Proposal for a COUNCIL REGULATION (EC) on statistics on the level and structure of labour costs
Date: 1996-10-16
Institutions: European Commission
Subjects: labour force, pay policy, statistics, wage cost

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  16.10.1996 
COM(96)  475  final 

Proposal  for a 

COUNCIL REGULATION  (EC) 

on statistics  on the level and structure of labour costs 

(presented by the  Commission) 

EXPLANATORY  MEMORANDUM 

1. 

2. 

3. 

In order  to  carry  out  its  tasks  in the field of  economic  and  social  affairs,  particularly  with 
regard to employment and working conditions, the Commission needs to have at its disposal 
data on labour costs  and employees' earnings  in the  Community  providing  a valid  basis  for 
comparison  between  countries.  For  this  reason,  a  series  of  specific  Community  surveys  on 
labour costs in industry1, commerce, banking and insurance2 has been carried out  since  1960 
in pursuance of Council  Regulations.  These  surveys were  conducted  by the  Commission  of 
the  European  Communities  in  cooperation  with  the  National  Statistical  Services  in  the 
Member States. 

In line with the decisions taken at the Essen summit, the Member States have taken measures 
to  put in place various action programmes concerning in particular labour market  flexibility, 
job-creation and fighting unemployment. In order to set out more clearly the context in which 
these  policies  are  implemented  and  to  provide  the  means  for  a  follow-up  to  the  national 
employment  programmes,  the  Commission  departments  will  in  the  coming  years  have  the 
need to  have  statistical  information  available  on the  various  aspects  of  earnings  and labour 
costs. 

The  development  of  the  European  Community  and  the  operation  of  the  single  market 
increase the need for comparable data on the level,  trend and structure  of  employers' labour 
costs and employees' earnings, particularly as a means of analysing growth,  competitiveness, 
employment,  the  progress  of  economic  and  social  cohesion  and  for  establishing  reliable 
comparisons between the Member  States  and the regions  of the European Community.  The 
planned  statistics  will  therefore  provide  detailed  data  on  employers'  expenditure  on  wages, 
salaries and related contributions, as well as on hours worked and the total staff employed. 

Regulation No.  10 (OJ No. 56, 31.8.1960 p. 1199/60) 
Regulation No.  14 (OJNo.  55,16.8.1961 p. 154/61) 
Regulation No. 28 (OJ No. 41, 28.5.1962 p.1277/62) 
Regulation No.  151 (OJNo.  133, 13.12.1962 p.2841/62) 
Regulation No.  101/66/EEC(OJNo.  134, 22.7.1966,  p.2540/66) 
Regulation (EEC) No.  1899/68 (OJ No. L 289, 29.11.1968, p.4) 
Regulation (EEC) No. 2259/71  (OJNo. L 238, 23.10.1971, p.l) 
Regulation (EEC) No. 328/75 (OJ No. L 37,  12.2.1975,  p.l) 
Regulation (EEC) No. 494/78 (OJ No. L 68,  10.3.1978,  p.l) 
Regulation (EEC) No.  1596/81 (OJNo. L  159,17.6.1981,  p.l) 
Regulation (EEC) No. 3149/83 (OJ No 
Regulation (EEC) No.  1612/88 (OJ No 
Regulation (EEC) No. 3949/92 (OXNo 

L 309,  10.11.1983, p.2) 
L145,  11.6.1988, p.l) 
L 404, 31.12.1992, p.7) 

Régulation (EEC) No. 2053/69 (OJ No 
Regulation (EEC) No. 3192/73 (OJ No 
Regulation  (EEC) No. 494/78 (OJ No. : 
Regulation  (EEC) No.  1596/81 (OJ No, 
Regulation (EEC) No. 3149/83  (OJNo 
Regulation  (EEC) No.  1612/88  (OJNo 
Regulation  (EEC) No. 3949/92  (OJ No 

L 263, 21.10.1969, p.8) 
L 326, 27.11.1973, p.l) 
.68,  10.3.1978,  p.l) 
L  159,  17.6.1981,  p.l) 
L309,  10.11.1983, p.2) 
L  145, 11.6.1988,  p.l) 
L 404, 31.12.1992,  p.7) 

1 

J U U U U W W U W U U W U U U U U U U U l ^^ 

4. 

5. 

6. 

7. 

8. 

The comparative analysis of the level  and composition  of labour costs  in the Member  States 
requires that data be obtained on the basis of common definitions  and harmonised statistical 
methods.  These  conditions  are met by Community  statistics  on labour  costs,  which  to  date 
constitute the sole European source of statistics on wages and salaries providing a valid basis 
for  comparison.  This  is  why  the  results  published  by  Eurostat  are  valued  highly  by  the 
Commission  departments,  economic  and  social  decision  makers  and  researchers.  In  the 
drafting  of the Regulation it was taken into  account  that the European  System  of  National 
and Regional  Accounts in the European Community  (ES A-95)3  is the term of reference  for 
standards,  definitions  and accounting  practices  in the  Member  States  in  order  to  meet  the 
Community needs. 

