Ministers' Deputies / Rapporteur Groups
GR-AB
Rapporteur Group on Administrative and Budgetary Questions

GR-AB(2005)6 11 February 20051
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Salary adjustment method adopted by the Deputies at their 818th meeting (27 November 2002)

Item to be considered by the GR-AB at its meeting on 21 February 2005


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At their 818th meeting (27 November 2002, item 11.2), the Deputies:

1. took note of the letter of the Chairman of the Co-ordinating Committee on Remunerations (CCR) to the Councils of the Co-ordinated Organisations dated 12 July 2002, as well as the 139th Report of the CCR concerning the remuneration of the Staff of the Co-ordinated Organisations: General Review, Report by the CCR Chairman as they appear in CM(2002)138;

2. decided that as from 1 January 2003 the salary adjustment procedure as determined by the 80th Report of the CCR will be replaced by the new salary adjustment method provided for in the Annex to the 139th Report <see attached>, under the following conditions:

a. Articles 1 to 7 and 9 to 13 are adopted as set out in the Annex to this report, with the result that:

- the principle of private sector studies (Article 10, paragraph 4) is maintained, and
- provision is made for the possible introduction of flexible management of salary scales, to be examined by the CCR after having been submitted to the Committee of Ministers (Article 12);

b. As regards Article 8, in case of exceptional budgetary difficulties, the Committee of Ministers has the right to decide that the annual adjustment recommended by the CCR can be reduced or not awarded at all, or phased in or postponed till later in the calendar year. The Committee of Ministers also maintains the right to implement an adjustment superior to that recommended by the CCR. Any such decision shall be based on a proposal by the Secretary General or the Committee of Ministers and must:

- be based on the justifiable budgetary circumstances,
- respect general legal principles in this domain, especially the principle of proportionality,
- be established openly in consultation with the Staff Committee;

3. invited the Secretary General to examine with the representatives of Secretaries General of the other Co-ordinated Organisations ways to reinforce the system so that it continues to fulfil its role.

Annex to the 139th Report of the CCR2

CHAPTER I: GENERAL PROVISIONS

Article 1: Duration of validity of and subsequent amendments to the rules

1.1 These rules shall determine the remuneration adjustment procedure for the four-year period from 1 January 2003 to 31 December 2006. Should any amendments be made subsequently to these rules, no provision which ceases to apply shall give rise to vested rights.

1.2 Proposals to amend these rules as from 1 January 2007 shall be submitted for examination by the Co-ordinating Committee on Remuneration (CCR) by 1 January 2006.

1.3 In the absence of any recommendation by the CCR, made by 1 November 2006 at the latest, either to prolong or amend these rules with effect from 1 January 2007, the present method, as applicable in year 2006, shall be prolonged until 31 December 2007. In the event that no consensus has been reached by 31 August 2007, the Chairman shall submit his report to governing bodies on the different views expressed in the CCR, outlining, as far as possible, the broad lines of consensus, in accordance with Article 5(h) of the Regulations concerning the co-ordination system by 30 September 2007 at the latest.

Article 2: Frequency of adjustments

2.1 Salary scales shall be adjusted annually at 1 January subject to the provisions in Article 8.

2.2 Special adjustments may be made in accordance with the provisions in Article 7.

Article 3: Procedure

3.1 Dossier for annual reviews

3.1.1 Every year the CCR shall examine the proposals for remuneration adjustment submitted by the Secretaries/Directors General in accordance with these rules. These proposals shall be accompanied by tables giving an estimate of their budgetary impact as a percentage of total salary costs and in monetary terms, both overall and for each Organisation. They shall also be accompanied by tables giving an estimate of the budgetary impact of these proposals on pension costs foreseen for each Organisation for the following year.

3.1.2 When presenting reports on adjustment of remuneration, the Secretaries/Directors General shall inform their decision-making bodies of the financial consequences for the respective budgets which result from CCR recommendations.

