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Board-level Representation

Companies with more than 1,000 employees or with a substantial state involvement must have employee representatives at board level. They generally have a third of the seats.

Public limited companies in Luxembourg (SAs) have a choice of governance structure. They can either have single-tier board system, with a board of directors, or a two-tier system with a supervisory board and a management board.[1]

 

Employees have representation at board level in companies which have at least 1,000 employees or which are more than 25% state owned or have a state concession relating to their main activity. The companies in this last group are listed in a government decree in 1974, when there were four, with a fifth, Luxembourg Airport being added in 2008.[2]. In 2019, there were 38 companies in Luxembourg with 1,000 or more employees.[3]

 

In companies with 1,000 or more employees the employee representatives make up one third of the supervisory board or board of directors, depending on the corporate governance structure chosen by the company. There must be at least nine members of the board concerned in total, with the result that there must be at least three employee representatives on the board.

 

In companies with at least 25% state participation or a state concession, there is one employee representative for every 100 employees, with a minimum of three employee representatives and a maximum of one third of the total board – either supervisory board or board of directors.

 

The employee representatives are elected by the employee delegation, from among the employees of the company, although they must have at least two years’ service. The one exception is the steel industry where three of the employee representatives are chosen by nationally representative unions (see section on unions) and can include non-employees.

 

The employee representatives have the same rights and duties as other members of the board of directors and their period of office is the same as other members. This depends on the articles of the company concerned, but it cannot be longer than six years. There is no limit on the number of terms of office which can be served.

 

Board-level employee representatives continue to be employees of the company concerned and are protected against dismissal during their period of office and for the following six months. However, if grave misconduct is alleged, the employer can take the issue to the labour court and request their dismissal.

 

Employee representatives cannot be members of more than two boards, and they cannot be members of more than one board operating in the same business.

 

[1] https://guichet.public.lu/en/entreprises/gestion-juridique-comptabilite/gestion/societe-anonyme/administration-SA.html#bloub-1 (Accessed 22.04.2020)

[2] CSL Entreprises concernées https://www.csl.lu/fr/vos-droits/droit-du-travail/la-representation-du-personnel/les-administrateurs-salaries-dans-les-societes-anonymes/entreprises-concernees (Accessed 22.04.2020)

[3] Liste des principaux employeurs par taille, statec, 2019 https://statistiques.public.lu/fr/publications/thematique/entreprises/principal-employeurs/princip-employeurs-taille/index.html (Accessed 22.04.2020)  

L. Fulton (2021) National Industrial Relations, an update (2019-2021). Labour Research Department and ETUI (online publication). Online publication available at http://www.worker-participation.eu/National-Industrial-Relations.