Luxembourg Times reported earlier this week that JP Morgan’s banking branch in Luxembourg has made a few employees redundant every month since the beginning of the year, for a total of 11 layoffs.
Aleba vice-president Jean-Jacques Rieff told Paperjam that employers who intend to fire at least seven workers in a 30-day period or at least 15 workers in a 90-day period for non-personal reasons–such as organisational, technical or economic ones–are required by Article L.166-1 of the Labour Code to follow the collective redundancy procedure. The rule applies to all companies in Luxembourg, not only banks.
The union is concerned that the bank may be able to get around the rules intended to protect workers by taking this slow approach.
There could have been an alternative
Rieff said that “those practices are rather rare” in Luxembourg, but Aleba will intervene when these practices come to their attention. Generally, a company agreement–similar to a social plan–will be negotiated between the employee delegation and the management before reaching the social plan thresholds. “A company agreement ensures that redundancies are applied at a collective level with a fairer outcome for the employees.”
Many senior executives in some banks
Aleba also expressed concerns that 75% of JP Morgan’s Luxembourg banking branch employees are senior executives. When made redundant for economic reasons, senior executives lose their advantageous benefits from the collective work agreement (CWA). Their notice and severance compensation rights are therefore based on legal minimums from a collective bargaining agreement in the banking sector.
Rieff noted that article L.162-8 in the labour law has a rather unclear definition of senior executives leaving too much scope for interpretation. “Reporting than 50% of the staff as executives is not realistic… but it is not a custom in Luxembourg… yet JP Morgan is not alone in the banking sector.” There may be as many as 10,000 “” (faux cadres) in the Luxembourg banking sector.
He noted that there are no rules regarding the redundancies of employees that have been recently promoted in their organisation. Yet, he observed that courts tend to rule in favour of employees in these cases. However, he thinks that employees are reluctant to go to court, and they would rather elect a “settlement agreement” with the employer.
Political progress not expected in the short term
Rieff expressed his frustration at the lack of responsiveness from the government on Aleba’s requests for lower thresholds and more power to the employee delegations. “The labour minister is not listening to us, he is invisible.”
“We want to become more active with firms having too many employees outside the CWA… JP Morgan with 75%, it is very serious,” stated Rieff. Aleba has no statistics at the national level, but the trend is “definitely upward.”
Contacted, JP Morgan replied that it preferred to decline any request for comment.