3.2 Recommendations

The CCR shall formulate the recommendations necessary for the application of the present regulations in accordance with sub-paragraphs (e), (g) and (h) of Article 5 of the Regulations concerning the co-ordination system. Recommendations concerning the adjustment of remuneration at 1 January shall be made not later than 30 November of the preceding year.

CHAPTER II: DEFINITIONS

Article 4: Definitions

For the purposes of the calculations provided for in these rules:

4.1 For the staff of the Co-ordinated Organisations:

remuneration comprises, for the whole staff of the Co-ordinated Organisations, the following elements:

-- basic salary,
-- expatriation allowance,
-- household allowance,
-- dependent persons allowances.

4.2 For the "reference index" shall be calculated:

the weighted average of the percentage changes from 1 July of the preceding year to 1 July of the current year in real terms, in the net remuneration of selected jobs in the national civil services of the reference countries, or of the comparable grades in the national civil services of the reference countries where the national remuneration system is not yet based on jobs;

4.2.1 "Selected jobs" shall mean those jobs of officials in national civil services of the reference countries whose functions are representative in the national civil services and which have been selected among co-ordinated jobs by those national civil services for use by the Inter-Organisations Section (IOS) in salary surveys of the reference index [see Appendix 3];

4.2.2 "Comparable grades" shall mean those grades of officials of national civil servants in the reference countries whose functions can be matched with the jobs selected among co-ordinated jobs [see Appendix 3];

4.2.3 "the national civil services of the reference countries" shall mean central government of the following countries: Belgium, France, Germany, Italy, Luxembourg, the Netherlands and the United Kingdom [see Appendix 1];

4.2.3.1 "net remuneration"shall mean the average of the gross minimum and gross maximum salary which can be reached by an official without changing jobs (top of automatic career development). To these shall be added all the other elements making up the remuneration of unmarried officials in the job in question in the national civil service. From these are deducted the amount of income tax levied by the central authorities on unmarried officials as calculated without taking into account of non-automatic personal allowances. Also shall be taken into account all other financial and non-financial changes to national civil service terms and conditions as well as compulsory social deductions. This constitutes the "relevant remuneration”;

4.2.3.2 the effect of variations from one year to another in a specific compulsory deduction made from the salaries of officials in the national civil services shall be neutralised in order to avoid double counting of these variations against the corresponding deduction in Co-ordinated Organisations' staff salaries;

4.2.3.3 deductions from national civil service salaries for benefits not granted to staff of Co-ordinated Organisations shall not be taken into account;

4.2.4 "the weighted average of percentage changes in real terms" shall mean the percentage arrived at after:

    4.2.4.1 first, calculating for each selected job or comparable grade in each national civil service in the reference countries, the changes in real terms of the relevant remuneration [see sub-paragraphs 4.2.3.1, 4.2.3.2 and 4.2.3.3 above] by deflating the index for the trend in net nominal salaries by the national consumer price index [see paragraph 4.3 and Appendix 2 below], the indices being brought back to base 100 at the date of effect of the last review;

    4.2.4.2 second, calculating for each country an index of average changes in real terms for all selected jobs or comparable grades;

    4.2.4.3 third, and finally, calculating for all seven reference countries, the average percentage change by giving the index data for each country considered the following weights: 9.6 for Belgium, 19.1 for France, 23.6 for Germany, 14.2 for Italy, 7.2 for Luxembourg, 10.2 for the Netherlands and 16.1 for the United Kingdom.

4.3 For the national consumer price indices

The consumer price indices to be used for the purposes of these rules shall be as indicated in Appendix 2.

4.4 For the purchasing power parities

The purchasing power parities to be used in implementing these rules shall be those defined in Appendix 2.