The Commission's activities in various domains require up-to-date figures on wage and salary 
costs.  Eurostat,  in  cooperation  with  the  competent  authorities  in  the  Member  States,  has 
worked out methods of updating the main results of the statistics on labour costs. However, 
since  enterprises'  expenditure  on  wages,  salaries  and  related  employers'  contributions  is 
subject to substantial change, such updating can only furnish valid results in the years directly 
following  the  production  of  the  statistics; thereafter,  new  Community  statistics  need  to  be 
produced in order to bring up to date the results of the  1992 survey. 

In the course of the Council discussion on the Regulation relating to the  1984 survey,  it was 
decided  to  set  the  interval  between  surveys  at  four  years,  so  that  the  subsequent  statistics 
were produced with reference  to  1988 and  1992. It is necessary to  maintain this periodicity 
and to produce the next statistics with reference to  1996. 

In  keeping  with  the  principle  of  subsidiarity,  responsibility  for  the  overall  planning  of  the 
statistics  on  labour  costs  at EU  level  is  shared between  the  Commission  and  the  Member 
States, in order to achieve harmonisation of concepts and classifications  in the data collected, 
and to  identify  the information  required  by the principal  users,  i.e.  Community  institutions, 
national  governments,  regional  and local  authorities,  international  organisations,  employers' 
associations,  trade  unions  and  research  bodies.  The  actual  collection  of  data  and  the 
implementation of methods used to do this are the responsibility of the Member States. 

The statistics shall cover all economic activities defined in sections C (Mining and quarrying), 
D  (Manufacturing),  E  (Electricity,  gas  and water  supply),  F  (Construction),  G  (Wholesale 
and retail trade; repair of motor vehicles, motorcycles and personal and household goods), H 
(Hotels and restaurants), group 63.3 (Activities of travel agencies and tour operators; tourist 
assistance  activities  not  elsewhere  covered)  of  section  I  (Transport,  storage  and 
communications),  divisions  65  (Financial  intermediation,  except  insurance  and  pension 
funding)  and  66  (Insurance  and  pension  funding,  except  compulsory  social  security)  of 
section J (Financial intermediation) and section K (Real estate, renting and business activities) 
of  the  Classification  of  Economic  Activities  in  the  European  Community  (NACE  Rev. 1) 
established by Regulation.(EEC) No  3037/90 (4), subject to the special provisions  mentioned 
in the Annex to the Regulation. 

(3) Regulation No xxxx/96/EEC OJ No Lxxx, XX.XX. 1996, p. x 
(4)OJNoL293,24.10.1990,p. 1. Regulation as amended by Regulation (EEC) No 761/93 of24 March 1993,  OJNo 
L83, 03.04.1993, p. 1. 

9. 

10. 

11. 

It  is  not  intended  that  all businesses  be  covered  as  part  of  an exhaustive  survey,  but rather 
that  a  representative  sample  be  taken.  Accordingly,  in  countries  with  sufficient  sources  of 
statistical  data,  especially  data gathered  by public  authorities,  it  will  be  acceptable  for  such 
data to be used (or possibly set out in a simplified form on questionnaires),  provided that this 
approach  is  compatible  with  the  definitions  and  methodology  being  used  and  meets  all 
requirements  concerning  variables.  On the  same  condition,  Member  States  are  allowed  to 
estimate  necessary  data  using  statistical  inference  methods  where  some  or  all  of  the 
characteristics  have  not  been  observed  for  all  the  units  for  which  the  statistics  are  to  be 
compiled. 

The  specific  situation  of  small  and  medium  sized  firms  is  taken  into  account  in  the 
Regulation. The burden on enterprises, particularly on small and medium sized entrprises, and 
representativeness  requirements  shall  be  taken  into  account  by  the  Member  States  in their 
choice and combination of the sources and the use of estimations. 

The group  of  experts  on Earnings  and Labour  Costs  Statistics  has  emphasised  the  need  to 
establish  a  legal  instrument  for  these  statistics  as  soon  as  possible,  so  that  the  competent 
authorities in the Member States,  as well  as the businesses to be included in the  sample, can 
take the appropriate measures to organise and carry out successfully the exercise. 

12. 

To  this  end,  the  Commission  submits the  attached  draft Regulation  for  the  approval  of  the 
Council. 

Mr 

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PROPOSAL FOR A COUNCIL REGULATION (EC) 

on statistics  on the level and structure of labour costs 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard to the Treaty  establishing  the European  Community,  and  in  particular  Article 
213  thereof, 

Having regard to the proposal submitted by the Commission, 

Whereas,  in  order  to  carry  out  the  tasks  assigned  to  it,  the  European  Union  must  be  kept 
informed  of the  level, trend and structure of employers' labour costs  and  employees'  earnings 
in the Member States; 

Whereas the development  of the European Community and the operation  of the  single  market 
increase  the need  for  comparable  data on the  level,  trend  and  structure  of  employers'  labour 
costs  and  employees' earnings,  particularly  as a means  of  analysing  growth,  competitiveness, 
employment,  the  progress  of  economic  and  social  cohesion  and  for  establishing  reliable 
comparisons between the Member  States and the regions of the European  Community; 

Whereas the best method  of assessing the  situation as regards the level, trend  and  structure  of 
employers'  labour  costs  and  employees'  earnings  is  to  produce  specific  statistics  on  labour 
costs,  as was most recently done in  1993 pursuant  to Regulation No  3949/92/EEC<1)  referring 
to accounting data of 1992; 

