Commission Regulation (EC) No 1216/2003 of 7 July 2003 implementing Regulation (EC) No 450/2003 of the European Parliament and of the Council concerning the labour cost index (Text with EEA relevance)
Date: 2003-07-07
Institutions: European Commission
Subjects: EU statistics, Eurostat, data transmission, labour force, wage cost, wage indexing

8.7.2003

EN

Official Journal of the European Union

L 169/37

COMMISSION REGULATION (EC) No 1216/2003

of 7 July 2003

implementing Regulation (EC) No 450/2003 of the European Parliament and of the Council
concerning the labour cost index

(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(b) working-day adjusted;

Having regard to the Treaty establishing the European
Community,

(c) seasonally and working-day adjusted.

the
Having regard to Regulation (EC) No 450/2003 of
European Parliament and of the Council of 27 February 2003
concerning the labour cost index (1), and in particular Article
11 thereof,

Article 2

Quality

Whereas:

The quality criteria referred to in Article 8(1) of Regula-

1.
tion (EC) No 450/2003 shall comprise the following:

(1)

(2)

(3)

(4)

Seasonal and working-day adjustment of the labour cost
index is an essential part of the compilation of the index.
Adjusted series make it possible to compare results and
to interpret the index in a comprehensible manner.

transmission formats minimise

Predetermined
the
problems arising from the data transmission and,
together with standardised quality reports, improve the
interpretation and fast usage of the labour cost index.

The measures provided for in this Regulation are in
Statistical
the
accordance with
Programme Committee.

opinion

the

of

Pursuant to Article 9 of Regulation (EC) No 450/2003,
certain derogations from Regulation (EC) No 450/2003
should be granted,

HAS ADOPTED THIS REGULATION:

Article 1

Transmission and adjustment procedures

1.
The transmitted indices and metadata shall be sent in
electronic form by the Member States to the Commission
(Eurostat). Transmission shall conform to appropriate inter-
change standards approved by the Statistical Programme
Committee. Eurostat shall make available detailed documenta-
tion in relation to approved standards and shall supply guide-
lines on how to implement these standards.

2.
The transmitted indices and metadata shall be prepared in
such a way as to allow a thorough interpretation of the results
and the efficient application of the Commission's (Eurostat)
seasonal adjustment procedures for the European aggregates.

The index series shall be delivered in the following forms:

(a) relevance;

(b) accuracy;

(c) timeliness and punctuality;

(d) accessibility and clarity;

(e) comparability;

(f) coherence;

(g) completeness.

The national authorities shall ensure that the results reflect the
true situation regarding the economic activities with a sufficient
degree of representativity.

2.
The quality reports provided for by Article 8(2) of Regula-
tion (EC) No 450/2003 shall be transmitted to the Commission
by 31 August each year at the latest and shall relate to data
ending in the fourth quarter of the previous calendar year. The
first quality report shall be transmitted by 31 August 2004 at
the latest.

The content of the annual quality reports for the labour

3.
cost index shall be as set out in Annex I to this Regulation.

Article 3

Transition periods

Details relating to the transition periods provided for in Article
9(1) of Regulation (EC) No 450/2003 are set out in Annex II to
this Regulation.

Article 4

Feasibility studies

(a) unadjusted;

(1) OJ L 69, 13.3.2003, p. 1.

Details relating to the feasibility studies provided for in Article
10 of Regulation (EC) No 450/2003 are set out in Annex III to
this Regulation.

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Official Journal of the European Union

8.7.2003

Article 5

Chaining of the index

The Laspeyres chain index formula to be used for calculating the labour cost index for combinations of
NACE Rev. 1 sections referred to in the Annex to Regulation (EC) No 450/2003 is set out in Annex IV to
this Regulation.

Article 6

Derogations

Derogations from the provisions of Article 1(2) accepted pursuant to Article 9(2) of Regulation (EC) No
450/2003 are set out in Annex V to this Regulation.

Article 7

Entry into force

This Regulation shall enter into force on the 20th day following that of its publication in the Official Journal
of the European Union.

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

Done at Brussels, 7 July 2003.

