In which cases is the temporary loan of labour permissible?

Employers, other than temporary worker contractors, may be authorised by the Minister of Labour to place their employees at the temporary disposal of other employers for a period of time determined by the Ministry, in the event of:

• imminent dismissal or underemployment;
• to perform casual work in the same sector of activity, insofar as the company taking on help is not able to hire permanent staff;
• restructuring within a group of companies;
• as part of a job retention plan.

Apart from these cases, the Minister of Labour may exceptionally authorise employers to make their employees available to other employers for a period of time that the Ministry shall determine, provided that this availability is covered by an agreement between social partners that carries with it the right to conclude a collective agreement.

Is the employee who has been loaned out entitled to continued remuneration?

The remuneration paid by the company of origin to an employee who has been loaned out may not be lower than that to which an employee with the same or equivalent professional qualification hired under the same terms as a permanent employee by the employer would be entitled after the initial trial period.

Are employees who have been loaned to a second company entitled to the same access as permanent employees of that company?

Employees who are loaned out can access all collective facilities, in particular catering facilities, and the means of transport available to permanent employees of a user company under the same conditions as these permanent employees.

How are responsibilities shared between the user companies and the employer?

For the duration of the assignment of employees on loan, responsibilities are shared.

The user company is solely responsible for:

• compliance with safety, hygiene and health conditions at work and;
• the application to these employees of the legal, regulatory, administrative and contractual provisions relating to working conditions and the protection of employees in the exercise of their profession.

The employer is solely responsible for:

• the remuneration of the employee who is on loan and
• all related social security and tax charges.

What law applies in the case of temporary cross-border loan of labour?

The provisions of Luxembourg labour law are applicable to the loan of labour concerning employees made available to a company conducting business on Luxembourg territory.

When is the lending of labour prohibited?

The activity carried out by an employer outside the rules governing the temporary loan of labour and which consists in making employees hired under an employment contract available to third parties who use these employees and who exercise over them a part of the administrative and hierarchical authority normally reserved for the employer is prohibited.

What are the consequences of unlawful hiring out of labour on an employment contract?

An employment contract by which an employee has been hired to be made available to a user company in violation of the law is void.

In this case, the user company and the employee are considered to be in a permanent employment contract as soon as the employee begins to work.

However, the employee may terminate the contract without legal notice or compensation until the end of the user company’s employment period.

What are the consequences of unlawful hiring out of labour on the remuneration of an employee?

The user company and the person making the employee available to the user company are jointly and severally liable for the payment of wages and supplementary payments, allowances and all related social security and tax charges.