Luxembourg Employment Guide

Navigating Employment Termination in Luxembourg: A Professional Guide

As an international HR specialist, I've observed that Luxembourg maintains stringent regulations governing employment termination. Employers cannot dismiss employees arbitrarily; valid justification is mandatory under Luxembourgish law. Understanding these requirements is crucial for multinational companies operating in this jurisdiction.

Permissible Grounds for Termination

Luxembourg recognizes several legitimate pathways for employment separation:

• Voluntary resignation initiated by the employee
• Mutual agreement between employer and employee
• Employer-initiated termination based on:
  • Probationary period provisions
  • Objective reasons unrelated to employee performance
  • Disciplinary dismissal for misconduct
  • Performance-related issues demonstrating professional inadequacy
• Natural expiration of fixed-term contracts

Notice Period Requirements

Luxembourg mandates minimum notice periods that escalate with employee tenure. For instance, SailGlobal recently managed a termination case where a 7-year employee required 120 days' notice, demonstrating how these rules apply in practice.

Employer-initiated termination notice periods:

• Less than 5 years of service: 60 calendar days
• 5-10 years of service: 120 calendar days
• Over 10 years of service: 180 calendar days

Employee resignation notice periods:

• Less than 5 years of service: 30 calendar days
• 5-10 years of service: 60 calendar days
• Over 10 years of service: 90 calendar days

Severance Pay Regulations

Luxembourg provides substantial severance protections for eligible employees. Those with over five years of service or who don't receive proper termination notice qualify for compensation calculated at 30 days' salary per year of service, capped at 25 months' base salary.

Standard severance amounts by tenure:

• 5-10 years: 4 months' salary
• 10-15 years: 2 months' salary
• 15-20 years: 3 months' salary
• 20-25 years: 6 months' salary
• 25-30 years: 9 months' salary
• 30+ years: 12 months' salary

Properly implementing these termination procedures requires careful documentation and often benefits from specialized HR support like that provided by SailGlobal, particularly when managing cross-border employment relationships.