MINISTERS’ DEPUTIES

CM Documents

CM(2020)141

28 October 2020[1]

1391st meeting, 8 December 2020 11 Programme, Budget and Administration   11.2 Co-ordinating Committee on Remuneration (CCR) – a. Annual adjustment of salaries for staff of the co-ordinated organisations at 1 January 2021 – 272nd report Item to be considered by the GR-PBA at its meeting on 24 November 2020

 

ANNUAL ADJUSTMENT OF SALARIES FOR STAFF OF THE CO-ORDINATED ORGANISATIONS

AT 1 JANUARY 2021

CCR Report (272^nd Report)

1.         Introduction

The Annex to the 244^th Report by the Co-ordinating Committee on Remuneration [CCR/R(2016)7[2]] sets out the provisions for the annual adjustment of salaries of all categories of staff of the Co-ordinated Organisations at 1 January. The proposal by the Secretaries/Directors‑General for the adjustment, with effect at 1 January 2021 [cf. CCR/CRSG/CRP/WD(2020)14], has been drawn up in accordance with the procedure in force and in compliance with the Addendum to the 244^th Report[3].

2.         Results of the application of the procedure

2.1          The application of the procedure, as proposed by the Secretaries/Directors-General, results in the salary adjustment indices presented in Annex 1, applicable at 1 January 2021 to salary scales in force at 31 December 2020.

2.2          Those Organisations having approved the 269^th Report by the CCR [CCR/R(2020) [4]] concerning the exceptional adjustment calculated according to Article 7 of Annex 1 to the 244^th Report, applicable at 1 February 2020 in Turkey, shall take account of the deduction of the special adjustment, in order to arrive at the final annual adjustment for this duty country (see Annex 1a).

2.3       The Organisations may apply the Affordability Clause referred to in Article 6 of the Annex to the 244^th Report, in accordance with the text approved by their Governing body.

3.         Conclusions

3.1       Position of the CCR

3.1.1      The CCR makes the recommendation to implement the salary adjustments due to come into effect from 1 January 2021, as it is obliged to do and as is detailed in the Report. At the same time, some CCR delegations want to express their concerns about the level of these salary increases. It must be said that they are entirely in accordance with the Salary adjustment method agreed within Co-ordination. But some CCR delegations are concerned that the increases come at a time when all member country economies are under the severest pressure as a result of the Covid-19 pandemic. Having examined the legal position, the CCR can do little more at this point than urge the Co-ordinated Organisations to examine carefully whether their Affordability Clauses will permit the postponement of all or part of the increases.

3.1.2      The CCR is aware the Salary adjustment method now in place will very likely, in due course, reflect the salaries for the national civil servants of the eight reference countries which may well tend to decline in real terms as a result of the crisis and that this will eventually be reflected in the reference indexes applied to the staff of the Coordinated Organisations. It remains a concern, however, for CCR delegates that it will take some time for this aspect of parallelism to take effect - approximately eighteen months - and that in the meantime the increases to come into effect on 1 January 2021 do not reflect the urgency of the general economic situation caused by the pandemic and give the unfortunate impression that the staff of the Co‑ordinated Organisations are somehow immune from the general economic malaise. This causes difficulties in the member countries of the Organisations and may tend to reflect badly on the Organisations and the process of Co-ordination. As discussions on a new or revised Salary adjustment method continue, the CCR will be seeking ways of permitting the Co-ordinated Organisations to reflect more rapidly and effectively the general state of member countries' economies. One means of doing so will be by a detailed examination of the content of an Affordability Clause or similar clause, on which the CCR is ready to negotiate in an equitable manner with the other committees participating in Co‑ordination.

The above position is endorsed by the following member countries: Belgium, Canada, France, Korea, Mexico, Netherlands, Spain and United Kingdom.

Statement of the Italian delegation on Salary adjustment for the year 2021:

3.1.3      Italy would like to express its strong dissatisfaction with the current Salary adjustment methodology and for this reason, in 2019, Italy finalised a proposal for a revised methodology that is still under discussion in the CCR.

