Employment contracts are individual-specific (an agreement in which one person agrees to work for another in return for payment) and must exist in writing from the beginning of the employment period. There must be two copies of the signed contract: one for the employer and one for the employee. Only the employee has the right to establish, by any means, the existence of the contract in the event no written employment contract exists. Employment contracts concluded orally are automatically deemed permanent employment contracts.
The standard contract in Luxembourg is the open-ended contract. A fixed-term contract is prohibited for permanent work. It is permitted only in order to carry out a specific type of work over a defined period of time, such as: temporary replacement; seasonal work; performance of work in several specified sectors of activity or occasional and time-defined work; contracts concluded between an employer and a student or a pupil; or urgent and necessary works to prevent a negative impact on the business.
The Labour Code provides for a list of cases in which recourse to fixed-term contracts is authorised. If a fixed-term contract is signed outside the cases provided for by law, i.e. in order to carry out a type of work, which is not a precise and unsustainable type of work, the contract will automatically be reclassified as a permanent contract. By principle, fixed-term contracts cannot exceed a duration of 24 months including the possibility of two renewals. If a compulsory element is not included in the agreement, the fixed-term contract will be deemed an indefinite employment contract.
An agreed trial period may be written and signed before the employee starts working in both indefinite and fixed-term contracts. The general principle is that the trial period cannot be shorter than 2 weeks and longer than 6 months, depending on the qualifications of the employee. A contract can contain a trial period of 12 months, if the salary reaches a certain amount (fixed by a grand-ducal regulation). A trial period that does not exceed 1 month must be specified in weeks, whereas trial periods of over 1 month must be specified in months. Neither party to the employment contract may extend or renew the trial period. If employment is suspended for sick leave, the trial period is automatically extended accordingly, although by no more than 1 month.
Employment cannot be terminated by any party during the first 2 weeks of the trial period. In the event of dismissal during the trial period, the employer is not subject to the same notice periods as after the end of the trial period. The duration of the notice period depends on the length of the initially stipulated trial period. The reasons for dismissal are not required. If the trial period is expressed in months, the notice to be given is 4 days per month, with a minimum of 15 days and a maximum of 1 month.