Whereas,  because  of  the  variations  in  the  position  and  composition  of  expenditure  by 
enterprises  on wages  and  related  employers'  contributions,  new  community  statistics  need  to 
be produced  based  on accounting  data for  1996 in order  to bring up to  date the  results  of the 
previous survey; 

Whereas,  pursuant  to  Regulation  No  xxxx/96/EC(2)  the  European  System  of  National  and 
Regional  Accounts  in  the  European  Community  (ESA-95)  is  the  term  of  reference  for 
standards,  definitions  and  accounting  practices  in  the  Member  States  in  order  to  meet  the 
Community  needs;  whereas  this  necessitates  the  establishment  of  complete,  reliable  and 
comparable  statistical  sources at national and regional level; 

Whereas  the  statistical  information  available  in  each  Member  State  does  not  provide  a  valid 
basis  for  comparisons,  in  particular  because  of the  differences  between  laws,  regulations  and 
administrative  practices  of  the  Member  States,  and  whereas  Community  statistics  must 
therefore  be  produced  and  the  results  processed  on  the  basis  of  common  definitions  and 
harmonised  methodologies; 

Whereas,  in  accordance  with  the  principle  of  subsidiarity,  the  creation  of  common  statistical 
standards  enabling  harmonised  information  to  be  produced  is  action  which  can  only  be 
effectively  undertaken  at  Community  level;  whereas  these  standards  will  be  implemented  in 

(1) OJ No L404, 31.12.1992, p. 1 
(2) OJ No Lxxx, xx.xx.1996, p. x 

each  Member  State  on  the  authority  of  the  agencies  and  institutions  appointed  to  compile 
official  statistics; 

Whereas, pursuant  to Decision No  93/464/EEC(3), the  production  of Community  statistics on 
labour costs is one of the priority actions of the Statistical Programme  1993 to  1997; 

Whereas  it  may  be  acceptable  for  the  countries  which  have  administrative  sources  or  other 
appropriate  statistical  sources  to  use  these  or  perhaps  link  them  up  with  a  simplified 
questionnaire  if  this  method  is  compatible  with  the  definitions  and  methods  approved  and 
corresponds to the whole set of variables required; 

Whereas  it  is  necessary  to  simplify  the  administrative  procedures  for  enterprises,  particularly 
smaller  enterprises,  including  the  promotion  of  new  technologies  for  data  collection  and 
compilation;  Whereas  it  may  still  be  necessary  to  collect  directly  from  businesses  the  data 
necessary to  compile labour  cost  statistics,  using methods that  are  exhaustive,  reliable  and  up 
to date, without giving rise for the parties concerned,  in particular for  small and  medium-sized 
businesses,  to  a burden  out  of  proportion  to  the  results  which  the  users  of the  said  statistics 
can reasonably  expect; 

Whereas it seems appropriate to make provisions for  exceptions  for  certain Member  States, in 
order  to  take  account  of  particular  technical  difficulties  encountered  by  such  States  on  the 
collection  of  certain  types  of  information,  provided  that  the  quality  of  the  statistical 
information  is not  affected; 

Whereas  the  Statistical Programme  Committee  established by  Council  Decision  89/382/EEC, 
Euratom(4),  consulted  by  the  Commission  in  accordance  with  article  3  of  the  aforesaid 
Decision, has declared itself in favour  of the present proposal, 

HAS ADOPTED THIS REGULATION: 

(3) OJ No L 219, 28.08.1993, p. 1 
(4) OJ N0LI8I, 28.06.1989, p. 47 

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Article 1 

General  provisions 

The Member States and the Commission, within their respective fields of  competencies,  shall 
produce Community statistics on the level and structure of employers' labour  costs  in the  area 
of economic activities defined in Article 3. 

Article 2 

Reference  period 

The statistics  shall be produced  on the basis of statistical  information  for  the financial year  of 
1996, subject to the special provisions mentioned in the Annex to this Regulation. 

Article 3 

Scope 

The statistics shall cover all economic activities defined  in sections  C  (Mining  and  quarrying), 
D  (Manufacturing), E (Electricity, gas and water supply), F  (Construction),  G (Wholesale  and 
retail  trade;  repair  of  motor  vehicles,  motorcycles  and  personal  and  household  goods),  H 
(Hotels  and  restaurants),  group  63.3  (Activities  of travel  agencies  and  tour  operators;  tourist 
assistance  activities  not  elsewhere  covered)  of  section 
storage  and 
communications),  divisions  65  (Financial  intermediation,  except  insurance  and  pension 
funding)  and 66 (Insurance and pension funding,  except  compulsory  social  security)  of  section 
J  (Financial  intermediation)  and  section  K  (Real  estate,  renting  and  business  activities)  of  the 
Classification  of Economic  Activities  in the  European  Community,  hereinafter  referred  to  as 
"NACE  Rev.l"  established  by  Regulation  (EEC)  No  3037/90  (5),  subject  to  the  special 
provisions mentioned in the Annex to this Regulation. 

