For context, a first law dated 17 February 2025, which entered into effect on 2 March 2025 (with a transitional period for some operations ending on 1 April 2025) has transposed corporate matters (including already some employee protection aspects) of the Mobility Directive (see our previous newsflash Luxembourg nears the finish line on the implementation of the Mobility Directive for more information).

Recently a second law dated 25 March 2025 dealing with employment law aspects and amending the Labour Code for the transposition of the Mobility Directive has been published on 28 March 2025 and shall enter into effect on 1 April 2025 (the New Law).

Indeed, the Mobility Directive does not only protect the rights of creditors and shareholders of companies involved in cross-border conversions, mergers, or demergers but also places a strong emphasis on protecting the rights and interests of employees affected by these operations.

Which companies are concerned by the New Law?

  • According to the new provisions, the concerned companies are public limited companies (SAs), private limited companies (SARLs), and partnerships limited by shares (SCAs).

What are the new provisions introduced by this transposition?

  • The Labour Code no longer only governs cross-border mergers but extends its scope to cross-border conversions and demergers.
  • The Labour Code is supplemented by provisions governing the information, consultation, and participation of employees in each case of cross-border conversion, merger, or division, such as:
  1. Obligation of information and consultation: Obligation to inform and consult the staff delegation before any operation of merger, conversion, or demerger of the concerned company.
  2. Obligation of Employee participation: Obligation to have employee representation within the board of directors or the supervisory board management of any company with more than 800 employees over the past three years.
  3. Protection of Employee Participation Rights: Any SAs resulting from a cross-border merger, conversion, or demerger that is governed by an employee participation system must take the necessary measures to ensure that employee participation rights are protected for a period of four years following the completed operation.
  4. Special Negotiation Body: Obligation for the company to inform its employees or their representatives, in a strict timeframe, if it chooses to apply the standard provisions relating to employee participation provided in the Labour Code or to engage in negotiations within a Special Negotiating Body.

Entering into effect

As mentioned above, the New Law shall enter into effect on 1 April 2025 and does not provide for any transitional period.

Our employment law experts remain at your disposal to anticipate and further detail the impact of the above on your intended restructurings and acquisitions.