Proposal for a Council Decision on guidelines for Member States' employment policies for the year 2001
Date: 2000-09-06
Institutions: European Commission
Subjects: competence of the Member States, employment policy, labour market, member country, social policy

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Proposal for a Council Decision on Guidelines for Member States’ employment policies for the
year 2001

(2001/C 531 E/04)

(Text with EEA relevance)

COM(2000) 548 final (cid:151) 2000/0225(CNS)

(Submitted by the Commission on 6 September 2000)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 128(2) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of
Committee,

the Economic and Social

Having regard to the opinion of the Committee of the Regions,

Having regard to the opinion of the Employment Committee,

Whereas:

by

the

(1) The Luxembourg process, based on the implementation of
the coordinated European Employment Strategy, was
launched
European Council
extraordinary
meeting on Employment on 20 and 21 November 1997.
The Council resolution of 15 December 1997 on the 1998
Employment Guidelines, confirmed by the European
Council, has launched a process with high visibility,
strong
a wide-ranging
acceptance by all parties concerned.

commitment

political

and

modernising social protection and the promotion of
social inclusion, while ensuring that work pays, and the
long-term sustainability of social protection systems is
secured.

(6) The Lisbon European Council stressed the need to adapt
European education and training systems both to the
demands of the knowledge society and to the need for
an improved level and quality of employment, and called
upon Member States, the Council and the Commission to
pursue a substantial annual
capita
investment in human resources.

increase

in per

(7) The Santa Maria da Feira European Council on 19 and 20
June 2000 invited the social partners to play a more
prominent role in defining, implementing and evaluating
the employment guidelines which depend on them,
focusing particularly on modernising work organisation,
lifelong learning and increasing the employment rate,
particularly for women.

(8) The 2000 Joint Employment Report, drawn up by the
Council and the Commission, describes the employment
situation in the Community and examines the action
in implementing their
taken by the Member States
employment policy in line with the 2000 Employment
Guidelines, and the Council
recommendation of 14
February 2000 on the
implementation of Member
States’ employment policies.

(2) The Council Decision of 13 March 2000 on the 2000
Employment Guidelines has allowed consolidation of the
Luxembourg process
through compliance with those
Guidelines.

(9) On [. . .] the Council adopted a further recommendation
on the implementation of Member States’ employment
policies.

the most

(3) The Lisbon European Council on 23 and 24 March 2000
for the European Union to
set a new strategic goal
dynamic
and
competitive
become
knowledge-based economy in the world capable of
sustainable economic growth with more and better jobs
and greater social cohesion. The attainment of this goal
will enable the Union to regain the conditions of
full
employment.

(4) Consistency

and synergy between the Employment
Guidelines and the Broad Economic Policy Guidelines
must be ensured.

(5) In implementing the Employment Guidelines, Member
States should aim at a high degree of consistency with
two other priorities highlighted by the Lisbon Summit,

the Luxembourg Process
(10) The mid-term Review of
the Lisbon
conducted in 2000 at
European Council
in
revising the Employment Guidelines 2001, without
changing
in
and
four pillar
improving the efficiency of the Luxembourg Process.

request of
should be taken into account

structure,

basic

the

the

(11) The Member States should strengthen their efforts to
include and make visible a gender perspective across all
the pillars.

(12) The implementation of the guidelines may vary according
to their nature, the parties to whom they are addressed
and the different situations in the Member States. They
should respect the principle of subsidiarity and Member
States’ responsibilities with regard to employment.

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(13) In implementing the Employment Guidelines, Member
States should be able to take regional situations into
account, while
attainment of
respecting
national targets and the principle of equal treatment.

fully

the

(16) Sustainable development and the integration of environ-
into other Community policies are
the Treaty. Member States are invited to
to such integration within their national
employment

mental concerns
objectives of
give effect
employment
creation in the environmental field,

promoting

strategies

by

(14) Council Directive 1999/85/EC (1), which provides for the
possibility of applying a reduced VAT rate on labour-
intensive services on an experimental basis, should be
the
followed up in order
impact of national initiatives in terms of job potential.

in particular,

to examine,

HAS ADOPTED THIS DECISION:

Article 1

(15) The contribution of the Structural Funds, and in particular
the European Social Fund to the European Employment
Strategy in the new programming period should be high-
lighted.