(Transport, 

I 

Article 4 

Information  requirements 

The  compilation  of  statistics  on  labour  costs  shall  be  based  on  any  of  the  statistical  units 
defined  in the Regulation (EEC) No  696/93  (6) and shall provide information  referring  to local 
units classified  by their own principal activity, by region at least at level  1 of the Nomenclature 
of Territorial Units for  Statistics (NUTS  1), established  by the  Commission  (Eurostat),  and by 

(5)OJNoL293, 24.10.1990, p. 1. Regulation as amended by Regulation (EEC) No 761/93 of 24 March  1993 
OJ No L83, 03.04.1993, p. 1. 
(6) OJ No L76, 30.03.1993, p.  1 

size class in terms  of employment  of the  enterprise  on which the  local  units  are  dependent. 
Information is required only for enterprises with at least 10 persons occupied. 

Article 5 

Characteristics of the required information 

Data shall be collected on: 

1.  total labour costs, including:  direct  remuneration;  bonuses  and  allowances; payments  for 
days  not  worked;  severance  pay;  benefits  in  kind;  all  incidental  expenditure,  including 
employers'  statutory  and  customary  contributions  to  social  security  and  direct  social 
benefits; vocational training costs; other expenditure  and  any taxes  and  subsidies  directly 
related to labour costs; 

2.  the total staff employed and 

3.  working time, 

subject to the special provisions mentioned in the Annex to this Regulation. 

Article 6 

Data collection 

1.  A survey  shall be carried  out through the  appropriate  statistical  services  of the Member 

States which shall draw up the appropriate methods for collecting the information. 

2.  Employers and other persons  required  to  supply information  shall reply  to  the  questions 
truthfiilly,  completely  and  within  the  time  limits  set.  The  Member  States  shall  take 
appropriate measures to avoid any infringement  of the obligation to supply the information 
referred to in Article 5. 

3.  The  survey  need  not  be  carried  out  if the  Member  States  have  information  from  other 
appropriate  sources  or  Member  States  are  able to  produce  estimates  of  necessary  data 
using statistical inference  methods where some or all of the characteristics  have not been 
observed for all the units for which the statistics are to be compiled. The information  from 
other appropriate sources or the estimates of necessary data can only be used if they are at 
least equivalent to survey requirements as regards accuracy, quality and timeliness. 

4.  The  burden  on  enterprises,  particularly  on  small  and  medium-sized  enterprises,  and 
representativeness  requirements  according to  Article 7  shall be taken  into  account  by the 
Member  States in their choice and combination  of the sources  and  the use of estimations 
mentioned in paragraph 3. 

?f 

5.  The  Member  States  shall  transmit  to  the  Commission  (Eurostat)  at  its  request  all 
information,  particularly  concerning  methodologies,  needed  for  the  application  of  this 
Regulation. 

Article 7 

Representativeness 

The reliability and comparability  on a high quality level  shall be attained by the use of sample 
sizes allowing that the relative standard error for the variable "hourly labour costs" by division 
of NACE Rev. 1 does not exceed 3  %. 

Article  8 

Processing of results 

The statistical services of the Member States shall process the replies to the questions referred 
to in Article 6(2) or the information from other sources, as referred to in Article 6(3),  so as to 
obtain comparable results. 

Article  9 

Transmission  of results 

The results shall be transmitted within a period of  18 months from the end of the calendar year 
corresponding  to  the  reference  period,  including  data  declared  confidential  by  the  Member 
States  pursuant  to  domestic  legislation  or  practice  concerning  statistical  confidentiality,  in 
accordance  with  the  provisions  of  Regulation  (Euratom,  EEC)  No  1588/90  (7)  on  the 
transmission  of  data  subject  to  statistical  confidentiality  to  the  Statistical  Office  of  the 
European Communities. 

Article  10 

Arrangements for  implementation 

The arrangements for implementing the present regulation, in particular: 

definitions to be used, 
the levels of breakdown to be applied to the variables, 
guidelines on accuracy and the aspects of quality, 
the appropriate forms of the transmitted variables and 
the results to be transmitted 

shall be laid down in accordance with the procedure set out in Article  11. 

(7) OJ No L151, 15.06.1990, p. 1 

9 

Article 11 

Procedure 

The Commission shall be assisted by the  Statistical Programme Committee  set  up by Council 
Decision No  89/382/EEC, Euratom (8), hereinafter referred to as "the Committee". 

The representative of the Commission shall submit to the Committee a draft of the measures to 
be taken.  The  Committee  shall  deliver  its  opinion  on the  draft  within  a time  limit  which  the 
Chairman may lay down according to the urgency of the matter. The opinion shall be delivered 
by the  majority  laid  down  in Article  148(2)  of the Treaty  in the  case  of  decisions  which  the 
Council  is  required  to  adopt  on  a  proposal  from  the  Commission.  The  votes  of  the 
representatives  of the Member  States within the  Committee  shall  be weighted  in the  manner 
set out in that Article. The Chairman shall not vote. 

The  Commission  shall  adopt  measures  which  shall  apply  immediately.  However,  if  these 
measures  are  not  in  accordance  with  the  opinion  of  the  Committee,  they  shall  be 
communicated  by the  Commission  to  the  Council  forthwith.  In that  event,  the  Commission 
shall defer application of the measures which it has decided for a period of three months  from 
the date of communication. 

The Council,  acting by a qualified  majority,  may take a different  decision within the time limit 
referred to in the previous paragraph. 

