WOULD NEED TO BE GIVEN TO NOT GRANTING EXCESSIVE INCREASES IN TOTAL REMUNERATION WHILE NORMAL PROFITABILITY LEVELS ARE BEING RESTORED .
POINT 11 : AN APPROPRIATE TREND FOR PER CAPITA REAL WAGES FOR THE COMMUNITY AS A WHOLE WOULD BE ONE OF STRICT MODERATION CONSISTENT WITH THE OBJECTIVE OF ACHIEVING A PAUSE IN THE GROWTH OR EVEN A REDUCTION IN TOTAL REAL LABOUR COSTS SO THAT THE COST STRUCTURE OF FIRMS BECOMES MORE CONDUCIVE TO EMPLOYMENT CREATION . BY COUNTRY , INDUSTRY , ENTERPRISE AND SKILL THERE SHOULD BE MORE DIFFERENTIATED TRENDS IN ORDER TO RETURN TO A HIGH EMPLOYMENT LEVEL TOGETHER WITH THE HIGHEST FEASIBLE AVERAGE WAGE . IN SOME COUNTRIES IN PARTICULAR SOME MODEST REAL WAGE INCREASES MAY BE WARRANTED , BUT ELSEWHERE STRICT DISCIPLINE MUST BE RESPECTED . CONVERSION OF A SIGNIFICANT FRACTION OF PAY INTO A PROFIT - OR PERFORMANCE-RELATED ELEMENT WOULD HELP GIVE A MUCH NEEDED INCREASE IN REAL WAGE FLEXIBILITY IN THE COMMUNITY . COMBINED WITH REDUCTIONS IN EMPLOYMENT TAXES AND THE COSTS ASSOCIATED WITH UNDUE LABOUR MARKET REGULATION ( SEE POINTS 4 AND 13 ) , STRICT WAGE MODERATION WOULD - IN CONDITIONS OF STRONGER OUTPUT AND DEMAND GROWTH - LEAD TO A STRUCTURAL CHANGE IN RELATIVE FACTOR REWARDS HIGHLY FAVOURABLE TO EMPLOYMENT .
3.4.2 PROMOTING ADAPTABILITY IN THE LABOUR MARKET
CONDITIONS OF EMPLOYMENT IN THE COMMUNITY ARE THE SUBJECT OF BOTH LEGISLATION AND COLLECTIVE AGREEMENT . SUCH REGULATIONS AND CONVENTIONS TYPICALLY CONCERN CONDITIONS OF RECRUITMENT AND DISMISSAL , THE DURATION OF EMPLOYMENT CONTRACTS , CONDITIONS OF PART-TIME WORK , LEVELS OF PROFESSIONAL TRAINING PROVISIONS AND QUALIFICATIONS , WAGE RELATIVITIES AND MINIMUM WAGE PROVISIONS . THEY WERE GENERALLY INTRODUCED IN PERIODS OF HIGH GROWTH AND FULL EMPLOYMENT WHEN THERE WAS CONSIDERABLE LABOUR MOBILITY . SOME OF THESE REGULATIONS HAVE PROVED TO BE ILL-ADAPTED TO NEW CIRCUMSTANCES AND MAY , IN SOME CASES , HAVE REINFORCED THE RIGIDITIES WHICH HAVE HINDERED EMPLOYMENT CREATION , ESPECIALLY IN A PERIOD OF LOW GROWTH . EVIDENCE OF RIGIDITIES OF THIS KIND IS SEEN IN THE WEAK SHORT - AND LONG-RUN EMPLOYMENT PROPENSITY OF THE ECONOMY FOR EACH POINT OF OUTPUT AND DEMAND GROWTH ; IN ECONOMETRIC STUDIES OF CAPITAL AND LABOUR DEMAND IN THE PRODUCTION PROCESS ; AND IN MUCH INFORMAL EVIDENCE OF HOW ENTERPRISES IN EUROPE TEND TO REACT TO INCREASES IN DEMAND . FOR EXAMPLE , ON THE LATTER POINT , IT IS WIDELY REPORTED THAT ENTERPRISES AT PRESENT DELAY RECRUITING ADDITIONAL LABOUR WHEN PRODUCT DEMAND INCREASES , IN ORDER TO BE SURE THAT THEY DO NOT INCREASE THEIR LONG-RUN LABOUR COSTS WHEN THE PRODUCT DEMAND MAY PROVE ONLY SHORT-TERM .
WHILE MANY MECHANISMS , PARTICULARLY THOSE ENFORCED BY LEGISLATION , MAY HAVE CONTRIBUTED TO RIGIDITY , THERE ARE INDICATIONS THAT COLLECTIVE NEGOTIATIONS ARE INCREASINGLY TAKING INTO ACCOUNT THE NEED FOR FLEXIBILITY AND ADAPTABILITY , ESPECIALLY IN RELATION TO THE INTERNAL WORK ORGANIZATION OF ENTERPRISES AND TO WORKING TIME PRACTICES .
AGAINST THIS BACKGROUND THE ECONOMIC POLICY COMMITTEE OF THE EC HAS EXAMINED THE PRESENT