The guidelines for Member States’ employment policies for the
year 2001, annexed hereto, are hereby adopted. They shall be
taken into account by the Member States in their employment
policies.

(1) OJ L 277, 28.10.1999, p. 34.

This Decision is addressed to the Member States.

Article 2

ANNEX

THE EMPLOYMENT GUIDELINES FOR 2001

Horizontal objectives (cid:151) Building conditions for full employment in a knowledge-based society

The careful build-up, over the last decade, of a macroeconomic framework for stability and growth coupled with
consistent efforts to reform labour, capital and services markets, as well as favourable prospects in the world
economy, has created a favourable economic outlook for the European Union which will bring the attainment of
some of its key fundamental objectives within reach. Further progress, however, is not automatic: it requires leadership,
commitment and concerted action.

This is why the European Council embraced full employment as an overarching objective of the EU’s employment and
social policy. It committed the Member States to reach the strategic goal of making the Union the most competitive and
dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs
and greater social cohesion. The achievement of these objectives requires simultaneous efforts by the Community and
the Member States.
It also requires a continued implementation of an effective and well balanced and mutually
supportive policy mix, based on macroeconomic policy, structural reforms promoting adaptable and flexible labour
markets, innovation and competitiveness, and an active welfare State promoting human resources development, partici-
pation, inclusion and solidarity.

Preparing the transition to a knowledge-based economy, reaping the benefits of the information and communication
technologies, modernising the European social model by investing in people and combating social exclusion and
promoting equal opportunities are key challenges for the Luxembourg process. In order to achieve the goal of full
employment set at Lisbon, the Member States should articulate their response to the guidelines under the four pillars in
a coherent overall strategy which incorporates the following horizontal objectives:

A. Enhancing job opportunities and providing adequate incentives for all those willing to take up gainful employment
with the aim of moving towards full employment. To this end, Member States should set national targets for raising
the rate of employment, in order to contribute to the overall European objectives of reaching by 2010 an overall
employment rate of 70 per cent and an employment rate of more than 60 per cent for women. In pursuing these
targets, the aim of increasing the quality of jobs should also be taken into consideration.

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B. Member States shall develop comprehensive and coherent strategies for lifelong learning, in order to help people
acquire and update the skills needed to cope with economic and social changes throughout the entire life cycle. In
particular, the strategies should cover the development of systems for initial, secondary and tertiary education,
further education and vocational training for young people and adults to improve their employability, adaptability
and skills, as well as their participation in the knowledge-based society. Such strategies should articulate the shared
responsibility of public authorities, enterprises, the social partners and individuals, with relevant contribution from
civil society, to contribute to the realisation of a knowledge-based society. In this context, the Social Partners should
negotiate and agree on measures to improve further education and training of adults to enhance the adaptability of
workers and competitiveness of business. To this end, Member States should set national targets for an increase in
investment in human resources as well as in participation in further education and training (whether formal or
informal) and monitor regularly progress towards such targets.

C. The Member States shall develop a comprehensive partnership with the Social Partners for the implementation, the
monitoring and the follow-up of the Employment Strategy. The Social Partners at all levels are invited to step up
their action in support of the Luxembourg process. Within the overall framework and the objectives set by these
guidelines, the Social Partners are invited to develop, in accordance with their national traditions and practices, their
own process of implementing the guidelines for which they have the key responsibility, identify the issues upon
which they will negotiate, and report regularly on progress as well as the impact of their actions on employment and
labour market functioning. The Social Partners at European level are invited to define their own contribution and to
monitor, encourage and support efforts undertaken at national level.

D.

In translating the Employment Guidelines into national policies, Member States will give due attention to all the four
pillars and the horizontal objectives by setting their priorities in a balanced manner, so as to respect the integrated
nature and equal value of the guidelines. The National Action Plans will develop the strategy for employment,
comprising an identification of the policy mix based on the four pillars and the horizontal objectives which should
make explicit how policy initiatives under different guidelines are structured in order to reach long-term goals.