Article 12 

Entry  in force 

This Regulation shall enter into force  on the twentieth day after its publication in the Official 
Journal of the European Communities. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 

The President 

(8) OJ No L181, 28.06.1989, p. 47 

10 

ANNEX 

SPECIAL PROVISIONS 

I.  Exceptions to the reference period (Article 2) 

For Sweden: the financial year 1997 on the condition of providing estimates for the 
reference year 1996. 

n.  Exceptions to the scope of the survey (Article 3) 

1.  For all the Member States: class 65.11. 

2.  For Germany, section K, group 63.3 of section I. 

3.  For Greece: section K. 

4.  For France: division 73 of section K. 

5.  For Ireland: section H. 

6.  For Austria: sections F, G, H, class 63.3 of section I. 

7.  For Portugal: section K. 

IH.  More detailed information (Article 5) 

Member States may provide for the supply of more detailed information,  notably by 
making a distinction between manual and non-manual workers or by covering units with 
fewer than 10 employees. 

In order to take account of the particular circumstances regarding the aggregation of the 
results  at national  level,  provided  that  the  quality  of  the  statistical  information  is  not 
affected,  Germany may compile distinct  statistics for  the Federal Republic of Germany, 
including West Berlin, as constituted  prior to 3 October  1990, and for  the new Lander, 
including East Berlin. The provisions of Article 7 on representativeness  shall be applied 
separately on each aggregate. 

ii 

FINANCIAL STATEMENT NO 1 

1. 

TITLE OF THE ACTION 

Draft Council Regulation on statistics on the level and structure of labour costs 

2. 

BUDGET LINES INVOLVED 

Line B5-6000 

3. 

LEGAL BASIS 

Article 213 of the Treaty 

4. 

DESCRIPTION OF THE ACTION 

4.1  General purpose of the action 

The  purpose  of  the  present  Council  Regulation  is  to  make  Community 
statistics on the level and structure of labour costs in the European Union 
available to all users. These data are essential for defining,  monitoring and 
assessing  economic,  social  and  labour  market  policies  at  the  regional, 
national and Community levels. A  series  of  specific  Community  surveys 
on labour costs in industry,  commerce,  banking  and  insurance  has been 
carried out since 1959 in pursuance of Council Regulations. 

Conducting  this  survey  at  European  Union  level  is  one  of  the  priority 
projects  of  the  1993-1997  framework  statistical  programme  of  the 
Community (OJL 219, 28.8.1993). 

4.2 

Period covered by the action and procedures for  renewing or extending it 

Once  only  action  in  accordance  with  the  draft  Council  Regulation 
(Euratom, EEC) on statistics concerning the level and  structure  of labour 
costs (collection  and  processing  of data  and  forwarding  of the  results  to 
Eurostat) covering the period 1997-1999. 

13L 

nnniwTwnnxn 

5. 

CLASSIFICATION  OF  EXPENDITURE/INCOME 

5.1.  Non-compulsory expenditure 

5.2.  Differentiated  appropriations 

5.3. 

Type of income envisaged 

Sales of statistical products (database data and publications)  cover some  of 
the production costs. 

6. 

TYPE OF  EXPENDITURE/INCOME 

The  Commission's  contribution  to  Member  States'  expenditure  represents  only 
part  of  the  real  cost  of  collecting  data - of  the  order  of  26%  -  since  the 
Commission's  statistical  work  is  devolved  to  a  large  extent,  the  operating  and 
administrative  costs  being  borne  almost  exclusively  by  the  national  governments. 
Nevertheless, the expenditure envisaged  is essential to  promote  standardization  of 
the data collected, and for these data to be processed  and sent to Eurostat. 

Cofinancing  by  the  public  sector  (out  of  the  budgets  of  the  national  statistical 
offices)  and the private sector (income from sales of statistical products). 

7. 

FINANCIAL  EFFECT  ON 
(PART B OF THE  BUDGET) 

INTERVENTION  APPROPRIATIONS 

7.1  Method of calculating the total cost of the action (definition of unit costs) 

The  amount  to  be  taken  from  the  Community  budget  for  the  project  to 
extend  the  existing  systems  for  collecting  data  or  setting  up  new  surveys 
on labour costs is calculated  as follows: 

26%  of  the-  operating  costs  for  the  two/three  years  of  the  project: 
conducting 
to  Eurostat 
(1998/1999). 

the  survey  (1997)  and  sending 

the  data 

Type  of  expenditure  to  be  borne  by  the  Member  States:  production  of 
questionnaires,  contribution  to  the  costs  of  collecting,  processing,  and 
disseminating the data and other operating costs. 

The total  action  represents  an  average  expenditure  of  approximately  ECU 
7,2 million for  all the Member  States. 

Total  contribution  to the Member  States (26% of total) (ECU  1,872  million) 

L2> 

7.2.  Breakdown of cost of action (MIO ECUs) 

Member  State 
Total 

1997 
1.872 
1.872 

1998 

1999 

7.3.  Operational costs of studies, experts, etc.  included in part  B of the budget 

(MIO ECUs) 

of 

and 

Meetings 
experts 
Information 
publication 
Total 

1997 
.05 

.05 

1998 
.05 

.05 

.1 

1999 
.05 

.05 

.1 

7.4. 