3.1.4      For the year 2021, the current system provides for a substantial salary adjustment in the Co‑ordinated Organisations (CO) based on criteria that do not allow taking into account the existing severe economic downturn due to the current health emergency.

3.1.5      This situation is undoubtedly the result of an exceptional and unpredictable event leading several countries in and outside the Eurozone to a significant decrease in the Gross Domestic Product (GDP) in 2021.

3.1.6      Considering the automaticity of the mechanisms of the CCR recommendations on the salary adjustment in the CO, Italy notes the impossibility for the CCR Report to allow exceptions or deviations.

3.1.7      Nevertheless, national budgetary constraints as a result of the Covid-19 pandemic and a strongly opposed public opinion play an important role in these circumstances. After careful consideration, Italy has therefore decided to abstain for a complex number of reasons and for consistency with the position usually adopted on this matter in the course of the last few years.

3.1.8      The Governing bodies in each CO have the right to discuss the possible activation of the Affordability Clause for the postponement or partial awarding or non-awarding of the salary increases for the year 2021, based on a careful economic and legal assessment and associated risks.

3.2       Position of the CRSG

3.2.1      The current context is challenging and the CRSG appreciates the political sensitivity of the topic. At the same time, it is worth remembering that the method in place was designed with the aim to ensure a close link between salary evolutions in the National Civil Services of the reference countries and in the Co‑ordinated Organisations (CO).

3.2.2      The current method is by definition retrospective in its approach, since it is based on reference periods which extend to the past more than a year back in time. Accordingly, the adjustment mirrors what has already happened at national level in the preceding year in the reference countries.

3.2.3      The salary adjustment is calculated from the data provided by eight reference countries on the evolution of the disposable income of National Civil Service staff, which ensures adherence to the principle of parallelism with National Civil Services in these member countries.

3.2.4      Moreover, the moderation clause that is part of the method fully achieves its purpose and limits the increase significantly. The reference index is therefore in fact lower than the average evolution in the disposable income in the National Civil Services of the reference countries.

3.2.5      Finally, the method takes into account the particular constraints of CO having to operate in a variety of countries with a multinational staff, in accordance with the requirements of their respective member countries.

3.2.6      The CRSG welcomes the CCR recommendation, which not only reflects the strict application of the Salary adjustment method set out in the 244^th Report and its Addendum, but also ensures in broader terms a continuing close link with the evolution of civil service salaries at national levels.

3.3       Position of the CRP

3.3.1     The CRP notes the results of the calculations for the salary adjustments at 1 January 2021. These results reflect the application of the Salary adjustment method – including the impact of the Addendum to the 244^th Report – as approved by the Governing bodies of all Co-ordinated Organisations.

4.         Recommendations

            The Co-ordinating Committee on Remuneration recommends that Governing bodies:

(a)      approve, subject to the provisions of Article 6 of the 244^th Report by the CCR, as adopted by each of the Co-ordinated Organisations, the salary scales at 1 January 2021 resulting from the application of the adjustment indices set out in Annex 1 (cf. salary scales per country are found in Annex 4 to this report);

(b)      note that, in accordance with the interpretation given to paragraph 3 of the 34^th Report by the CCG [CCG(65)5] dated 25 October 1965, at its 77^th Session on 29 June 1966 [cf. CCG/M(66)6], the salary of auxiliary staff serving in the Co-ordinated Organisations will be adjusted in the same proportions as that of permanent staff, when applicable.