E. The Member States and the Commission should strengthen the development of quantitative common indicators in
order to evaluate adequately progress under all four pillars and to underpin the setting of benchmarks and the
identification of good practice. The Social Partners should develop appropriate indicators and benchmarks and
supporting statistical databases to measure progress in the actions for which they are responsible.

I.

Improving employability

Tackling youth unemployment and preventing long-term unemployment

In order to influence the trend in youth and long-term unemployment, the Member States will intensify their efforts to
develop preventive and employability-oriented strategies, building on the early identification of individual needs; within
a period to be determined by each Member State which may not exceed two years and which may be longer in Member
States with particularly high unemployment, Member States will ensure that:

Every unemployed person is offered a new start before reaching six months of unemployment in the case of young
1.
people, and twelve months of unemployment in the case of adults in the form of training, retraining, work practice, a
job, or other employability measure, and, if necessary, with accompanying individual vocational guidance and coun-
selling with a view to effective integration into the labour market.

These preventive and employability measures should be combined with measures to reduce the stock of long-term
unemployed by promoting their reinsertion in the labour market.

In this context, Member States should pursue the modernisation of their public employment services and their part-
nership with other service providers so that they can deal with the strategy of prevention and activation in the most
effective way.

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A more employment friendly approach: benefits, taxes and training systems

Benefit, tax and training systems where that proves necessary must be reviewed and adapted to ensure that they actively
support the employability of unemployed persons. Moreover, these systems should interact appropriately to encourage
the return to the labour market of those inactive persons willing and able to take up a job. Particular attention should be
given to promoting incentives for unemployed or inactive people to seek and take up work, as well as measures to
upgrade their skills and enhance job opportunities in particular for those with greatest difficulties.

2.

Each Member State will

(cid:151) review and, where appropriate, reform its benefit and tax system to remove poverty traps, and provide incentives for

unemployed or inactive people to seek and take up work,

(cid:151) endeavour to increase significantly the proportion of persons benefiting from active measures to improve their
employability with a view to effective integration into the labour market, and will increase, in the light of its starting
situation,
its per capita expenditure on active measures, taking into account cost effectiveness and the overall
budgetary balance.

Developing a policy for active ageing

In-depth changes in the prevailing social attitudes towards older workers, as well as a revision of tax-benefit systems are
called for, in order to reach full employment, to help ensure the long-term fairness and sustainability of social security
systems, and to make the best use of older workers’ experience.

3. Member States will therefore develop policies for active ageing with the aim of enhancing the capacity of and
incentives for older workers to remain in the labour force as long as possible, in particular by:

(cid:151) adopting positive measures to maintain working capacity and skills of older workers, to introduce flexible working

arrangements and to raise employers’ awareness of the potential of older workers,

(cid:151) ensuring that older workers have sufficient access to further education and training to allow them to participate on

an equal footing in a knowledge-based labour market, and

(cid:151) reviewing tax and social protection systems with the aim of removing disincentives and creating new incentives for

older workers to remain active in the labour market.

Developing skills for the new labour market in the context of Lifelong Learning

Effective and well functioning educational and training systems responsive to labour-market needs are key to the
development of the knowledge-based economy and to the improvement of the level and quality of employment.
They are also crucial to the delivery of lifelong learning to allow for a smooth transition from school to work, lay
the foundations for productive human resources equipped with core and specific skills and enable people to adapt
positively to social and economic change. The development of an employable labour force involves providing people
with the capacity to access and reap the benefits of the knowledge-based society, addressing skill gaps and preventing
the erosion of skills resulting from unemployment, non-participation and exclusion throughout the lifecycle.

4. Member States will therefore improve the quality of their education and training systems, as well as the relevant
curricula, including the modernisation of apprenticeship systems, and the development of multi-purpose local learning
centres, in order to:

(cid:151) Equip young people with the basic skills, including IT and language skills, relevant to the labour market and needed

to participate in lifelong learning.

(cid:151) Eradicate illiteracy and reduce substantially the number of young people who drop out of the school system early, in
particular by developing appropriate support for young people with learning difficulties. Member States will in this
context develop measures aimed at halving by 2010 the number of 18 to 24 year olds with only lower-secondary
level education who are not in further education and training.

