In Luxembourg, the Code of Labor outlines the legal requirements for notice periods during employment termination. These periods apply to both employer-initiated dismissal and employee resignation.

Notice Periods for Employers

The notice period an employer must provide an employee depends on the employee's length of service at the time of termination. The minimum notice periods are:

• Less than 5 years of service: 2 months
• Between 5 and less than 10 years of service: 4 months
• 10 years or more of service: 6 months

The notice period starts on the 15th day of the current month if the dismissal letter is sent before the 15th. If sent between the 15th and the last day of the month, the notice period starts on the 1st day of the following month.

Notice Periods for Employees

Employees are also required to provide notice when resigning, with the length of notice determined by their tenure. The minimum notice periods for employees are:

• Less than 5 years of service: 1 month
• Between 5 and less than 10 years of service: 2 months
• 10 years or more of service: 3 months

Special Case: Probationary Period

There are different notice periods during the probationary period as outlined in Article L.122-4 of the CLT. The notice period is based on the duration of the probationary period:

• Probationary period in weeks: The notice period is the same number of days as there are weeks in the probationary period (e.g., a 3-week probationary period requires 3 days' notice).
• Probationary period in months(maximum 2 months): The notice period is half the length of the probationary period (e.g., a 2-month probationary period requires 1 month's notice).

Additional Points

• A collective bargaining agreement may supersede the statutory notice periods outlined in the CLT. It's recommended to consult the relevant collective agreement for specific provisions.
• The notice period can be shortened through mutual agreement between the employer and employee.

Severance pay is a form of compensation that an employee in Luxembourg may be entitled to under certain circumstances when their employment is terminated by their employer.

Eligibility Criteria

To be eligible for severance pay in Luxembourg, an employee must have been dismissed by their employer and have at least 5 years of uninterrupted service with the company at the time the notice period ends.

Severance Pay Calculation

The amount of severance pay an employee is entitled to depends on their length of service with the company. For 5-9 years of service, the employee is entitled to 1 month's salary. For 10-14 years of service, the employee is entitled to 2 months' salary. For 15-19 years of service, the employee is entitled to 3 months' salary. This pattern continues, with an additional month's salary for every 5 years of service, up to a maximum of 12 months' salary for 30 years or more of service. The monthly salary used for these calculations is the average gross salary earned during the last three months of employment.

Exemptions

There are certain cases where severance pay is not granted. These include when the employer terminates the employment due to serious misconduct by the employee, or when the employee is entitled to a normal retirement pension at the time of dismissal.

Important Notes

Severance pay is intended to provide temporary support. Therefore, an employee who is eligible for severance pay may still be entitled to unemployment benefits if they meet separate eligibility requirements.

The termination of an employment contract in Luxembourg is a regulated process designed to uphold the rights of both employers and employees. The procedure varies depending on who initiates the termination and the reasons behind it.

Employer-Initiated Termination

Employer-initiated termination falls into three main categories:

Dismissal with Notice

In this case, the employer must provide written notice of dismissal, stating the start and end dates of the notice period. The employer is not legally required to provide grounds for dismissal in the termination letter unless the employee requests them in writing within one month following receipt of the letter. For companies with 150+ employees, the employer must invite the employee to a pre-dismissal interview before issuing the formal termination letter.

Dismissal for Serious Misconduct

If there is a serious breach of contract, the employer can dismiss an employee immediately and without notice. The termination letter must clearly state the reasons for the dismissal, citing the specific acts constituting serious misconduct.

Dismissal During the Trial/Probationary Period

During the trial period, reduced notice periods apply and can be as short as a few days depending on the probationary period's length. The employer is not obligated to provide reasons for termination during the trial period.

Employee Resignation

Employees are required to provide written notice of their resignation. The notice period varies based on the employee's length of service. Employees are not required to explain the reasons for their resignation.

Additional Notes

Specific industries or companies may have additional regulations outlined in collective bargaining agreements. It's highly recommended that both employers and employees consult with legal professionals to ensure full compliance with Luxembourg labor laws during the termination process.