For the Commission

Pedro SOLBES MIRA

Member of the Commission

8.7.2003

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Official Journal of the European Union

L 169/39

ANNEX I

The annual reports on quality for the labour cost index include the following items:

(a) evidence of relevance to user needs:

— a summary including description of the users, origin and satisfaction of users' needs, and relevance of statistics

for the users;

(b) evidence of accuracy (information broken down by NACE Rev. 1 sections):

— revision history: a table showing the revisions in the published year-on-year growth rates for total labour costs

using the unadjusted series, for the last 12 quarters; a summary of the reasons for the revisions,

— coverage: a table showing the percentage of the employees represented in the sample(s)/register(s) based on the
number of employees according to ESA 95; if labour cost items are collected from different sources, a table
broken down by labour cost items according to Article 4(2) of Regulation (EC) No 450/2003,
— frequency: a table showing the frequency of collecting/updating the different cost item information,
— estimation: a description of the methods used to estimate/model the missing information (missing groups of
employees, enterprises, economic activities and cost items); an evaluation, as quantitative as possible, of the
impact on the final figures of completely missing information (missing groups of employees, enterprises,
economic activities and cost items),

— hours worked: a description of the methods for compiling the hours worked; or a description of the proxy
measure of the hours worked and an evaluation, as quantitative as possible of the impact of the proxy measure
on the final figures,

— administrative data: where administrative data are used, comments on the correspondence and differences

between the administrative concepts and the theoretical statistical concepts;

(c) timeliness and punctuality:

— a table showing the delays in days in transmitting the data for the last 12 quarters covered by the report and the

correspondence between planned and actual date of transmission;

(d) accessibility and clarity:

— a description of the publication media for the data and metadata in Member States;

(e) comparability:

— a description of any differences in concepts and methods in any pair of consecutive quarters from the first
quarter of 1996 onwards. In addition, a description of the differences and an assessment, as quantitative as
possible, of the effect of the change in the estimates. Any differences in comparability between the NACE Rev. 1
sections should also be identified;

(f) coherence:

— a graph and a table showing annual unadjusted growth rates of the total labour cost index (NACE Rev. 1
sections) and of the ESA 95 compensation of employees per hours worked (A6 breakdown) with explanations
for the differences in the growth rates for the last 12 quarters;

(g) completeness:

— a progress report of the implementation of Regulation (EC) No 450/2003 together with a detailed plan and time-

table for completing the implementation; a summary of the remaining deviations from EU concepts.

The first quality report due by 31 August 2004 includes also the following items for the back data:

— a description of the sources used for the back data and the methodology employed,

— a description of the correspondence between the coverage (economic activities, employees, cost items) of the back

data and that of the current data,

— a description of the comparability of the back data and the current data.

L 169/40

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Official Journal of the European Union

8.7.2003

THE TRANSITION PERIODS RELATING TO THE IMPLEMENTATION OF THE REGULATION

ANNEX II

Member State

Provision concerns

Article

Transition period

Belgium

70 day transmission delay
Labour costs per hour worked

Germany

NACE sections H, I and K

Greece

Spain

France

Ireland

Italy

All provisions

70 day transmission delay

All provisions

All provisions

Labour costs per hour worked
Back data based on hours worked
70 day transmission delay
Employers' social contributions plus taxes paid by the
employer less subsidies received
— without treatment of taxes and subsidies (D4 and

D5)

Luxembourg

All provisions

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

Back data 1996-2002
Employers' social contributions plus taxes paid by the
employer less subsidies received
— without treatment of taxes and subsidies (D4 and

D5)

NACE sections C, D, E and F
NACE sections G, H, I, J and K

70 day transmission delay

All provisions

All provisions

Representation of Northern Ireland
Representation of units with less than 20 employees
Back data
Working-day adjustment

6
2

3

6

2
2, 5
6
4

5
4

3
3

6

3
3
5
11

2 years
2 years

2 years

2 years

2 years

2 years

2 years

1 year
1 year
1 year
2 years

2 years

2 years
2 years

1 year
2 years

1 year

2 years

2 years

2 years
2 years
1 year
2 years

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Official Journal of the European Union

L 169/41

ANNEX III

1. The feasibility study to assess how the quarterly labour cost indices can be obtained for NACE sections L,

M, N and O

The feasibility study undertaken by a Member State shall cover in particular:

The Background

The contribution each of these economic activities makes to the national economy, expressed in terms of labour costs
or a suitable alternative measure.

A description of the similarities and differences in labour cost structures and development for these economic activ-
ities compared with the cost structures and development within NACE sections C to K.

The Options

An evaluation of the practices in other Member States, where the data for these NACE sections are already available.

An assessment of the different options for obtaining the labour cost indices for NACE sections L, M, N and O, which
would allow data transmission for the first quarter of 2007. The following possible data sources should be taken into
account:
(a) the use of existing data collections;

(b) administrative sources;

(c) statistical estimation procedures;

(d) new data collections.