CHAPTER III: ANNUAL ADJUSTMENTS OF BASIC SALARIES

Article 5: Annual adjustments of basic salaries

5.1 Belgian salary scales

5.1.1 The basic salaries of category A, L, B and C staff posted in Belgium shall be adjusted at 1 January of the year in question (year n), subject to the provisions in Article 8. The amount of this adjustment shall be equivalent to the percentage change over the preceding 12-month period from 1 July of year n-2 to 1 July of year n-1, resulting from the product of the reference index as set out in Article 4.2 and the appropriate national consumer price index as set out in Appendix 2. The percentage adjustment in basic salaries for staff serving in Luxembourg shall be the same as for staff serving in Belgium.

5.1.2 These percentage adjustments shall apply to basic salaries in force at 31 December of the preceding year.

5.1.3 Any special adjustment made following a change in the national consumer price index during the 12-month period referred to in paragraph 5.1.1 above shall be deducted from the annual adjustment.

5.2 Salary scales for other countries

5.2.1 For A and L category staff posted in the other countries, the basic salaries shall be adjusted annually at 1st January by the salary adjustment calculated on the basis of the national consumer price index and the reference index and by the purchasing power parities as set out in Appendix 2, in order to guarantee a relative equivalency of purchasing power between the scales of the countries concerned.

5.2.2 Basic salaries of B and C category staff shall be subject to an adjustment equal to the percentage determined for A and L grade staff of that country.

CHAPTER IV: ANNUAL ADJUSTMENTS OF ALLOWANCES FIXED IN ABSOLUTE VALUE

Article 6: Annual adjustments of allowances fixed in absolute value

6.1 With effect from 1 January of the year in question (year n) allowances fixed in absolute value shall be adjusted annually by the product of the reference index and the percentage change in the national consumer price index as well as the purchasing power parities, where applicable, over the 12-month period, from 1 July of year n-2 to 1 July of year n-1.

6.2 These adjustments shall apply to the amounts in force at 31 December of the preceding year.

CHAPTER V: SPECIAL ADJUSTMENTS OF REMUNERATION

Article 7: Special adjustments of remuneration

7.1 When the national consumer price index in a country, as defined in paragraph 4.3 of Article 4, since the date of effect of the last adjustment of remuneration shows an increase of at least 5%, the Chairman, on behalf of CCR, may send to Councils recommendations providing for a special adjustment of remuneration as soon as he has been informed thereof by the Head of the IOS. The published report will serve as notification to the CCR.

7.2 Any special adjustment made following a change in the national consumer price indices during the 12-month period referred to in paragraph 6.1 shall be deducted from the annual adjustment.

CHAPTER VI: AFFORDABILITY

Article 8: Affordability

Each Council must make a decision on the contents of Article 8 in the light of the comments by the Chairman of the CCR in the Report, paragraphs 3.5 to 3.10.

CHAPTER VII: INTERMEDIATE STUDIES AND MONITORING

Article 9: Reference data

The IOS shall keep itself informed about any changes in all the components of the various reference indices referred to in Article 4.

Article 10: Studies

10.1 The Chairman shall in June, after consultation with the Chairman of the CRSG, propose to the CCR an annual programme of studies for the following year. Such studies are intended to inform the CCR and the joint meetings about questions within their terms of reference. The programme shall be adopted by the CCR by a two-thirds majority.

10.2 A Studies Committee, comprising the Chairman and a Vice-Chairman of the CCR, of the Committee of Representatives of the Secretaries/Directors General (CRSG) and of the Committee of Staff Representatives (CRP) and one delegate of each Committee shall be set up. It shall be chaired by the Chairman of the CCR.

10.3 This Committee shall determine the timetable and procedures for the studies. The Studies Committee may create a steering committee to guide a particular study. Its membership shall be decided by consensus of the members of the Studies committee, failing which the Chairman of the CCR shall decide.

10.4 The following study shall be undertaken during the duration of the method:

updating, before July 2005, comparative studies of salary levels of A and B grade staff with the remuneration of the private and public sectors and of international organisations on the basis of a limited representative sample of benchmark jobs. [Please see comments by the Chairman of the CCR in the Report, paragraphs 3.11 and 3.12.]

