for non-profit associations in Luxembourg.
In response to a parliamentary question submitted by Pirate Party MP Sven Clement, Minister of Labour Georges Mischo confirmed that ADEM and the ITM conducted three inspections at CASA following complaints. Workers under OTI contracts in September 2024 were invited to meet with ADEM, and after the layoffs in November, the agency assisted the 18 affected employees in finding new opportunities. While some have successfully transitioned to new roles, others are expected to return to work “soon”.
Ministers Georges Mischo and Max Hahn, along with ADEM Director Isabelle Schlesser, provided further details to members of the relevant parliamentary committees. The discussions primarily focused on the nature of the contracts issued by CASA. Schlesser acknowledged that, despite being against current regulations, the use of OTI contracts by non-profits was standard practice in Luxembourg for years. In his response to MP Clement’s parliamentary question, Minister Mischo added that CASA had previously been granted exceptional treatment, explaining that it was decided “under a previous labour minister” that CASA should be allowed to operate as a foundation and offer OTI contracts.
MP Djuna Bernard of the Green Party (Déi Gréng), who called for the parliamentary committee to address the issue, criticised this arrangement as “preferential treatment” and argued that the decision should be scrutinised.
The identity of the labour minister who granted CASA the exceptional regulation remains unclear, with further details expected to be disclosed at a later date. MP Claire Delcourt of the Luxembourg Socialist Workers’ Party (LSAP), whose party has held the labour ministry for much of the past decade, stated that she had no additional information but did not believe the decision involved “bad intentions”.
Delcourt suggested that the decision was likely motivated by the social nature of CASA’s services, which may have been seen as justifying special treatment.
Marc Spautz, parliamentary group leader of the Christian Social People’s Party (CSV) and president of the Parliamentary Labour Committee, noted that it remains to be determined whether CASA was the only non-profit to benefit from such a special status. He acknowledged that, prior to the reform of the law governing non-profit associations, there was a grey area regarding which organisations were permitted to offer OTI contracts. The committee now aims to clarify when and how this issue was resolved.
What is certain is that irregularities within CASA led to formal complaints. Following the committee meeting, MPs indicated that there were suspicions of fraud, though no further details were provided due to ongoing investigations by the public prosecutor’s office and the ITM. Spautz emphasised that the committee intends to await the conclusions of these investigations before drawing definitive conclusions.
Spautz also stated that the labour committee, alongside the committee on family affairs, plans to review the current frameworks governing both Aid for Hiring the Long-Term Unemployed (EMIS) and OTI contracts. The goal is to improve the legal framework and prevent similar situations in the future.
While the Alternative Democratic Reform Party (ADR) described the discussion as “necessary”, the Democratic Party (DP) expressed its intention to explore why non-profit associations are prohibited from offering such contracts in the first place.
