News - Luxembourg

Luxembourg - January 2016

26 week protection from sickness dismissal can be curtailed

A new law came into force in Luxembourg on 1 September 2015 which amended the provisions relating to an employee’s inability to work due to sickness, both from the perspective of employment law and social security law.

Payment of an employee on sick leave must stop from the date the National Health Fund of Luxembourg (‘Caisse Nationale de Santé’, the CNS) notifies an employer to cease payment, and can only resume once the decision has been revoked due to legal recourse by the employee.

The new legislation seeks to address the rising statistics of employees on sick leave in Luxembourg.  During sick leave, employers are liable to pay the employee’s salary throughout the first 77 days and the National Health Fund should pay as from the 78th day, until the employee is back at work.  The employer is not permitted to dismiss the employee during the first 26 weeks, even if the employer has sufficient reason to do so.

An employer will be informed by the CNS as to whether they should cease any payment of salary to an employee (usually due to the CNS finding that the employee’s sickness is no longer justified), or if a decision has been reached that should change this instruction.

What does this mean for my business?

Before implementation of the new provisions, employees medically certified as unable to work were protected against dismissal for a period of 26 weeks.  Now they are protected against dismissal for the same period only if the National Health Fund has not notified the employer to stop the payment of salary during the period of sick leave.  This means that the protection against dismissal of 26 weeks in favour of employees on sick leave may cease prematurely if the CNS conducts medical checks and finds that the employee’s sick leave is unnecessary.

Resources

Law dated 7 August 2015 amending the social security code and the Labour code, Memorial A, No 167 of 28 August 2015, page 3952.

Further information

For further information or to discuss any of the issues raised, please contact Annie Elfassi on +352 466 230 480, Loyens & Loeff Luxembourg.

Disclaimer

Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

Circular 230 disclosure

To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.