Indicative timetable for  commitment and payment  appropriations 

Total 
1.872 
1.872 

Total 
.15 

.1 

.25 

The  survey  will  be  conducted  in  1997  and  the  results  sent  to  Eurostat  in 
1998/1999.  It  is proposed  that  payment  be  made  in three  phases:  the first 
two tranches as a contribution to the cost  of collecting  and  processing  the 
data  (1997)  and  a third  tranche  once  the  results  have  been  received.  The 
last  tranche will be  payable in either  1998  or  1999  depending  on  whether 
the data are sent to Eurostat in  1998 or  1999. 

C.A. 

P.A 

1997 
ECU  1,872  million 

1998 

1999 

ECU 0,561 million 
3 0% 

ECU 0,750  million 
4 0% 

ECU 0,561  million 
3 0% 

Total 
ECU  1,872  million 

ECU  1,872  million 

8. 

ANTI-FRAUD  PROVISIONS  (AND  RESULTS  OF  IMPLEMENTING 
THEM) 

Payment  for  the  contracts  and  agreements  concluded  by  the  Commission  is 
made only on the basis of detailed  reports  on the completion  of the  operations 
concerned or the results obtained. 

H 

COST/EFFTCDENCY ANALYSIS  ITEMS 

9.1.  Specific and quantifiable objectives,  target  population 

The  purpose  of  this  Council  Regulation  is  to  establish  comparable 
statistics  on  the  level  and  structure  of  employers'  labour  costs  in  the 
European  Union.  Following  the  guidelines  in  the  White  Paper  on 
Growth,  Competitiveness  and Employment,  and  the  conclusions  of  the 
Essen  Summit,  these  statistics  are  indispensable  for  establishing, 
monitoring  and  assessing  regional,  national  and  Community  policies, 
particularly  as  a  means  of  analysing  growth,  competitiveness, 
employment,  the  progress  of  economic  and  social  cohesion  and  for 
establishing  reliable  comparisons  between  the  Member  States  and  the 
regions of the European Community. 

9.2.  Grounds for  the action 

The  responsibility  for financing this  action  rests  mainly  on  the  Member 
States  (cf.  6  above),  which  have  a  well-established  structure  for 
collecting and processing  data. Nevertheless,  funds from the Community 
budget  appear  to  be  necessary,  both  for  countries  which  are  going  to 
carry out this type of survey for the first time,  and for those which must 
adjust  existing  surveys  to  Community  -needs.  The  purpose  of  this 
financial  contribution is to  co-finance  part of the costs  of collecting  and 
processing data. 

The purpose of this action is to achieve four results, viz.: 

-  to  provide  the  Community  Institutions  with  the  quantitative  data  for 
drawing  up,  monitoring  and  evaluating  any  programme  of  action 
pursuant  to  Article  3  (2)  of  the  Financial  Regulation:  "it  therefore 
contributes  to  more  effective  and  relevant  use  of  the  Community 
budget"; 

-  to  provide  the  national  governments  with  comparable  statistics  on all 
the  Member  States  for  evaluating  and  monitoring  the  progress  of 
Community policies; 

-  to  provide  political,  economic  and  social  decision-makers  in  the 
Community  with  the  data  necessary  to  take  and  assess  decisions  in 
their respective fields of action: it is therefore a key component  of the 
European information market; 

-  to  provide the scientific  community with the  information  necessary  to 
further study and obtain more information  on economic  and social  life 
in the Community. 

\S 

The  results  of  the  action  will  contribute  to  improving  the  statistical 
information used in the work linked to  social policy,  economic  cohesion 
and convergence in the internal market. 

Statistical  information  is  collected  using  a  system  largely  based  on  the 
principle  of  subsidiarity, 
in  which  the  national  systems  have  a 
responsibility  as regards each Member  State.  The Community  Statistical 
Programme  will  become  an  integral  part  of  the  national  statistical 
programmes, thus contributing to creating a European statistical area. 

The potential  of  multiplier  effects  is fairly  small.  Nevertheless,  the  data 
concerned  by  the  draft  regulation  will  be  of  increased  interest  in  that 
users will  have  access  to  a set  of  data which will  enable  them  to  make 
international comparisons of labour costs. 

The  specific  results  of  the  action  could  be  affected  if  some  of  the 
Member  States  -  or the  Commission  -  did  not  succeed  in  releasing  the 
resources needed for the action to succeed. 

9.3.  Monitoring and assessing the action 

The action forms part of the Community Statistical Programme, which is 
monitored  continuously  by  means  of  a  general  table  which  determines 
the  objectives  and resources  required  for  each  project  as  a function  of 
the objective/performance ratio. At the beginning  of each year, Eurostat 
produces  a  progress  report  on  the  programme  as  at  the  end  of  the 
previous year. It comprises three parts as follows: 

the first summarizes the main achievements of the year in respect of each 
policy; 
the  second  describes  the  objective  of  each  project  and  the  results 
achieved; 
the third gives  statistics  on the use  of  human,  budgetary,  computer and 
administrative resources in the course of the previous year. 

(4, 

*  ^«*WOWWCS««7*>' 

10. 

