A person who is unemployed can, under certain conditions, request the granting of a full unemployment benefit, in order to avoid finding him or herself without revenu overnight.
The granting of a full unemployment benefit to an unemployed person is subject to various conditions, ie:
1 be involuntarily unemployed,
2 be domiciled in Luxembourg i) at the time of notification of the dismissal (in the case of a permanent contract) or ii) at the latest 6 months before the end of the contract (in case of a contract for a determined duration)
3 be aged between 16 and 64 years old,
4 be able to work, available for the job market and ready to accept any suitable job,
5 be registered as a jobseeker after ADEM and have submitted a claim for full unemployment benefit,
6 have worked for at least 26 weeks in the 12 months preceding the day of registration as a job seeker,
7 not exercise the role of manager, director, managing director or responsible for the daily management in a company,
8 not hold a business license.
Exceptions when starting a new business
Points 7 and 8 above were added by the Luxembourg legislator in 2018, whereas the fact of exercising such a function can have an impact on the availability of the job seeker to accept any other suitable job offered by the Luxembourg Unemployment Agency (ADEM).
As an exception to this principle, and to promote entrepreneurship, the employee may still receive the full unemployment benefit if the gross income resulting from these activities is less than 10% of the reference salary provided for in article L .521-14 of the Labor Code, ie 10% of the salary used as the basis for calculating the full unemployment benefit.
Before the change of the Labor Code in 2018, the applicant receiving compensation creating his own business was denied the benefit of full unemployment benefits either from his affiliation as self-employed or from the time of obtaining the business license as he or she was no longer available for the job market.
Since the change in law, the applicant receiving benefits can continue to receive unemployment benefits while not having to accept all suitable employment for a maximum of six months in order to set up the structures of their new business.
This exception is however limited in time and is only granted on special request.
The request to ADEM must be accompanied by a business plan, a financial plan as well as a certificate from the Minister having establishment permits in his / her attributions that the job seeker fulfills the conditions for see granting an establishment permit.
Termination of the employment relationship
the applicant cannot claim unemployment benefits (1) in the event of unjustified leave of the last job (except if the leave is due to exceptional, valid and convincing reasons) or (2) in the event of dismissal for gross misconduct.
In the case of dismissal for gross misconduct, of a resignation motivated by an act of sexual harassment or by serious grounds arising out of the fact or the fault of the employer, the jobseeker may however apply to the courts for the allocation by provision of the full unemployment benefit pending the final judicial decision of the dispute concerning the lawfulness or the merits of his dismissal or resignation.
It should however be noted that, if the dismissal for gross misconduct or the resignation for fault of the employer are declared justified, the employee will be forced to reimburse all or part of the amounts received as a provision of unemployment compensation .
Availability on the labor market
The condition of “availability on the labor market” is often the subject of discussion between the job seeker wishing to benefit from the granting of the full unemployment benefit and the ADEM.
The examination of availability for the labor market falls within the sovereign discretion of the judge and allows the courts to exclude from the benefit of full unemployment benefits workers who engage in a self-employed or other activity exceeding the limit of simple accessory character.
However, case law has accepted that any activity does not automatically prevent a person from being available for the labor market. The courts therefore assess, on the basis of the facts of each case, what is the scope of the activity in order to conclude whether it gives the job seeker enough time to be able to accept a new full-time job.
In a recent case, the Courts analyzed the labor market availability of a person who working as a cook in a restaurant. (Higher Social Security Council 16 January 2020, Reg. No.: ADEM 2019/0078, No. 2020/0011).
The plaintiff did not dispute that he was physically present day to day in the cafe / restaurant in question, but claimed that it was simply a help to a friend.
However, the court held that the respondent’s daily presence in the cafe, in work clothes identical to that of the other employee, developing the menus of the day that he publishes on social networks, serving customers, taking the reservations, ensuring orders for drinks, working behind the counter and in the kitchen, far from constituting a simple accessory aid, prove, together the confession of X once confronted with the findings recorded in the investigation report regarding a daily presence to help his girlfriend in the coffee since October 2017, a bundle of relevant and conclusive evidence of a daily activity that makes the applicant unavailable for the job market.
