Luxembourg's so-called 'tripartite' social model is based on an institutionalised and continuous trialogue between the government, employers and trade unions on important economic and social issues with a view to finding a consensus.
The 'Luxembourg model' was implemented in the 1970s, following the severe steel crisis that threatened to deeply shake foundations of Luxembourg society.
The Law of 26 July 1975 authorised the government to implement measures intended to prevent redundancies due to a slowdown in the economic cycle and ensure the maintenance of jobs. At the same time it created the Economic Committee in its 'Tripartite' composition, responsible, among others, for closely monitoring the evolution of the economic situation and making a report to the government once a month.
In 1977, due to the worsening problems in the steel sector, the government brought together a 'Tripartite Steel Conference', which developed an action plan for continued economic growth and full employment.
The Law of 24 December 24 institutionalised a 'Tripartite Coordination Committee' to be convened in case of a declining economic and social situation. The function of this committee is to build consensus on important socio-economic issues. A little more than a year later, in March 1979, the Tripartite Coordination Committee reached a first agreement on the restructuring and modernization of the steel industry. This first tripartite agreement manages to avoid the dismissal of several thousand steel workers - an undeniable success.
As a result of the Luxembourg Government's strong push for economic diversification, sectoral tripartites have been set up. Thus, the search for consensual solutions has entered in the customs.
And these days?
Nowadays, five institutions guarantee a permanent social dialogue: the Economic Committee, the Economic and Social Council, the Tripartite Coordination Committee, the Permanent Committee on Labour and Employment and the Tripartite Steel Conference.
Created in 1975, the Economic Committee's main mission is to ensure the maintenance of employment and to prevent unemployment due to cyclical causes. The Committee meets monthly and is made up of representatives of employee and employer organisations, as well as various ministries and administrations.
The Economic and Social Council
The Economic and Social Council ( Conseil économique et social, CES) is composed of employer, employee and government representatives. This consultative body organises support for national social dialogue and studies economic, social and financial problems affecting several economic sectors or the national economy as a whole. It advises on any legislative or regulatory measures and, in the first quarter of each year, prepares a report on the economic, social and financial development of the country.
Tripartite Coordination Committee
Since 1977, the Tripartite Coordinating Committee has brought together representatives of government, employers and labour. Its function is to reach consensus on important economic and social issues.
Tripartite Steel Conference
The Tripartite Steel Conference is a direct consequence of the crisis in the steel sector, the mainstay of the Luxembourg economy until the late 1980s. It is only relevant to the steel industry. Among other things, the negotiations at this conference have made it possible to avoid major redundancy problems.
Permanent Committee on Labour and Employment
The Permanent Committee on Labour and Employment, created by the law of 21 December 2007, is composed of representatives of trade unions, companies and the government. It meets whenever necessary but at least three times a year to examine the situation regarding employment and unemployment, working conditions and the safety and health of workers.