ADMINISTRATIVE  EXPENDITURE  (PART A OF THE SECTION  HI 
OF THE GENERAL  BUDGET) 

10.1.  Effect on number of  staff? 

Type of 
staff 

Staff to be 
Permanent 

allocated 
Temporary 

A 
B 
C 

Permanent 
staff  or 
temporary 
agents 
Other 
resources 
Total 

.5 
.5 
0 

1 

0 
0 
0 

0 

0 

of which 

By using 
resources 
present  in 
the DG or 
service 
concerned 
.5 
.5 
0 

0 

1 

duration 

By using 
additional 
sources 

1997-98 

0 
0 
0 

0 

0 

10.2.  Overall  financial  impact  of additional  human  resources 

Amount 

Method of calculation 

(ECU) 

Permanent staff 
Temporary agents 
Other resources 

Total 

10.3.  Impact  on other operational  costs 

Budget-line 

Amount 

Method of calculation 

(ECU) 

Total 

O 

IMPACT ASSESSMENT FORM 

THE IMPACT OF THE PROPOSAL ON BUSINESS, WITH SPECIAL 
REFERENCE TO SMALL AND MEDIUM-SIZED ENTERPRISES 

TITLE  OF THE PROPOSAL:  DRAFT  COUNCIL  REGULATION  ON STATISTICS  ON THE  LEVEL  AND 
STRUCTURE  OF  LABOUR  COSTS  IN  INDUSTRY  AND  THE  SERVICES 
SECTOR 

THE PROPOSAL: 

Taking  account  of  the  principle  of  subsidiarity,  why  is  Community  legislation 
necessary in this area and what are its main aims? 

In order to  carry out  its tasks in the field of economic and  social  affairs,  particularly  with 
regard to employment and working conditions, the Commission needs to have at its disposal 
comparable information  on the level and structure of labour costs in the Member  States of 
the EU.  This  need  has become  more  pressing  because  of the  new  policies  set  out  in the 
White Paper on Growth, Competitiveness and Employment. 

Labour cost data are indispensable for defining and assessing the effect  of social policies and 
measures on the labour market at both national and community level. 

The statistical  information  available in the Member  States  is  an inadequate  basis  for  valid 
comparisons,  for  reasons which  include,  in particular,  the  differences  in the  nature  of the 
surveys and the existing data sources, legal systems and administrative practices. In keeping 
with the principle of subsidiarity,  responsibility for  the overall  planning of the  statistics on 
labour costs at EU level is shared between the Commission and the Member States. The aim 
is  to  achieve  comparability  of  the  data,  through  a  common  definition  of  concepts  and 
classifications,  and  to  identify  the  information  required  by  the  principal  users,  i.e. 
Community institutions, national governments,  regional  and  local  authorities,  international 
organisations,  employers'  associations,  trade  unions  and  research  bodies.  This  has  to  be 
done without  attempting to harmonise the Member  States' arrangements  for  the collection 
of data. The actual collection of data and the methods used to do this are the responsibility 
of the Member States. 

(% 

THE IMPACT ON BUSINESS: 

2 

Who will be affected  by the proposal? 

-  which sectors of business 

The  statistics  will  cover  businesses 
in  sections  C  (Mining  and  quarrying),  D 
(Manufacturing), E  (Electricity, gas and water supply), F  (Construction),  G (Wholesale  and 
retail  trade; repair  of  motor  vehicles,  motorcycles  and  personal  and  household  goods),  H 
(Hotels  and  restaurants),  group  63.3  (Activities  of  travel  agencies  and  tour  operators; 
tourist  assistance  activities  not  elsewhere  covered)  of  section  I  (Transport,  storage  and 
communications),  divisions  65  (Financial  intermediation,  except  insurance  and  pension 
funding)  and  66  (Insurance  and  pension  funding,  except  compulsory  social  security)  of 
section  J  (Financial  intermediation)  and  section  K  (Real  estate,  renting  and  business 
activities) of the Classification  of Economic  Activities in the European  Community  (NACE 
Rev. 1), subject to the special provisions mentioned  in the Annex to this Regulation. 

-  which sizes of business  (what is the concentration  of small and medium-sized  firms) 

The survey will not include enterprises with less than  10 employees.  Information  is required 
only for  enterprises with at least  10 persons  occupied. 

It is intended that results be obtained for various sizes of business. 

To reduce the burdens on businesses and National  Statistical Institutes  , the statistics will be 
carried  out by sampling. The  sampling plans will be  drawn up by the NSIs,  which  generally 
use different  sampling ratios depending on the size of the statistical units to be used.  A large 
proportion  of  the  information  requested  on  the  questionnaires  is  available  in  businesses' 
administrative  files,  which  means  that  the  inconvenience  will  not  be  great.  Likewise,  the 
registers of businesses/local units also contain some of the information  required. 

In Member  States using to  different  extents  existing  data  sources,  the burden  on  businesses 
will  be  considerably  less  because  some  variables  will  be  derived  from  these  sources.  The 
regulation  states  that  the  survey  need  not  be  carried  out  if  the  Member  States  have 
information  from  other  appropriate  sources which is at least equivalent  as regards  accuracy, 
quality  and  timeliness.  On  the  same  condition,  Member  States  are  allowed  to  estimate 
necessary  data  using  statistical  inference  methods  where  some  or  all  of  the  characteristics 
have not been observed  for  all the units for which the statistics are to be compiled. 

