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MINISTERS’ DEPUTIES |
CM Documents |
CM(2024)47 |
23 February 2024[1] |
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1494th meeting, 5 April 2024 11 Programme, Budget and Administration
11.3 Co-ordinating Committee on Remuneration (CCR) Activity Report for 2023 Item to be considered by the GR-PBA at its meeting on 19 March 2024 |
I. Introduction
1. Co-ordination was created in 1958 and today it includes six international organisations: the Council of Europe (CoE), the European Centre for Medium-Range Weather Forecasts (ECMWF), the European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT), the European Space Agency (ESA), the North Atlantic Treaty Organization (NATO) and the Organisation for Economic Co-operation and Development (OECD). These Organisations employ more than 16 200 staff members and over 9 000 former staff or their dependants receive a pension from the Co-ordinated Pension Scheme. At 1 January 2022, 57 countries were members of the Co‑ordinated Organisations (COs). In addition to the six COs, a further 30 international organisations have Associated Organisation status. They employ over 13 000 staff members and are informed of the activities of Co-ordination but have no right to take part in negotiations.
2. Co‑ordination was created in order to relieve the Governing bodies of the COs of the need to set the remuneration and pensions of their staff individually. The system operates on the basis of tripartite discussions among three committees: the Co‑ordinating Committee on Remuneration (CCR), made up of national delegates of the member countries of the Organisations, the Committee of Representatives of the Secretaries/Directors-General (CRSG), comprising representatives of the Secretaries/Directors-General of the Organisations, and the Committee of Staff Representatives (CRP), composed of staff representatives of the Organisations.
II. The Committees
3. At the June 2015 session of Co-ordination, I was elected Chair of the CCR for an initial three‑year period beginning on 1 July 2015. Since 2018, I have been re-elected for one-year terms until 30 June 2022. During the September 2021 Co-ordination session, the CCR agreed that a simplified election process could be used for the election of the CCR Chair and decided to amend its rules of procedure accordingly. In accordance with the new procedure, I was reappointed until 30 June 2023 and again until 30 June 2024. At the September 2023 session I informed delegates of my availability to stand again as the CCR Chair, with the support of the UK delegation. Since no other application has been received by the due date of 31 December 2023, my term of office shall be automatically extended by one year from 1 July 2024 to 30 June 2025. Such extension shall be formally recorded at the June 2024 session.
4. Ms. Marianna Fucci (Italy), Vice-Chair and Legal Adviser to the CCR, was elected from 1 January 2020 for a mandate of two years. She was re-elected in June 2021 and again in September 2023 for another two‑year term, from 1 January 2024 to 31 December 2025.
5. At their 20 June 2022 meeting, the Executive Directors agreed to extend the current term of Mr Christian Overbeck (ESA) as CRSG Chair and of Ms Floricica Olteanu (NATO) and Mr Jean-Pierre Couchinave (OECD) as CRSG Vice-Chairs for another two years, starting from 1 January 2023.
6. In June 2023, Mr. Samuel Quesada‑Ruiz (ECMWF) was elected CRP Chair and Mr. Stanislas Frossard (Council of Europe) was elected CRP Vice-Chair, while Ms. Isabelle Conway (ESA) was re-elected CRP Vice‑Chair.
7. In 2023, there were three Co-ordination sessions where the committees met separately, as well as in bilateral and tripartite meetings.
8. Throughout 2023, the ISRP provided technical and administrative assistance in the area of remunerations and pensions, and prepared the working documents that form the basis of the work of Co‑ordination.
9. The activities of the Committees gave rise to twenty CCR reports with recommendations that were submitted to the Governing bodies of the six COs (see the list of reports in the Annex).
10. With the regards to the recommendations adopted in the first half of the year, in view of the particular economic situation with high inflation rates, the CCR reports were mainly focused on the special adjustment of salaries, the allowances/supplements expressed in absolute value and the ceilings of the installation allowance for staff deployed in Hungary, Türkiye, Poland, Lithuania, Latvia, Austria, Estonia and the United Kingdom.
