Union negotiations did not go as expected, says Michel Reckinger

The Luxembourg Employers' Association (UEL) president claims that the Independent Luxembourg Trade Union Confederation (OGBL) and the Luxembourg Confederation of Christian Trade Unions (LCGB) had held the talks hostage.

Re-igniting the 'growth engine'

Reckinger added,  it was not the time to block the modernisation of labour laws, as they were essential for relaunching the economy.

The country has effectively been in recession for years, with job creation slowing sharply. “Last year, employment grew by just 1% – in the private sector, only 0.3%,” Reckinger noted, adding that Luxembourg typically sees around 3% growth. This level of growth, he warned, is vital “to finance things such as pensions.”

The growth engine is stalling, Reckinger continues, which is why people need to work more productive hours than in recent years. If one excludes the financial sector, Luxembourg lags behind the rest of Europe in terms of productive hours.

Some companies are no longer making money, he warned, which means more flexibility in labour laws is urgently required, such as modern rules allowing hybrid work.

UEL not afraid to tackle pension spending

The UEL has presented alternative proposals for pension reform, diverging from the positions taken by the country’s trade unions.Reckinger argued that meaningful reform is needed – one in which all parties contribute, including employers, unions, the state, civil servants, and current pensioners.

Reckinger also stressed that sustainability could not be achieved by focusing solely on revenue. Expenditure must also be considered.

While the UEL does not support cutting pensions, it views the pension adjustment and the end-of-year allowance as supplementary benefits that higher-income pensioners could reasonably do without. These elements, Reckinger suggested, could be socially staggered to protect those on lower pensions.

Another key proposal involves increasing the number of contribution years.

The UEL supports allowing people to work longer voluntarily – but under a structure that incentivises extended careers. Reckinger explained that a full pension could be tied to 43 years of contributions, while retiring earlier – for example after 40 years – would remain possible but come with a reduced payout.

Reduced pensions would be socially adjusted: “The reduction would be smallest for those on lower pensions,” he said.

At the close of the interview, Reckinger made clear that his goal was to bring balance to the public debate. He expressed disappointment with the outcomes of the recent rounds of social dialogue and criticised the public focus on union demands, which were leaked in media reports.

The employers’ side, he argued, had not yet been given a fair hearing – something he aimed to correct by going public with their proposals.

Negotiations between social partners are due to resume on 3 September.

Sunday work discussions prove challenging

The UEL president expressed disappointment that the government had backed down over opening hours and Sunday work. The two initial draft laws were much more ambitious and aligned with employers' interests, compared to the current proposals under debate, said Reckinger, without providing further detail.

In any case, there was little to do with collective agreements, and long opening hours are already commonplace these days, under different regulations.

According to RTL sources, Sunday working hours exceeding four hours of work will be permitted only under professional agreements, in the ongoing discussions. However, the current proposal stipulates that smaller companies will not have to apply this regulation, although the government and unions are yet to agree on what constitutes a small company.

The government says a small business has fewer than 15 employees, and the trade unions agree - but the employers want this limit to be increased to 49 employees.

Working eight hours on a Sunday is beneficial to staff, says Reckinger, as they would only have to commute one Sunday, instead of splitting the hours over two Sundays.

Full interview available in Luxembourgish: