Luxemburg case law update
Consequences of reclassifying a CDD [fixed-term contract] as a CDI [permanent contract]
In a ruling on 29 October 2015, the eighth chamber of the Labour Court of appeal judged that in a case of reclassification of a CDD [fixed term contract] as a CDI [permanent contract], the rupture of the working relationship resulting from the expiry of the CDD was attributable to the employer. For the Court, when the employer has not respected the rules relating to termination with immediate effect of the CDI (i.e. sending a detailed letter of termination with immediate effect], the dismissal was unfair. In this context, the employee was able to claim payment of compensation in lieu of notice, as well as payment of damages (Labour Court of Appeal, 29 October 2015, no. 40996).
Redundancies to improve the company’s profitability
In a ruling on 14 January 2016, the third chamber of the Labour Court of Appeal recalled that the employer could freely decide on the measures to take to safeguard the interests of the company and that in this context it has “very diverse means of taking action, including the reduction of salary costs”. For the Court, “there is no obligation for the employer to take measures to reduce other costs before reducing salary costs. The employer is also entitled to take action on salary costs not only when the economic survival of the company depends upon it, but also when this reduction enables the employer to increase the company’s economic profitability.” (Labour Court of Appeal, 14 January 2016, no. 40823).