11. The second half of the year was devoted to the three-year review of the daily subsistence allowance (DSA), of the ceilings of the installation and education allowance at 1 January 2024; the review of the Co‑ordinated Organisations salary scales for Türkiye and Hungary; the introduction of an exceptional temporary measure applicable in case of very high inflation in Türkiye, as well as regular and recurrent topics such as the annual adjustment of salaries and allowances.
IV. Ongoing discussions
12. The CCR focused its discussions throughout the year on revising the Salary Adjustment Method (SAM) for 2026. The CCR has already reached agreement on some of the basic elements of the SAM, such as parallelism with the national civil services of the eight reference countries, comparisons based on net salary, real movements in salaries, and a duration of four years with two possible extensions of one year each. The subject most discussed was that of Purchasing Power Parities (PPP). It was agreed that the Council of Europe and the OECD will have the option of neutralising the effect of PPPs for staff in their organisations from 1 January 2026. This option, once made, will be valid for the whole duration of the new SAM.
V. Main activities
A. Special adjustments of salaries, allowances/supplements expressed in absolute value and the ceilings of the installation allowance
13. The salary adjustment method [280th Report, CCR/R(2021)4] provides for a special adjustment of salaries when the consumer price index in a country shows an increase of more than 7% over three consecutive months since the beginning of the reference period from July 1 of year n to July 1 of year n+1. A similar provision was included in the adjustment methods for allowances/supplements expressed in absolute value [242nd Report, CCR/R(2016)5] and installation allowance [229th Report, CCR/R(2014)4]. The CCR therefore recommended a special adjustment of 7% for the staff posted in the countries mentioned below.
i. For Hungary at 1 October 2022 (321st Report) and at 1 February 2023 (324th Report) [CCR/R(2023)1 and CCR/R(2023)4]
ii. For Türkiye at 1 October 2022 (322nd Report), at 1 January 2023 (323rd Report), at 1 March 2023 (327thReport) [CCR/R(2023)2, CCR/R(2023)3 and CCR/R(2023)7]
iii. For Poland at 1 February 2023 (325th Report) [CCR/R(2023)5]
iv. For Lithuania at 1 March 2023 (326th Report) [CCR/R(2023)6]
v. For Latvia at 1 April 2023 (328th Report) [CCR/R(2023)8]
vi. For Austria at 1 May 2023 (329th Report) [CCR/R(2023)9]
vii. For Estonia at 1 May 2023 (330th Report) [CCR/R(2023)10]
viii. For the United-Kingdom at 1 May 2023 (331st Report) [CCR/R(2023)11]
B. Exceptional temporary measure applicable in case of very high inflation in Türkiye, 337th Report [CCR/R(2023)17]
14. In its 283rd Report [CCR/R(2022)1], the CCR endorsed the CRSG time-limited proposal which ended in June 2022, to take urgent measures to protect the purchasing power of staff members of the Co‑ordinated Organisations serving in Türkiye. The time-limited measure recommended by the CCR resulted in seven reports during the reference period, demonstrating that it was genuinely necessary. As a consequence, the temporary measure was extended for one year, from 1 July 2023 to 1 July 2024. Whenever, within the reference period spanning from 1 July 2023 to 1 July 2024, a national month-on-month consumer price trend shows an increase of more than 7%, the CCR will send a recommendation to Governing bodies of the Co-ordinated Organisations providing for an exceptional and temporary adjustment of salaries, allowances/supplements expressed in absolute value and of the installation allowance ceilings applicableto that country. This exceptional adjustment granted will be equivalent to the overall inflation trend measured from the inflation monitoring reset point.
August 2023, 337th Report and September 2023, 240th Report [CCR/R(2023)17 and CCR/R(2023)20]
15. In Türkiye, the month-on-month increase in the official cost-of-living index rose by more than 7% in August 2023 (9.5%) and September (9.1%). Therefore, the CCR recommended to Governing bodies that the salaries, allowances/supplements expressed in absolute value and installation allowance ceilings for all categories of staff posted in Türkiye be increased by 9.5% and 9.1% respectively from 1 August and 1 September.
