Focus points for temporary contracts
Use of fixed term contracts
(Article L.122-1 of the Labour Code)
Fixed term contracts can only be entered into for:
- Specific and unsustainable tasks, and
- cannot be used in the long term for jobs linked with the normal, permanent business activity of the company.
It can therefore only be used in special cases, to meet labour needs which do not arise from the normal, permanent business activity of the company.
Fixed term contracts must state their purpose object clearly. In the absence of any wording regarding the purpose of a contract of employment, it cannot be established that the contract has been entered into for a specific, non-permanent task, and it will therefore be deemed to be permanent.
Since a law of December 23th 2013, employers wishing to recruit personnel under open-ended contracts must inform staff already employed in the company under fixed-term contracts when the vacancy in question arises (Article L.122-10 of the Labour Code.
The 9 cases where fixed term contracts are applicable:
- Replacement of an absent employee;
- Seasonal contract;
- Jobs where it is the norm to use fixed-term contracts;
- Occasional and one-off tasks;
- Temporary increase in work;
- Urgent work;
- Employment of a jobseeker registered with Adem;
- Recruitment of certain jobseekers;
- Additional training.
The principle of equal treatment
(Article L 122-10 of the Labour Code)
Principle
Unless otherwise required by law, the legal provisions and agreements applicable to employees bound by open-ended contracts are also applicable to employees bound by fixed-term contracts.
Duration of fixed-term contract
Setting the duration of a fixed-term contract
(Article L.122-3 of the Labour Code)
Principle
A fixed-term contract must contain a specific term, set at the time of signature.
Contracts whose purpose is to replace workers who are absent due to parental leave cannot start more than three months before the date when the parental leave commences and shall end no later than three months after the end of the parental leave of the absent worker.
Contracts whose purpose is to replace an employee who is absent on parental leave following maternity leave cannot start more than three months before the date when the maternity leave commences and shall end no later than three months after the end of the parental leave of the worker being replaced.
Exceptions
In the limited number of cases listed below, the contract may contain an indefinite term which is not specified when the contract is signed:
- Replacement of a worker who is absent or whose contract of employment has been suspended;
- Jobs of a seasonal nature;
- Jobs where it is the norm not to use permanent contracts due to the nature of the work carried out or the temporary nature of the employment.
In these three cases, the employer can choose between a fixed-term or permanent contract, in which case the contract will end when the task to be carried out by the worker is completed.
Contracts entered into for an indefinite period must, however, include a minimum guaranteed period for the worker (the Law does not set specific rules regarding this minimum period).
N.B.: If the purpose of a contract has been achieved before the end of the minimum contract period, the employer must retain the worker until this minimum period has ended or grant him or her the benefit of the full salary up to that date.
- If the wording determining the minimum duration of the contract is omitted, this is in breach of legal requirements; contracts entered into without setting any minimum period are then deemed to be open-ended C.S.J. 22/1/1998).
The maximum duration of fixed term contracts
(Article L.122-4. of the Employment Law)
Principle
A fixed term contract shall not exceed a period of 24 months, including renewal, for any given employee.
The duration of any trial period agreed between the parties is taken into account when calculating the maximum term of the fixed term contract.
Exceptions
Seasonal contracts: seasonal contracts shall not have a term of more than 10 months within one period of 12 successive months including renewal.
There are certain legal provisions providing exemptions from the 24-month ceiling:
- University of Luxembourg teaching staff/researchers;
- Fixed term contracts entered into between a sports club or federation on one hand and a trainer or athlete on the other.
A fixed term contract may be renewed more than twice, even for a period of more than 24 months, when entered into with:
- University of Luxembourg teaching/research staff;
- Personnel in the entertainments industry;
- Between public research centres and researchers;
- Between the national or local authorities on one hand and the head of a pre-school or primary education class, heads of secondary schools, etc.;
- Between local authorities, local authority associations, or private bodies;
- Between the archbishopric on one hand and teachers of religion on the other, with a view to providing temporary replacements.
In addition, the Employment Law states that the Minister of Employment may, in special cases, authorise an increase in the maximum 24-month period in the interests of workers whose jobs require highly specialist knowledge and confirmed experience in their special fields.
Penalties
With the exceptions mentioned above, a fixed term contract which exceeds the maximum 24-month period shall be deemed to have been entered into for an open-ended period from the start (T.T.25/09/1992).
However, the 24-month limit is considered to be a legal requirement with the sole purpose of protecting the employees, so an employee may decide to maintain a fixed term contract in force which has been entered into for more than 24 months if he or she considers that such contracts are more in his or her favour than open-ended contracts which can be unilaterally terminated at any time.
Renewal of fixed-term contracts
(Article L.122-5. Of the Labour Code)
Principle
A fixed term contract may be renewed twice for a specific new period.
However, the principle and/or conditions of renewal must be covered by a special renewal clause in the original contract of employment or a subsequent amendment to such contract.
If there is no written renewal clause, a renewed fixed-term contract is assumed to be entered into for an open-ended period, in the absence of any admissible evidence to the contrary.
Exceptions
Seasonal contracts are subject to a different set of rules. These contracts can always be carried over to the following season, and the Law does not set any limit on the number of renewals. It is thus possible to enter into a seasonal contract with the same worker for an unlimited number of seasons without this contract becoming open-ended.
In this case, if the employer decides not to use a seasonal worker for a new season who has been employed for more than two seasons by virtue of a written renewal clause, the termination of the seasonal work relationship will therefore be treated in the same way as a dismissal subject to the legal provisions for open-ended contracts.
Continuation of the contractual relationship at the end of a fixed-term contract
If the employment relationship continues after the expiry of the fixed-term contract, it then becomes an permanent contract unless it is renewed in accordance with the above provisions.
Principle
A single position cannot in theory be filled by a succession of fixed-term contracts.
On expiry of a fixed-term contract, the employer cannot use the same employee or another worker recruited on the basis of a fixed-term contract to fill the post of that employee before the end of a period known as the waiting period, which is equal to one third of the total duration of the contract which has just expired.
Exceptions
- Further absence of the replaced employee;
- Urgent work;
- Seasonal work contract;
- Contract used to fill a job for which it is the norm not to use an open-ended contract;
- Early termination due to the action of an employee under a fixed term contract, in other words arising from that employee’s own initiative or serious misconduct;
- Refusal by the employee to renew a fixed term contract containing a renewal clause for the remaining term of the contract which is not renewed;
- Employment of a jobseeker registered with ADEM;
- Recruitment of certain jobseekers;
- Additional training.
Penalties
Any fixed term contract entered into in breach of the following requirements shall be deemed to be open-ended:
- The legal regulations authorising use of a fixed-term contract;
- The regulations governing the form of the fixed-term contract;
- The setting of the term and maximum duration of the fixed-term contract;
- The regulations in renewal of fixed-term contracts;
- The regulations on the waiting period.
Reminder: the precedents of the C.S.J of 20.11.1997 according to which the legal requirements regarding fixed term contracts have been laid down with the aim of protecting the employee, who is their sole beneficiary.
Axis Advice is based on up-to-date data and reliable sources. However, the articles are provided for information purposes and do not constitute binding legal advice. Although Axis makes every effort to keep the content of this article correct and up-to-date, no rights can be derived from it.