CHAPTER VIII: OTHER ARRANGEMENTS

Article 11: Reductions of scales

In the event of a reduction in the salary scales following the application of Article 5, the CCR may recommend suspending the negative effect of Article 5 in order to maintain the salary scales at their current level until the following adjustment.

Article 12: Flexible management of salary scales

Projects concerning the introduction of flexible management of salary scales in the Organisations may be examined by the CCR after being submitted to the respective Councils. [Please see comments by the Chairman of the CCR in the Report, paragraphs 3.13 and 3.14.]

Article 13: Measures to apply in duty countries where small numbers of staff are assigned

Notwithstanding Article 5, in countries where less than fifty persons are assigned by one or more Co-ordinated Organisations, the Secretary/Director General concerned may, after consulting with the IOS, propose appropriate remuneration measures to his governing body in order to take account of recruitment and retention difficulties specific to his Organisation. The Head of the IOS shall annually inform the CCR Chairman of any changes in these measures.

APPENDICES

APPENDIX 1: Definition of the notion "central government"

APPENDIX 2: Purchasing power parities and national consumer price indices

APPENDIX 3: Jobs/grades selected for the reference civil service surveys

APPENDIX 1

DEFINITION OF THE NOTION "CENTRAL GOVERNMENT"

1. General definition: that used in the Standard System of National Accounts.

2. Precise definition for the following countries:

Belgium: civil servants in Federal Ministries

Germany: civil servants in Federal Ministries

Italy: civil servants of the ministries of the Republic

Netherlands: civil servants in ministries and higher Councils of State

United Kingdom: civil servants in government departments which comprise the Ministry of Defence, the Treasury and the Foreign and Commonwealth Office. Data is supplied by the Cabinet Office for jobs in the Senior Civil Service.

APPENDIX 2

PURCHASING POWER PARITIES AND NATIONAL CONSUMER PRICE INDICES

1. Purchasing Power Parities (PPP)

1.1 Application of the PPP adjustment

The adjustment by the PPP will be put into force only if the results obtained by application of the salary adjustment method fall outside the limits of a "reference curve of purchasing power"fixed at more or less 2% around the results of the calculation of the adjustment of the PPP provided for in the paragraph below. In such case, the adjustment will be equal to the value equivalent to the upper or the lower limit of the reference curve.

1.2 Calculation of the PPP

1.2.1 The PPP referred to in Article 5.2 of the Annex, are approved by the Councils on proposal of the CCR based on the calculations by the IOS in co-operation with the Statistical Office of the European Communities (Eurostat) with reference to Brussels, and in accordance with the formulae referred to hereafter.

1.2.2 The consumption weights used for the calculations of the economic parities in June 2002 should be left unchanged throughout the lifetime of the method in order to minimise unexpected jumps in the results.

1.2.3 The results of the established PPP calculations constitute the central reference of the curve of purchasing power referred to in the 115th Report by the CCR [CCR/R(2000)4] to be calculated every year. This reference curve is obtained by enlarging the results of the PPP calculations by plus or minus 2%, margins believed to include any "statistical error", while guaranteeing a relative equality of purchasing power between duty stations. Adjustments by the method referred to in Article 5.2 are only corrected if they fall outside this reference curve.

1.2.4 A result of the salary adjustment based on the method described in Article 5.2 of the Annex which lies above the reference curve would lead to a downward adjustment to the plus 2% border of the reference curve, which means lowering the result produced by this method. A result below the reference curve would lead to an upward adjustment to the minus 2% border of the reference curve and consequently to an increase of the result reached by the method. The starting point for calculating a new salary adjustment (national CPI x reference index) will be re-based after each application.

1.3 Update of initial parities

The indices to be used to update the initial parities are the harmonised consumer price indices used by Eurostat, insofar as they are available. Failing that, the national consumer price indices will be used.

1.4 Reference towns

1.4.1 As a general rule the parity used for the country as a whole is that calculated for the capital.

1.4.2 The parities for Germany, the Netherlands and the United Kingdom are exceptions to this rule, since they are calculated by reference to Munich, The Hague and Reading respectively.