C. Annual salary adjustment at 1 January 2024, 332nd Report [CCR/R(2023)12]
16. The provisions governing the annual salary adjustment of all categories of staff of the Co-ordinated Organisations at 1 January 2024 are set out in Annex 1 to the 280th Report. The proposal for the adjustment with effect at 1 January 2024 submitted by the Secretaries/Directors-General has been drawn up in accordance with the procedure to come into effect on 1 January 2024, once adopted by the Governing bodies of the Co-ordinated Organisations.
D. Annual adjustment of the allowances/supplements expressed in absolute value at 1 January 2024, 333rd Report [CCR/R(2023)13]
17. In accordance with the adjustment method of the 242nd Report [CCR/R(2016)5], the CCR adopted the 320th Report on the adjustment of allowances/supplements expressed in absolute value at 1 January 2024. The annual adjustment of the monthly amounts in force in Belgium corresponds to the weighted average of the percentage changes, during the reference period, in the monthly amounts of the dependent child allowance in the reference countries covered by the salary adjustment method set out in Annex 1 of the 280th Report, namely Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain and the United Kingdom. For the other countries, the amounts were calculated by applying purchasing power parities to the amounts for Belgium.
18. It should be noted that in accordance with Article 6.4 of the adjustment method for allowances/supplements expressed in absolute value, the special adjustments to allowances/supplements expressed in absolute value on 1 October 2022 for Hungary and Türkiye, on 1 January 2023 for Türkiye, on 1 February 2023 for Hungary and Poland, on 1 March 2023 for Türkiye and Lithuania, on 1 April 2023 for Latvia, and on 1 May 2023 for Austria, Estonia and the United Kingdom, are deducted from the final amounts of the allowances/supplements applicable at 1 January 2024 for these duty countries (see column 3 of Annex 1a and 1b).
E. Adjustment of the daily subsistence allowance (DSA) rates at 1 January 2024, 334th Report [CCR/R(2023)14]
19. In accordance with the 268th Report issued on 18 June 2020, the level of the DSA rates is to be established on the basis of the average of the relevant rates in force in the National Civil Services (NCS) of the eight reference countries. The rates will be applicable as from 1 January 2024 until 31 December 2026.
F. Adjustment of the ceilings of the installation allowance at 1 January 2024, 335th Report [CCR/R(2023)15]
20. The rules governing the installation allowance ceilings for staff of the Co-ordinated Organisations (COs) are set out in the 229th Report by the CCR [CCR/R(2014)4]. Article 7 of the Annex to the 229th Report by the CCR provides that the ceilings of this allowance established as of 1 January 2015 shall be assessed every three years. Accordingly, the rates proposed as from 1 January 2024 for Belgium have been reviewed in accordance with the provisions of the method in force by reference to the evolution of similar allowances in the civil services of the eight reference countries, as set out in Appendix 2 of the Annex to the 229th Report by the CCR. For the other countries, the purchasing power parities have been applied to the revised ceilings for Belgium in order to ensure equivalency of the ceilings for this allowance in each CO duty country.
G. Adjustment of the ceilings of the education allowance at 1 January 2024, 336th Report [CCR/R(2023)16]
21. In accordance with the prevailing rules on the Education allowance (EDU), set out in the 276th Report, every three years starting from 1 January 2021, the average evolution of school fees is to be compared to the evolution of the EDU ceilings based on the dependent child supplement (DCS) over the same time period. If the difference between the two factors shows a gap equal or above 9%, the ceilings are then re-adjusted by the magnitude of such difference. As a result, the countries for which a review of the EDU ceilings is applicable at 1 January 2024 are only Türkiye (positive multiplier), Ireland and Luxembourg (negative multiplier).