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(cid:151) Promote conditions to facilitate better access of adults, including those with a-typical contracts, to lifelong learning,
so as to approach gradually the proportion of adult working-age population (25-64 year olds) participating at any
given time in education and training in the best performing Member States, doubling the existing levels by 2005, to
reach at least 10 % by 2010.

(cid:151) Ensure that their education systems deliver a continuously updated package of core skills.

In order to facilitate mobility and encourage lifelong learning, Member States should improve the recognition of
qualifications, acquired knowledge and skills.

5. Member States will aim at developing e-learning for all citizens. In particular, Member States will ensure that all
education and training institutions have access to the internet and multimedia resources by the end of 2001 and that all
the teachers and trainers concerned are skilled in the use of these technologies by the end of 2002 in order to provide
all pupils with a broad digital literacy.

6. Member States will promote measures for unemployed people to acquire or upgrade skills including IT and
communication skills, thereby facilitating their access to the labour market and reducing skills gaps. To this end,
each Member State will fix a target for active measures involving training offered to the unemployed, thereby aiming
at gradually achieving the average of the three most advanced Member States, and at least 20 %.

Active policies to develop job matching and to prevent and combat emerging bottlenecks

In all Member States unemployment and exclusion from the labour market coexist with labour shortages in certain
sectors, occupations and regions. With the improvement of the employment situation and accelerating pace of tech-
nological change, these bottlenecks are increasing. An insufficiency of active policies to prevent and combat emerging
labour shortages will harm competitiveness, increase inflationary pressures and keep structural unemployment high.

7. Member States will, as appropriate with the social partners, step up their efforts to identify and prevent emerging
bottlenecks, in particular by:

(cid:151) developing the job-matching capacities of employment services,

(cid:151) developing policies to prevent skills shortages,

(cid:151) promoting occupational and geographical mobility,

(cid:151) enhancing the functioning of labour markets by improving databases on jobs and learning opportunities, which
should be interconnected at European level, making use of modern information technologies and experience already
available at European level.

Combating discrimination and promoting social inclusion by access to employment

Many groups and individuals experience particular difficulties in acquiring relevant skills and in gaining access to, and
remaining in the labour market. This may increase the risk of exclusion. A coherent set of policies which promote social
inclusion by supporting the integration of disadvantaged groups and individuals into the world of work, and combat
discrimination in access to, and on, the labour market is called for.

8.

Each Member State will

(cid:151) Develop pathways consisting of effective preventive and active policy measures to promote the integration into the
labour market of groups and individuals at risk or with a disadvantage, in order to avoid marginalisation, the
emergence of (cid:145)working poor(cid:146) and a drift into exclusion.

(cid:151) Implement appropriate measures to meet the needs of the disabled, ethnic minorities and migrant workers as
regards their integration into the labour market and set national targets for this purpose, in accordance with the
national situation.

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(cid:151) Implement appropriate measures to meet the needs of the disabled, ethnic minorities and migrant workers as
regards their integration into the labour market and set national targets for this purpose, in accordance with the
national situation.

II. Developing entrepreneurship and job creation

Making it easier to start up and run businesses

The development of new businesses in general, and the contribution to the growth of small and medium-sized enter-
prises (SMEs) in particular, is essential for job creation and for the expansion of training opportunities for young people.
This process must be promoted by encouraging greater entrepreneurial awareness across society and in educational
curricula, by providing a clear, stable and predictable set of rules and regulations by improving the conditions for the
development of, and access to, risk capital markets. The Member States should also reduce and simplify the adminis-
trative and tax burdens on SMEs. These policies should strengthen the prevention of undeclared work.

9.
The Member States will give particular attention to reducing significantly the overhead costs and administrative
burdens for businesses, in particular when an enterprise is being set up and when hiring additional workers. Also, the
Member States should, when designing new regulations, assess their eventual impact on such administrative burdens and
overhead costs for businesses.

10.

The Member States will encourage the take up of entrepreneurial activities

(cid:151) by examining, with the aim of reducing, any obstacles which may exist, especially those within tax and social

security regimes, to moving to self-employment and the setting up of small businesses,

(cid:151) by promoting education for entrepreneurship and self-employment, targeted support services as well as training for

entrepreneurs and would-be entrepreneurs,

(cid:151) by combating undeclared work and encouraging the transformation of such work into regular employment, making
in
including regulatory measures,

incentives and tax and benefit reform,

use of all relevant means of action,
partnership with the Social Partners.