For each option considered, the assessment shall include details of the technical and legal issues involved; expected
start-up and running costs for the national statistical office; cost estimates for any additional burden on businesses;
the expected statistical quality of the results; any risks or uncertainties; and particular advantages or disadvantages.

The Recommendation

Based on the assessment of the different options, a recommendation on the most suitable approach shall be
proposed.

The Implementation

Details of the proposed implementation plan, including start date and the completion dates of specific stages of the
implementation of the recommendation.

Member States undertaking feasibility studies

The following Member States shall undertake feasibility studies to assess how the quarterly labour cost indices defined
in Article 4(1) of Regulation (EC) No 450/2003 can be obtained for NACE Rev. 1 sections L, M, N and O:
— Denmark

— Germany

— Greece

— Spain

— France

— Italy

— Austria

— Sweden.

2. The feasibility study to assess how the index estimating total

labour costs excluding bonuses can be

obtained

The feasibility study undertaken by a Member State shall cover in particular:

The Background

The contribution bonuses make to total national labour costs with a description of the characteristics of bonus
payments in the national economy.

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Official Journal of the European Union

8.7.2003

The Options

An evaluation of the practices in other Member States, where the data are already available to calculate an index of
total labour costs excluding bonuses.

An assessment of the different options for obtaining the index of total labour costs excluding bonuses, which allow
data transmission for the first quarter of 2007. The following possible data sources should be taken into account:
(a) the use of existing data collections;

(b) administrative sources;

(c) statistical estimation procedures;

(d) new data collections.

For each option considered, the assessment shall include details of the technical and legal issues involved; expected
start-up and running costs for the national statistical office; cost estimates for any additional burden on businesses;
the expected statistical quality of the results; any risks or uncertainties; and particular advantages or disadvantages.

The Recommendation

Based on the assessment of the different options, a recommendation on the most suitable approach shall be
proposed.

The Implementation

Details of the proposed implementation plan, including start date and the completion dates of specific stages of the
implementation of the recommendation.

Member States undertaking feasibility studies

The following Member States shall undertake feasibility studies to assess how the index estimating total labour costs
excluding bonuses defined in Article 4(2) of Regulation (EC) No 450/2003 can be obtained:
— Germany

— Greece

— France

— Italy

— Austria

— Portugal

— Finland

— Sweden.

8.7.2003

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Official Journal of the European Union

L 169/43

ANNEX IV

The Laspeyres chain index formula to be used for the calculation of the labour cost index (LCI) for combina-
tions of NACE Rev. 1 sections:

1. Define:

wi
ω

i

tj

= labour costs per hour worked of employees in NACE Rev. 1 section i in quarter t in year j

k

= labour costs per hour worked of employees in NACE Rev. 1 section i in year k

k

hi
Wi

k

= hours worked by employees in NACE Rev. 1 section i in year k
= ω

k = labour costs of employees in NACE Rev. 1 section i in year k.

k * hi
i

2. The basic Laspeyres formula to be used to calculate the LCI for quarter t in year j, with base year k is defined as:
(cid:2)Χλ

(cid:2)ωλ

LCI tj kð Þ ¼

ι

Σι χτκ
Σι ωλ

ι

θλ
ι
θλ
ι

Σι

¼

(cid:1)
ι = ωλ
χτκ
Σι Χλ

ι

ι

θλ
ι

ι

Σι

¼

(cid:1)
χτκ
ι = ωλ
Σι Χλ

ι

ι

ι

where 1 ≤ t ≤ 4.

3. The weights used to calculate the index are defined as:

Wk
i
Σι Χλ

ι

where Wi

k, i and k are defined in paragraph 1 of this Annex.

4. The annual link for year l to year l + 1, where 0 ≤ l < l + 1 < j is defined by:

Ll;lþ1 ¼

ι

Σι ωµþ1
Σι ωµ

ι

θµ
ι
θµ
ι

5. The Laspeyres chain index formula for quarter t in year j with reference year k = 0 and m the interval required to

process and apply the necessary annual weights, where 1 ≤ m ≤ 2, is defined as:
LCItj(0) = 100. (L0,1). (L1,2) ….. (Lj-m-1,j-m ). LCItj(j-m).

6. The first reference year shall be the year 2000, when the annual labour cost index equals 100.

ANNEX V

Derogations

Denmark, Germany, France and Sweden: the index series shall be delivered only (b) working-day adjusted and (c) season-
ally and working-day adjusted. The working-day and seasonal adjustment methods shall be fully documented and made
available for the Commission (Eurostat).