FINANCE - FUNDS

Teleworking

Financial firms in Lux need a new remote working policy



Financial institutions supervised by Luxembourg’s CSSF regulatory agency should be working on their post-covid teleworking rules right now, according to Audrey Bertolotti, counsel and head of employment at the law firm Linklaters in Luxembourg. Image credit: Linklaters picture/Maison Moderne illustration

Financial institutions supervised by Luxembourg’s CSSF regulatory agency should be working on their post-covid teleworking rules right now, according to Audrey Bertolotti, counsel and head of employment at the law firm Linklaters in Luxembourg. Image credit: Linklaters picture/Maison Moderne illustration

Financial sector firms domiciled in Luxembourg need to have a post-pandemic policy on teleworking. Audrey Bertolotti, a lawyer with the Linklaters law firm, outlines what is and what is not covered by the guidelines.

Earlier this year, Luxembourg’s Financial Sector Supervisory Commission (CSSF) issued circular 21/769, which provided guidance to financial sector firms on how to draft their post-pandemic teleworking policies. The rules will come into force as soon as covid-fighting health restrictions are lifted, meaning there is no exact date yet fixed, Bertolotti explained during an interview with Delano.

Aaron Grunwald: What is covered and what is not covered by the new CSSF guidelines?

Audrey BertolottiAudrey Bertolotti: Actually, the CSSF guidelines are additional to what already existed for teleworking. And the things that existed are also quite new. It’s a lot of new requirements to digest for companies, because it has to be read in conjunction with the new convention on teleworking that was issued in October last year, and also with the collective bargaining agreement applicable to the banking sector.

In the CSSF circular, you have everything that has to do with the organisation of teleworking in a financial institution, to ensure that even if the people are not in the premises, there’s always going to be business continuity. And what was important for CSSF was that even if people are teleworking, they should be able to come quickly to the premises in case there’s an emergency and that it has to be dealt with a physical presence in the premises.

So what we have [outlined] in the CSSF circular that we don’t have in the more global agreements on teleworking is ensuring business continuity by, in the [company’s] policy, determining who can telework, which categories or functions can actually telework, and which cannot, because the role is not suitable. For those who can telework, how many can telework at the same time, which departments can apply teleworking? In the key functions, how many people can telework at the same time, during which hours? So it goes more into details. And there’s a requirement for companies to be a lot more organised and precise in their policy than they could have been before.

Something that is adding difficulty is that this circular is actually also applicable to foreign branches of Luxembourg supervised entities. So what I’ve seen with clients in Luxembourg, who have a presence in Luxembourg, but they have branches, maybe in Italy, in Germany, in France, [is that] they have to make sure that CSSF requirements are also applied by the branches but making sure that it’s not breaking any rules in these local countries. And so for some of my clients, we actually had to liaise with many other counsels in other countries to make sure that what we prepared as Luxembourg lawyers was workable in other legal environments.

For example?

[At one client] we were working with a policy, and in some other countries, they said, ‘well, okay, you can have this policy, but all that is in this policy, you will need to implement in an addendum [in the work] agreements of the employees, because this policy will not be sufficient to be enforceable towards the employees.’ So it was more burdensome.

The first question is, ‘what are the others doing?’
Audrey Bertolotti

Audrey BertolottiCounsel and head of employmentLinklaters

If I understand correctly, the CSSF is not telling financial institutions who can telework and cannot telework. They are not saying, for example, a conducting officer cannot telework. They’re saying the financial institution must have a policy that defines if the conducting officer can telework or not. Is that correct?

That’s correct. They leave it up to the company to determine what roles are suitable for teleworking, what roles are not, and for those who are suitable, how to organise [it]. And the question that I get--because of how Luxembourg is structured, you don’t have so many people working in Luxembourg entities in many funds, for instance--so [I get asked] ‘if we only have two people, then how do we implement this?’ And it’s complicated to give a clear answer. Because if you have only one conducting officer, and one always has to be present, then he cannot telework. Or at least it needs to be workable. If it’s someone living close, who can show up really quickly, then it could be workable, but you have this bit of uncertainty around [it].

You also have an emphasis on ensuring business continuity, even working remotely. So really making sure that your IT system will still be operational, even if [your internet connection] is crashing, and having these reviewed every year, and based on the risks that you may have encountered, updating your policy. So it’s like an ongoing process of monitoring how it’s working in practice.

Also you have this provision in the circular that says that you need to have something in your policy that indicates how you’re going to monitor how employees are performing their work remotely. But, you know, we always have [to strike a] balance between monitoring employees in the workplace and not going too far, and taking into account data privacy [regulations] and CNPD [National Commission for Data Protection] requirements. And so, it’s kind of hard sometimes to put together.

What are some questions that your clients commonly ask?

So actually, the first question is, ‘what are the others doing? Have they implemented these requirements already?’ So many are still thinking about it, but haven’t had implemented the requirements yet. But they’re all aware of it, and thinking of how to do it.

[Other common questions include] ‘How do I determine key functions? And how when there’s only a few people in the company? What does the CSSF expect? How many people do they expect on site?’ And as we said, there’s no clear guidance.

I suppose it really depends on the company, but what do you think the CSSF expects in terms of key roles on site?

That really depends on every company. From what we’ve heard, they expect at least one or two key functions on site, one or two conducting officers, and at least someone who can intervene if there’s an IT crash.

What are some other common questions?

How many days per week or how many days in total do we entitle our people to telework? And usually at least for cross-border [workers], for the clients I’ve talked to, they all decided to go by the thresholds that are in the double tax treaty.

Meaning different thresholds for people who live in different countries?

Exactly.

And what about what about people who live in Luxembourg?

If you live in Luxembourg, they go for some more flexibility. Since they’re all working [on their policies], I haven’t seen the final answers. But the trend we see is two to three days a week. On a rolling basis, so [for example] it’s not always the same conducting officers on specific days.

How long do do financial companies have to publish their policies?

Actually, they were supposed to do it for 30 September. That was the date set in the policy, but it [stated] that this circular only applies in non-covid times and so then they issued, at the end of August, a communiqué de presse where they said that it was postponed since we’re still in a pandemic situation. And so there’s no fixed date. It will be when the pandemic is over that the policy will need to be in place.

But you would you would advise your clients to start working on this now and not wait?

Yes, exactly. Because it takes a bit of time to either draft, if they had nothing before, or to modify, and maybe have some discussions with staff delegations for the bigger ones.

Again, this does not apply right now. I mean, companies can still have their existing teleworking policy?

Yes, exactly.... they can still apply the working from home policy that they have in place.