New opportunities for employment in the knowledge-based society and in services

If the European Union wants to deal successfully with the employment challenge, all possible sources of jobs and new
technologies must be exploited effectively. Innovative enterprises must find a supportive environment because they can
make an essential contribution to mobilising the job-creation potential of the knowledge-based society. A considerable
potential exists in particular in the services sector. To this end:

11.
The Member States will remove barriers to the provision of services and develop framework conditions to exploit
fully the employment potential of the services sector to create more and better jobs, across the full range of traditional
and non-traditional services, business-related and personal services. In particular, the employment potential of the
knowledge society and the environmental sector should be tapped.

Local action for employment

All actors at the regional and local
identifying the potential of job creation at local level and strengthening partnerships to this end.

levels must be mobilised to implement the European Employment Strategy by

12. Member States will

(cid:151) Encourage local and regional authorities to develop strategies for employment in order to exploit fully the possi-

bilities offered by job creation at local level.

(cid:151) Promote partnerships between all actors concerned including the social partners, in the implementation of such

strategies at the local level.

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(cid:151) Promote measures to enhance the competitive development and job creation capacity of the social economy,
especially the provision of goods and services linked to needs not yet satisfied by the market, and examine, with
the aim of reducing, any obstacles in the way of such measures.

(cid:151) Strengthen the role of the Public Employment Services at all levels in identifying local employment opportunities

and improving the functioning of local labour markets.

Tax reforms for employment and training

It is important to deepen the examination of the employment impact of the tax burden, and make the taxation system
more employment friendly by reversing the long-term trend towards higher taxes and charges on labour. Tax reforms
must also take into account the need to increase investment in people, by business, public authorities and individuals
themselves, in view of the longer term impact on employment and competitiveness.

13.

Each Member State will

(cid:151) Set a target, if necessary and taking account of its present level, for gradually reducing the overall tax burden and,
where appropriate, set a target for gradually reducing the fiscal pressure on labour and non-wage labour costs, in
particular on relatively unskilled and low-paid labour. Such reforms should be undertaken without jeopardising the
recovery of public finances or the financial equilibrium of social security systems.

(cid:151) Provide incentives and remove tax obstacles to investment in human resources,

(cid:151) Examine the desirability of using alternative sources of tax revenue, inter alia energy and pollutant emissions, taking

into account current market trends, notably in oil markets.

III. Encouraging adaptability of businesses and their employees

The opportunities created by the knowledge-based economy and the prospect of an improved level and quality of
employment require a consequent adaptation of work organisation and the contribution to the implementation of
life-long Learning strategies by all actors including enterprises, in order to meet the needs of workers and employers.

Modernising work organisation

In order to promote the modernisation of work organisation and forms of work, a strong partnership should be
developed at all appropriate levels (European, national, sectoral, local and enterprise levels).

14.
The social partners are invited to negotiate and implement at all appropriate levels agreements to modernise the
organisation of work, including flexible working arrangements, with the aim of making undertakings productive and
competitive, achieving the required balance between flexibility and security, and increasing the quality of jobs. Subjects
to be covered may, for example, include the introduction of new technologies, new forms of work (e.g. telework) and
working time issues such as the expression of working time as an annual figure, the reduction of working hours, the
reduction of overtime, the development of part-time working, and access to career breaks. Within the context of the
Luxembourg Process, the social partners are invited to report annually on which aspects of the modernisation of the
organisation of work have been covered by the negotiations as well as the status of their implementation and impact on
employment and labour market functioning.

15. Member States will, where appropriate with the social partners,

(cid:151) review the existing regulatory framework, and examine proposals for new provisions and incentives to make sure
they will contribute to reducing barriers to employment, to facilitate the introduction of modernised work organi-
sation and to helping the labour market adapt to structural change in the economy,

(cid:151) endeavour to ensure a better application at workplace level of existing health and safety legislation by stepping up
and strengthening enforcement, by providing guidance to help enterprises, especially SMEs, to comply with existing
legislation, by improving training on occupational health and safety, and by setting target figures for reduction of
occupational accidents and diseases in traditional high risk sectors,

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(cid:151) at the same time, taking into account the fact that forms of employment are increasingly diverse, examine the
possibility of incorporating in national law more flexible types of contract, and ensure that those working under
new flexible contracts enjoy adequate security and higher occupational status, compatible with the needs of
business.