H. Updated Co-ordinated salary scale for staff in Türkiye and Hungary, 338th and 339th Reports [CCR/R(2023)18, CCR/R(2023)19]
22. The CRSG tasked the ISRP with a salary level study in Türkiye and Hungary, to assess any loss in the competitiveness of the salary scales in force. Both the Council of Europe and NATO have staff members posted in Türkiye and Hungary. The OECD only in Türkiye. In June 2023, the CRSG reported to the CCR on the matter, based on the findings of an initial salary benchmark study carried out by the ISRP. The study was updated and a formal proposal was presented at the September 2023 session of the Co-ordination, in order to take into account the salary adjustment index for Türkiye and Hungary resulting from the 2024 adjustment of salaries of staff of the Co-ordinated Organisations (COs), as well as the most up to date review of salaries among the comparators. The salary scales have been updated. The CCR has taken due note of the CRSG proposal concerning the salary scale for staff based in Türkiye and Hungary and the difficulties encountered by the Co-ordinated Organisations with staff posted in these countries. While wishing to bring rapid solutions to the Organisations, the CCR has stressed that the process followed to update the salary scale for staff based in Türkiye and Hungary would not constitute a precedent. In addition, the CCR recommended the granting of a temporary and pensionable special allowance for salaries of A and L grades (or the equivalent on the SSS) until a long-term solution is found and at the latest at the end of the period of validity of the salary adjustment method currently in force.
VI. 2024 Programme of Work
23. The CCR will continue the in-depth discussion on the new SAM for 2026.
24. In addition to the recurrent topics such as the annual adjustment of salaries and allowances/supplements, the balance sheet of the Co-ordinated Pension Scheme, the CCR will discuss the Co-ordinated Pension Scheme staff contribution rate.
VII. Conclusions
25. 2023 has seen a return to more normal working for the CCR, following what we hope will prove to be the worst of the Covid pandemic. Meetings are now held mostly in person and I think this is a much better way of doing business. Somebody told me that in their organisation many meetings that had previously been held in person were now conducted virtually, even now the peak of the Covid crisis was over. My view is that this may be alright in an organisation where everybody is (one hopes) on the same side, so to speak. Co-ordination is a negotiating forum involving three committees, often with very different interests and viewpoints. Face-to-face meetings are a much better way of conducting negotiations and will produce better results and probably deliver them more quickly as delegates will not only be able to assess other delegates’ interventions better in a face-to-face environment but can also take advantage of discussions in the margins to clarify and resolve issues. We will continue to make provision for remote
participation for those delegates whose serious medical constraints prevent them from attending in person. But I urge delegates not to participate remotely unless absolutely necessary.
26. The CCR has, over 2023 and 2022, shown itself to be capable of reacting quickly to circumstances affecting the Co-ordinated Organisations. This is demonstrated by its agreeing a large number of recommendations on salary adjustments needed in cases of high and very high inflation and in making adjustments to the salary scales of staff in Türkiye and Hungary. We will continue to try to get the CCR to function in as efficient a way as possible. In light of the fact that, unlike the other committees, the CCR has no meetings between Co-ordination meetings, the next Co-ordination meeting will therefore be CCR-only for the first day and will, we hope, enable the CCR to reach consensus on a number of issues before it meets participants from the other committees on the second and third days.
27. The principal topic for the CCR’s consideration during 2023 has been the next SAM, due for implementation from 1 January 2026. The CCR has set a target of making a recommendation to the Co‑ordinated Organisations at the latest by the end of the February meeting of 2025 and preferably sooner. The CCR’s has been able to reach early agreement on a number of topics (see para 12 above). The most salient of these is agreement that two Co-ordinated Organisations (the Council of Europe and the OECD), both of which have the vast majority of their staff based in France, can decide if they wish to opt out of applying PPP coefficients based on using Brussels as a base city. They would have to implement this neutralisation of PPP for the complete duration of the SAM. PPP would still be an obligatory element within each organisation, meaning that the few staff in the two organisations concerned who do not work in France would have their salaries adjusted to give them the same purchasing power (within the +/- 2% corridor) as their colleagues in Strasbourg and Paris.