1.4.3 If, after consulting the national Statistical Institute concerned, the Secretaries/Directors General of the Co-ordinated Organisations are of the opinion that prices in another duty station in the country in question – in which a sufficient number of international civil servants is posted – differ from those in the reference town by more than 6%, a study may be undertaken to determine whether adjustments should be made to take account of relative prices levels.

2. National consumer price indices

2.1 For the seven reference countries cited below the national consumer price indices for the whole country will apply in the context of Article 4.3 of these Rules:

-- Belgium: Indice des prix à la consommation
-- Germany: Preisindex für die Lebenshaltung - Alle privaten Haushalte
-- France: Indice des prix à la consommation - Ensemble des ménages
-- Italy: Indice nazionale dei prezzi al consumo per l'intera collettività nazionale
-- Luxembourg: Indice des prix à la consommation
-- Netherlands: Prijsindexcijfers van de gezinsconsumptie - reeks voor de totale bevolking
-- United Kingdom: General retail price index

2.2 For other countries, national consumer price indices for the whole country shall be used, except for Switzerland, where the Geneva consumer price index shall be used. Other specific indices shall be used in any other country where another index has been recommended by the National Statistical Office.

APPENDIX 3

JOBS SELECTED FOR THE REFERENCE CIVIL SERVICE SURVEYS

CO-ORDINATED ORGANISATIONS

C.O. grades

BELGIUM *

FRANCE

GERMANY **

Management and Direction level

       

1. Chief Executive Officer

A7

 

Directeur d'administration centrale

 

2. Manager of Information & Press Activities

A7

 

Ministre plénipotentiaire 1ère classe

 

3. Head of Automation & Informatics Department

A6

 

Chef de service

 

4. Legal Adviser

A6

 

Maître des requêtes au Conseil d'Etat 8ème échelon

 

5. Head Computer & Telecommunications Service

A5

 

Ingénieur en Chef des Télécom. 2è éch à ingénieur général 2è cl

 

6. Head Automatic Data Processing Staff Officer

A5

 

Ingénieur de l'armement en chef 2è éch à ingénieur général 2è cl

 

7. Head of Division (Development Aid)

A5

 

Sous-Directeur admin. centrale

 

Professional specialists and administrators

       

8. Principal Scientist (Operations & Logistics)

A4

 

Ingénieur en Chef de l'armement

 

9. Assistant Legal Adviser

A4

 

Maître des requêtes au Conseil d'Etat 1er à 7ème échelon

 

10. Principal Economist

A4

 

Administrateur INSEE hors classe

 

11. Principal Internal Auditor

A4

 

Conseiller référendaire 2ème classe à 1ère classe 3è éch

 

12. Principal Programme Administrator

A4

 

Administrateur INSEE hors classe

 

13. Press Attaché (Administrative Officer)

A3

 

Attaché principal 2ème classe

 

14. Chief of Section (Budget & Cost Analysis)

A3

 

Ingénieur de l'armement

 

15. Database Administrator

A3

 

Attaché d'administration centrale

 

16. Senior Officer (Procurement)

A3

 

Attaché principal 2ème classe

 

17. Scientist

A2

 

Ingénieur météorologie 2ème classe

 

18. Accounting Officer

A2

 

Inspecteur du trésor

 

Secretariat

       

19. Secretary

B2/B3

 

Adjoint administratif principal 2ème et 1ère classe

 

20. Executive Secretary/Assistant

B4/B5

 

Secrétaire administratif cn

 

Accounts

       

21. Accountant

B3/B4

 

Adjoint administratif

 

22. Principal Accountant - Head of Section

B5/B6

 

Attaché d'administration centrale

 

General administration

       

23. Senior Clerk

B3/B4

 

Secrétaire administratif cn

 

24. Administrative Assistant

B5

 

Secrétaire administratif ce

 

25. Principal Admin. Assistant (Personnel/Organisation)

B6

 

Attaché principal

 

* Restructuration in progress. Information will be made available as soon as possible. ** Has been removed at the German delegation's request.

