An employer in Luxembourg may dismiss employees either for personal reasons, such as poor performance, or for the needs of the business, such as a restructuring which eliminates jobs. An employer must give notice when terminating an employee on a permanent contract, unless the employee has engaged in serious misconduct, for which special procedures apply. The notice period is between two and six months. Severance must be paid to employees with at least five years of service. Severance is from one to 18 months of salary, depending on the employee's length of service and the size of the employer.
An employee on a fixed-term contract may not be terminated outside of the trial period except by mutual agreement, or in cases where there has been serious misconduct by the employee. An employee on a permanent contract in Luxembourg who wishes to quit must give notice to the employer, except in the case of serious misconduct by the employer, in which case no notice is required.