Types of dismissal in Luxembourg in 2026: a complete overview (employer and employee)

What are the types of dismissal in Luxembourg?

Quick answer. Luxembourg law recognises several forms of termination at the employer's initiative: dismissal with notice based on genuine and serious grounds, dismissal with immediate effect for serious misconduct, dismissal on economic grounds, termination during the probationary period and collective dismissal.

Each type follows its own rules on form, grounds, notice and remedies. Confusing these regimes is a frequent source of errors, both for the employer, who risks an unfair dismissal, and for the employee, who lets short deadlines to act expire. The firm of Maître Cora Maglo supports both parties, as part of its employment law practice.

Dismissal with notice based on genuine and serious grounds

This is the ordinary route for termination by the employer. The dismissal must be based on genuine and serious grounds relating either to the employee's aptitude or conduct, or to the operational needs of the business.

The ground must be genuine (established, not invented) and serious (sufficiently serious to justify termination). A vague, disputed or disproportionate complaint weakens the decision. The dismissal letter and the procedure must be handled rigorously, as the slightest imprecision may lead to the dismissal being reclassified as an unfair dismissal.

Typical example. An employer blames an employee for repeated failings without being able to date or document them. Without precise and established grounds, the termination is likely to be held unfair before the Labour Tribunal.

Dismissal with immediate effect for serious misconduct

Dismissal with immediate effect allows the employer to terminate the contract without notice where the employee has committed serious misconduct, that is, conduct that makes continuing the working relationship immediately and definitively impossible.

This form of termination is demanding: the misconduct must be clearly established, the procedure swift and the grounds precise. An employer relying on serious misconduct must be able to prove it. Otherwise, the employee may have the dismissal held unfair and obtain compensation.

Typical example. An employee is dismissed with immediate effect for an isolated and old act. The facts can no longer be relied on more than one month after the day on which the employer became aware of them (art. L.124-10); the time elapsed and the lack of genuine seriousness may deprive the termination of its justification, giving rise to a right to redress.

Dismissal on economic grounds

Dismissal on economic grounds is linked not to the employee as a person but to the needs of the business: abolition of the post, reorganisation, lasting decline in activity or economic difficulties.

This ground, which falls under operational needs, must also be genuine and serious. The employer must be able to justify the economic reality relied on and the link with the abolition of the post. Where it concerns a significant number of employees over a given period, it switches to the collective dismissal regime.

Termination during the probationary period

During the probationary period, termination follows a specific scale that depends on the agreed length of the probationary period. For example, according to the ITM (update of 21 September 2026), the notice is 15 days for a probationary period of two or three months, 24 days for six months and one month for eight to twelve months. The first two weeks cannot in principle be subject to ordinary termination (except for serious misconduct).

This flexibility is not total: the probationary period must be validly stipulated in the employment contract, the notice is counted in calendar days and must end before the end of the probationary period. According to the ITM, a one-month probationary period remains a special case. A termination that occurs outside the probationary framework falls under the regime applicable after the probationary period. Official ITM table.

Collective dismissal and the social plan

Collective dismissal covers dismissals, for reasons not inherent in the employees as persons, of at least 7 employees over 30 days or 15 employees over 90 days (art. L.166-1). It is strictly regulated: informing and consulting the staff representatives, then negotiating a social plan (art. L.166-2).

The employment retention plan (plan de maintien dans l'emploi) (art. L.513-3) is a distinct instrument, negotiated in advance with the social partners to avoid dismissals: training, internal redeployment, temporary reduction of working time. Failure to comply with the collective dismissal procedure exposes the employer to sanctions and weakens the dismissals made. For employees, this phase is decisive for preserving their rights, hence the value of advice from the opening of the procedure.

Length of notice depending on length of service

Except in the case of serious misconduct, dismissal with notice requires compliance with a notice period whose length increases with the employee's length of service in the business.

The notice period is two months for less than five years of service, four months from five to less than ten years and six months from ten years (art. L.124-3); an employee who resigns observes half of these periods. The probationary period, for its part, follows its own period, which is shorter. The exact length of service should be checked before any notification, to avoid an irregular notice period.

Requesting the grounds for dismissal

In the case of dismissal with notice, the employee may ask the employer to state the grounds for the termination. This request is made by registered letter within one month of notification of the dismissal, and the employer must reply by registered letter within one month, stating the grounds precisely (art. L.124-5).

This step is decisive. An imprecise, late or missing reply may be enough for the dismissal to be characterised as unfair. The request for the grounds also affects the starting point of the deadlines to act, which makes it a step to be handled methodically and at the right time.

Unfair dismissal and remedies

A dismissal is unfair where it is not based on genuine and serious grounds or where the grounds are not validly provided within the deadline. Failure to comply with a formal rule is a distinct irregularity, sanctioned by compensation of at most one month's salary where the dismissal is justified on the merits (art. L.124-12).

The employee may then bring the matter before the Labour Tribunal to have the termination recognised as unfair and obtain redress. The challenge is subject to short deadlines, and failure to meet them results in forfeiture: once the deadline has passed, the right to act is lost. This point is developed in our dedicated analysis, contesting a dismissal and the deadline to meet, and on our unfair dismissal page.

Compensation linked to dismissal

Depending on the type of dismissal and length of service, several payments may come into play: compensation for notice not worked, severance pay linked to length of service for an employee who meets the conditions, and, where an unfair dismissal is established, damages compensating the loss suffered.

The amount depends on many parameters (length of service, remuneration, circumstances of the termination). As these factors are specific to each file, they must be quantified in light of the actual situation rather than on the basis of a single scale.

Termination by mutual agreement

The employer and the employee may also end the contract by mutual agreement, without any dismissal. This negotiated termination requires the free and informed consent of both parties and a written document clearly setting out the terms.

The agreement must be balanced and must not conceal a disguised dismissal intended to deprive the employee of their rights. An agreement drafted in haste may be called into question. It is prudent to have it reviewed before signing, in the interests of both parties.

Deadlines to act

Time is the main risk factor in dismissal matters. The request for the grounds, the challenge to an unfair dismissal and actions before the Labour Tribunal are subject to short deadlines.

As soon as the dismissal letter is received, you should keep all documents, note the dates and seek advice quickly. A solid file loses all value if the action is brought out of time. To assess your situation, you can request a quote.