CO-ORDINATED ORGANISATIONS

C.O. grades

BELGIUM *

FRANCE

GERMANY **

Information technology

       

26. Programmer

B4/B5

 

Secrétaire systèmes info.et communication

 

27. Analyst/Programmer

B5/B6

 

Attaché systèmes info. et communication

 

Procurement/Contracts

       

28. Procurement Officer

B4/B5

 

Secrétaire administratif cn

 

29. Head of Procurement/Contracts Unit

B6

 

Attaché d'administration centrale

 

* Restructuration in progress. Information will be made available as soon as possible. ** Has been removed at the German delegation's request.

JOBS SELECTED FOR THE REFERENCE CIVIL SERVICE SURVEYS

CO-ORDINATED ORGANISATIONS

C.O. grades

ITALY *

LUXEMBOURG *

NETHERLANDS

UNITED KINGDOM *

Management and Direction level

         

1. Chief Executive Officer

A7

Dirigente I fascia

18

18

Band 7 - 9

2. Manager of Information & Press Activities

A7

"

17

16

Band 7 - 9

3. Head of Automation & Informatics Department

A6

Dirigente II fascia a

16 bis

16

Band 5

4. Legal Adviser

A6

"

15

15/16

Band 5

5. Head Computer & Telecommunications Service

A5

Dirigente II fascia b

15

16

Band 1 - 2

6. Head Automatic Data Processing Staff Officer

A5

"

15

16

Band 1 - 2

7. Head of Division (Development Aid)

A5

"

15

14

Band 1 - 2

Professional specialists and administrators

         

8. Principal Scientist (Operations & Logistics)

A4

Area C/3

14

14

B1/B2

9. Assistant Legal Adviser

A4

"

14

12/14

B1/B2

10. Principal Economist

A4

"

14 (15)

14

B1/B2

11. Principal Internal Auditor

A4

"

14

14

B1/B2

12. Principal Programme Administrator

A4

"

14

14

B1/B2

13. Press Attaché (Administrative Officer)

A3

Area C/2

13

12

B2/C1

14. Chief of Section (Budget & Cost Analysis)

A3

"

13

13

B2/C1

15. Database Administrator

A3

"

13

10

B2/C1

16. Senior Officer (Procurement)

A3

"

13

12

B2/C1

17. Scientist

A2

Area C/1

13

11/12

C2

18. Accounting Officer

A2

"

13

12

C2

Secretariat

         

19. Secretary

B2/B3

Area B/2

4 - 13 bis

5

E1/E2

20. Executive Secretary/Assistant

B4/B5

Area B/3

7 - 13 bis

6/7

D

Accounts

         

21. Accountant

B3/B4

Area B/2

7 - 13 bis

10/12

E1/D

22. Principal Accountant - Head of Section

B5/B6

Area B/3

7 - 13 bis

13

C2

General administration

         

23. Senior Clerk

B3/B4

Area B/2

7 - 13 bis

5/6

E1/D

24. Administrative Assistant

B5

Area B/3

7 - 13 bis

6

D/C2

25. Principal Admin. Assistant (Personnel/Organisation)

B6

Area C/1

7 - 13 bis

9/10

B2/C1

Information technology

         

26. Programmer

B4/B5

Area B/3

4 - 13 bis

D/C2

27. Analyst/Programmer

B5/B6

Area C/1

7 - 13 bis

B2/C1

Procurement/Contracts

         

28. Procurement Officer

B4/B5

Area B/3

7/8

D/C2

29. Head of Procurement/Contracts Unit

B6

Area C/1

9

B2/C1

* To be confirmed

Note 1 This document has been classified restricted at the date of issue. Unless the Committee of Ministers decides otherwise, it will be declassified according to the rules set up in Resolution Res(2001)6 on access to Council of Europe documents.
Note 2 Extract taken from document CM(2002)138.


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