28. It has been important to reach agreement on this element of the SAM (a failure to agree could have meant both organisations seriously considering their membership of Co-ordination) and the CCR is glad to have the CRSG’s support on the matter. The CRP remains opposed to PPP neutralisation and, at CRP urging, the CCR carefully considered its legal advice on the proposal.
29. Giving a degree of adaptability to the Co-ordinated Organisations (only two of them in this case of PPP neutralisation) may point a way forward for Co-ordination more generally. The question in the medium and longer term will be how to balance the advantages this kind of adaptability can bring to one or more organisations with the overall benefits of a co-ordinated system. I remain optimistic that this balance can be struck.
30. While much has been agreed, a number of elements in the SAM remain that will need discussing and assessing or reassessing by the CCR. These include the Moderation Clause, the Exception Clause and also the suggestion that there be a mechanism for the adjustments to salaries in the case of very high inflation, beyond the existing framework to address the case of high inflation.
31. I am delighted to say that it seems I will be re-elected next June for a further year to end of June 2025. I thank the UK delegation for endorsing my candidature and the CCR delegates for continuing to entrust me with this role as Chair. I also owe a good deal of thanks to the ISRP’s diligence and support. I remain committed to supporting the CCR and Co-ordination more widely.
LIST OF CCR REPORTS ADOPTED IN 2023
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321st CCR Report |
Special adjustments at 1 October 2022 for Hungary |
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CCR/R(2023)2 |
322nd CCR Report |
Special adjustments at 1 October 2022 for Türkiye |
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CCR/R(2023)3 |
323rd CCR Report |
Special adjustments at 1 January 2023 for Türkiye |
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CCR/R(2023)4 |
324th CCR Report |
Special adjustments at 1 February 2023 for Hungary |
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CCR/R(2023)5 |
325th CCR Report |
Special adjustments at 1 February 2023 for Poland |
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CCR/R(2023)6 |
326th CCR Report |
Special adjustments at 1 March 2023 for Lithuania |
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CCR/R(2023)7 |
327th CCR Report |
Special adjustments at 1 March 2023 for Türkiye |
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CCR/R(2023)8 |
328th CCR Report |
Special adjustments at 1 April 2023 for Latvia |
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CCR/R(2023)9 |
329th CCR Report |
Special adjustments at 1 May 2023 for Austria |
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CCR/R(2023)10 |
330th CCR Report |
Special adjustments at 1 May 2023 for Estonia |
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CCR/R(2023)11 |
331st CCR Report |
Special adjustments at 1 May 2023 for the United-Kingdom |
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CCR/R(2023)12 |
332nd CCR Report |
Annual adjustment of salaries at 1 January 2024 according to the 280th CCR Report |
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CCR/R(2023)13 |
333rd CCR Report |
Annual adjustment of the allowances/supplements expressed in absolute value at 1 January 2024 |
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CCR/R(2023)14 |
334th CCR Report |
Adjustment of the daily subsistence allowance rates at 1 January 2024 |
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CCR/R(2023)15 |
335th CCR Report |
Adjustment of the ceilings of the installation allowance at 1 January 2024 |
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CCR/R(2023)16 |
336th CCR Report |
Adjustment of the ceilings of the education allowance at 1 January 2024 |
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CCR/R(2023)17 |
337th CCR Report |
Exceptional temporary measure applicable in case of very high inflation in Türkiye |
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CCR/R(2023)18 |
338th CCR Report |
Updated Co-ordinated salary scale for staff in Türkiye applicable as from 1 January 2024 |
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CCR/R(2023)19 |
339th CCR Report |
Updated Co-ordinated salary scale for staff in Hungary applicable as from 1 January 2024 |
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CCR/R(2023)20 |
340th CCR Report |
Exceptional adjustments at 1 September 2023 for Türkiye |