Supporting adaptability in enterprises as a component of lifelong learning

In order to renew skill levels within enterprises as a key component to lifelong learning:

16.

The Social Partners are invited, at all relevant levels, to:

(cid:151) conclude agreements on lifelong learning to facilitate adaptability and innovation, particularly in the field of
information and communication technologies. In this context, the conditions for giving every worker the oppor-
tunity to achieve information society literacy by 2003 should be established,

(cid:151) encourage companies to identify and disseminate best practices on lifelong learning and to develop a European

award for particularly progressive firms.

IV. Strengthening equal opportunities policies for women and men

Gender mainstreaming approach

In order to meet the objective of equal opportunity and reach the target of an increased employment rate for women in
line with the conclusions of the Lisbon European Council, Member States’ policies towards gender equality should be
strengthened and should address all relevant conditions influencing women’s decisions to take up employment.

Women still face particular problems in gaining access to employment, in career advancement, in earnings and in
reconciling professional and family life. It is therefore important, inter alia:

(cid:151) to ensure that active labour market policies are made available for women in proportion to their share of unem-

ployment,

(cid:151) to pay particular attention to the gender impact of tax and benefit systems. Wherever tax-benefit structures are

identified that impact negatively on women’s participation in the labour force, they should be reviewed,

(cid:151) to pay particular attention to ensuring the application of the principle of equal pay for equal work or work of

equivalent value,

(cid:151) to give particular attention to obstacles which hinder women who wish to set up new businesses or become

self-employed,

(cid:151) to ensure that women are able to benefit positively from flexible forms of work organisation, on a voluntary basis

and without loss of job quality.

Therefore, the Member States will adopt a gender-mainstreaming approach in implementing the Guidelines across

17.
all four pillars:

(cid:151) developing and reinforcing consultative systems with gender equality bodies,

(cid:151) applying procedures for gender impact assessment under each guideline,

(cid:151) developing indicators to measure progress in gender equality in relation to each guideline.

In order meaningfully to evaluate progress, Member States will need to provide for adequate data collection systems and
procedures.

Tackling gender gaps

Member States and the Social Partners should pay attention to the imbalance in the representation of women or men in
certain economic sectors and occupations, as well as to the improvement of female career opportunities.

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18. Member States will, where appropriate with the Social Partners:

(cid:151) strengthen their efforts to reduce the gap in unemployment rates between women and men by actively supporting

the increased employment of women,

(cid:151) take action to bring about a balanced representation of women and men in all sectors and occupations,

(cid:151) initiate positive steps to promote equal pay for equal work or work of equal value and to diminish differentials in
incomes between women and men: actions to address gender pay gaps are necessary in the public and private
sector, and the impact of the policies on gender pay gaps should be identified and addressed,

(cid:151) consider an increased use of measures for the advancement of women in order to reduce gender gaps.

Reconciling work and family life

Policies on career breaks, parental leave and part-time work, as well as flexible working arrangements which serve the
interests of both employers and employees, are of particular importance to women and men. Implementation of the
various Directives and social-partner agreements in this area should be accelerated and monitored regularly. There must
be an adequate provision of good quality care for children and other dependants in order to support women’s and men’s
entry and continued participation in the labour market. An equal sharing of family responsibilities is crucial in this
respect. Those returning to the labour market after an absence may also have outmoded skills, and experience difficulty
in gaining access to training. Reintegration of women and men into the labour market after an absence must be
facilitated. In order to strengthen equal opportunities,

19. Member States and the social partners will:

(cid:151) design,

implement and promote family-friendly policies,

including affordable, accessible and high quality care

services for children and other dependants, as well as parental and other leave schemes,

(cid:151) consider setting a national target, in accordance with their national situation, for increasing the availability of care

facilities,

(cid:151) give specific attention to women, and men, considering a return to the paid workforce after an absence and, to that

end, they will examine the means of gradually eliminating the obstacles in the way of such return.