Perpetuity, substance, and collective agreements as key elements to shape the future of the financial sector.

The financial sector requires stability, substance, and strong collective agreements to address both current and future challenges. This was the common conclusion reached by the Financial Sector Union of OGBL and the Minister of Labour, Georges Engel, following a recent meeting at the request of OGBL.

A delegation from the Financial Sector Union of OGBL, led by Sylvie Reuter and Serge Schimoff, recently met with the Minister of Labour to discuss the current situation and the future of the financial sector in Luxembourg. OGBL wanted to draw the Minister’s attention to several dysfunctions in the financial sector. OGBL also informed the Minister that the two sectoral collective agreements in the financial sector (banking and insurance) will expire this year.

Increase in collective agreement coverage rate.

OGBL and the Minister agreed on the importance of collective agreements, especially in a sector like finance, which is partly driven by large international groups from abroad. The Minister of Labour indicated that the government’s national objective is for at least 80% of employees to be covered by a collective agreement. OGBL drew the Minister’s attention to a major problem faced by the financial sector. In reality, the two sectoral collective agreements currently only apply to a fraction of banking and insurance employees. Many employees are now considered “senior executives” by their companies, without meeting all the criteria for this status according to Luxembourg’s current standards, thus escaping the scope of collective agreements.

Furthermore, almost all non-banking and non-insurance employees in the financial sector do not have a collective agreement. The problem here is primarily that the companies involved do not seem to be organized under an employers’ federation that could serve as an interlocutor for negotiating a collective agreement.
The Minister of Labour and OGBL also emphasized the importance of the financial sector for the Luxembourgish economy and stressed that good working conditions remain essential to maintain the attractiveness of the financial center.

In this context, the issue of reducing working hours is particularly important to the Minister. OGBL expressed openness to discussing this matter, especially considering that atypical working hours are common in the financial sector. OGBL also highlighted that bank employees are increasingly working overtime without it being accounted for as such. Similarly, it has become common for employees sent on missions abroad to use their remote work days, bypassing the use of detachment contracts as required by labor law. Lastly, OGBL insisted that working time related to on-call duties and standby services should be regulated within the framework of collective agreements.

Another consensus between OGBL and the Minister of Labour is the essential role of continuous training and professional reorientation in today’s and tomorrow’s digital finance world – “reskilling” and “upskilling” are the keywords for the future. OGBL emphasized that by developing individual rights to training, employees would be better prepared for new realities, digital disruptions, and ongoing restructuring dictated by purely strategic reasons.

Equal social dialogue in companies.

The financial sector is heavily affected by mergers, splits, and business transfers. OGBL informed the Minister that many international groups do not respect Luxembourgish legislation in this regard. For example, during job cuts resulting from mergers, companies circumvent negotiating social plans (“salami tactics”). OGBL also complained that employees and employee representatives in several banks such as RBC, CACEIS, Credit Suisse, or UBS are currently left uncertain about their professional future. Social dialogue between management and employee delegations is deficient or even paralyzed, to the detriment of employee well-being. Improvements are needed in this regard as well.

It is crucial to improve working and salary conditions, as well as address existing dysfunctions, to prevent further loss of attractiveness of the Luxembourgish financial sector. The banking collective agreement, as mentioned above, has significantly lost substance in recent years, making it difficult to attract or retain employees and talents in this sector, which is nonetheless crucial for Luxembourg.

Finally, the Minister of Labour also took the opportunity to reflect on the role of the financial sector, particularly the work performed by employees during the Covid-19 pandemic. The Luxembourgish economy, with its strong reliance on the financial sector, has greatly benefited from their contributions.

Press release by the OGBL Financial Sector trade union
July 12, 2023