Even if all the information  needed  has to  be  obtained  from  the  enterprises,  the  workload  is 
kept  within  reasonable  bounds  by  limiting  the  list  of  variables  to  a  selection  of  easily-
calculated  annual aggregates. 

-  are  there particular  geographical  areas  of  the  Community  where  these  businesses  are 

found? 

In principle,  businesses  are  located  in all Regions  and  Member  States.  However,  small  and 
medium-sized  enterprises  predominate in certain areas of the EU.  In order  to  draw  up  more 
detailled tables on labour costs at regional level, some data are requested  at NUTS  1 level. 

What will business  have to do to comply with  the  proposal? 

The  units  which  are  to  be  included  in  the  surveys  will  be  called  on  to  give  accurate  and 
complete  information  on  the  questionnaires  which  will  have  been  sent  to  them  by  their 
national statistical offices  (and to return the questionnaires within the given deadline). 

However,  in the Member  States which will use to  different  extents existing data  sources  the 
extra effort  required of businesses will be considerably  reduced. 

What  economic effects  is the proposal  likely to  have? 

The  proposal  obviously  implies  some  expenditure  in  the  data  collection,  for  the  national 
statistical  offices  and  the  enterprises  sampled.  However  these  costs  are  far  outweighed  by 
the positive effects  : 

-  on employment 
-  on investment and the creation of new businesses 
-  on the competitive position  of businesses 

Timely,  accurate  and  comparable  data  on  the  level  and  structure  of  labour  costs  are 
necessary  for  implementing  and  assessing  economic,  social  and  business  policies.  In  this 
respect,  the  proposed  statistics  will  allow  a  better  understanding  of  the  situation  of 
employment  and  the  fight  against  unemployment  and  will  have  beneficial  effects  on 
investment  and  competitiveness.  The  access to  reliable,  up-to-date  data  provided  to  those 
responsible  for  economic  and  social-policy  decisions  will  enable  them  to  better  appreciate 
the  socio-economic  conditions  in  which  they  have  to  work,  and  will  allow  employers  to 
define general business policies more clearly. 

The  importance  of  the  Community  measures  which  would  benefit  in  terms  of  both 
implementation  and  follow-up  from  the  availability  of  up-to-date  statistics  on  labour  costs 
would indicate that the resulting benefits will more than justify  the costs involved. 

Does  the  proposal  contain  measures  to  take  account  of  the  specific  situation  of  small 
and  medium-sized  firms? 

Yes.  In  order  to  reduce the  number  of units to  be  covered  by  the  survey,  enterprises  with 
fewer  than  10 employees will not fall within its scope. Furthermore,  the percentage  of small 
and  medium-sized  enterprises  included  in  the  survey  is  generally  much  lower  than  that  of 
large  enterprises  because  of  the  sampling  methods  used  at  national  level.  Finally,  the 
considerata  and  article  6.4  of  the  draft  Regulation  take  account  explicitly  of  the  specific 
situation  of small and  medium-sized firms. The burden  on  enterprises,  particularly  on  small 
and  medium-sized  enterprises,  and  representativeness  requirements  shall  be  taken  into 
account by the Member States in their choice and combination  of the sources  and  the use of 
estimations foreseen  on the Regulation. 

lo 

Consultation 

The Union of Industrial and Employers' Confederations  of Europe (UNICE) took  part from 
the outset in meetings organised by the  "Earnings Statistics" working  party throughout  the 
phase during which the proposal  was  being  formulated.  Given the importance  (which  was 
mentioned  several  times)  to  employers'  associations  of  information  on  the  level  and 
structure  of  labour  costs,  the  representatives  of  this  organisation  made  an  active 
contribution to defining the nature of the survey. 

The European Trade Union Confederation (ETUC) also supports this project. 

The  main users  in the  Commission  (DG  II  and  DG  V)  were  consulted  on  a  number  of 
occasions while the  draft  was  being  prepared.  Accordingly,  their requirements  were  made 
known  at  the  meetings  of  the  working  party,  thereby  enabling  the  representatives  of  the 
statistical services to take better account of their suggestions. 

The  overall  planning  of  the  proposed  draft  has  greatly  benefited  from  the  experience  of 
previous  surveys.  In  this  respect,  the  aim  of  the  working  party  has  been  to  prevent  the 
reoccurrence of the major problems which arose in the past. 

21 

ADDITIONAL STATEMENT CONCERNING THE EFTA MEMBERS OF THE 
EEA 

TITLE OF THE PROPOSED LEGISLATION 

Proposal for a Regulation on statistics on the level and structure of labour costs 

IMPACT ON THE EFTA MEMBERS OF THE EEA 

The EFTA members of the EEA have an interest in the proposed Regulation, and have been 
associated in its discussion. 

All the EFTA members of the EEA took part in the meetings of the Working Party relating 
to this matter. 

FINANCIAL STATEMENT 

The financial statement  annexed  to  this  document  concerns  the  Member  States  of  the 
European Union. 

22. 

ISSN 0254-1475 

COM(96) 475  final 

DOCUMENTS 

EN 

17 

Catalogue number  :  CB-C0-96-484-EN-C 

ISBN 92-78-09672-5 

Office for Official Publications of the European Communities 

L-2985 Luxembourg 

23