David Sydney Maddicott

Chairman

(Paris, September 30, 2020)

ANNEXES

Pages

Annex 1...... CO salary adjustment indices per duty country at 1 January 2021......................................... 6

Annex 1a.... Effect of the deduction of special adjustments to the annual adjustment indices

.................. at 1 January 2021 .............................................................................................................. 7

Annex 2...... Reference index at 1 July 2020........................................................................................... 8

Annex 2a.... Trend of net NCS remuneration in real terms for the period

 ................. 1 July 2019 to 1 July 2020 ................................................................................................. 9

Annex 2b.... Non-double-counting clause

 ................. Assessment of the impact of the changes in comparable social contributions in the NCS

.................. and in the CO over the last three-year period .................................................................... 10

Annex 3...... Purchasing power parities at 1 July 2020........................................................................... 11

Annex 4...... Salary scales proposed at 1 January 2021......................................................................... 12

ANNEX 1

CO-ORDINATED ORGANISATIONS

SALARY ADJUSTMENT INDICES PER DUTY COUNTRY AT 1 JANUARY 2021

NOTE:    ¹Country concerned by a special adjustment to be deducted (see Annex 1a).

ANNEX 1a

EFFECT OF THE DEDUCTION OF SPECIAL ADJUSTMENTS

TO THE ANNUAL ADJUSTMENT INDICES AT 1 JANUARY 2021¹

(Articles 5 and 7 of the Annex to the 244^th CCR Report)

¹ Applicable in the Organisations which have approved the exceptional adjustment recommended by the CCR

with effect for Turkey as of 1 February 2020.

ANNEX 2

REFERENCE INDEX AT 1 JULY 2020

NOTES:

¹ Marital status: single staff

² The reference index is calculated as the moving average covering two reference periods, with a weight of two-thirds for the reference period and a weight of one-third for the preceding reference period, as defined in Article 4.1.3 of the Annex to the 244^th Report.

³ The three year assessment of the non double-counting clause (see Appendix 6 of Annex to the 244^th Report) shows a negative impact on changes in social contributions of NCS remunerations (-0.58%) and a negative one for those in the CO (-1.41%). The common negative denominator is -0.58% and, therefore a correction of +0.58% has to be made to the reference index under this clause for this year.

The overall final reference index is rounded to one decimal point.

ANNEX 2a

TREND OF NET NATIONAL CIVIL SERVICE REMUNERATION IN REAL TERMS

FOR THE PERIOD 1 JULY 2019 TO 1 JULY 2020

(i.e. evolution of disposable income of NCS staff once the respective national inflation is removed)

NOTES:

¹ For Spain, the reference period means the calendar period 31 December to 31 December of the year preceding the end of the reference period in the other reference countries, as set out in the Annex to the 244^th Report [CCR/R(2016)7].

² Marital status: single staff.

ANNEX 2b

NON-DOUBLE-COUNTING CLAUSE

Assessment of the impact of the changes in comparable social contributions in the NCS

and in the CO over the last three-year period

(Annex to the 244^th Report by the CCR, Article 4.1.6.5 and Appendix 6)

ANNEX 3

PURCHASING POWER PARITIES

1 JULY 2020

NOTES:

¹ Exchange rates from local currencies to Euros     

² Geographic index = PPP ÷ Exchange rate x 100

ANNEX 4

COUNCIL OF EUROPE

SALARY SCALES PROPOSED AT 1 JANUARY 2021

Australia ..............................................................................................  13

Austria

Belgium ...............................................................................................  14

Canada

Denmark  .............................................................................................  15

Finland

France .................................................................................................  16

Germany

Greece ................................................................................................  17

Hungary

Iceland ................................................................................................  18

Ireland

Italy .....................................................................................................  19

Japan

Korea  .................................................................................................  20

Luxembourg

Mexico ................................................................................................  21

Netherlands

New Zealand ........................................................................................  22

Norway

Poland ................................................................................................  23

Portugal

Spain ..................................................................................................  24

Sweden

Switzerland ..........................................................................................  25

Turkey

United Kingdom ...................................................................................  26

United States

Single salary spine for Belgium .............................................................  27

SINGLE SALARY SPINE FOR BELGIUM

The salary scale presented below is of relevance to those organisations implementing the single salary spine which will represent an identical pay structure in all countries based on the Belgian salary scale, adjusted by purchasing power parities so as to ensure equivalent purchasing power in each duty country.