The employment policy guidelines (2003-2005)

The employment guidelines 2003 lay down the priorities for structural reforms to be implemented in order to achieve the main economic objectives of the European Union (EU). For the first time, the EU relied on streamlined key policy coordination instruments -- the broad economic policy guidelines (BEPGs), the employment guidelines, and the internal market strategy -- which it gives a new three-year perspective.

ACT

Council Decision of 22 July 2003 on guidelines for the employment policies of the Member States.

SUMMARY

The decision invites the Member States to conduct their employment policies with a view to implementing the objectives and progressing towards the targets specified in the broad economic policy guidelines (BEPGs) and the internal market strategy. All these policies, applied in the medium term (three years), are part of the ten-year comprehensive strategy established at the Lisbon European Council in 2000 and revised in 2005. In the framework of the revision for 2005, the Commission presented a new proposal for a decision on the employment guidelines which will take effect as from 2006. In this decision the Council of Ministers invites the Member States to apply a macroeconomic policy with the focus on stability and growth, comprising a strict budgetary policy and a moderate growth in wages negotiated with the social partners.

The employment guidelines 2003-2005 reinforce the policy of growth by structural reform with a view to creating more and better jobs. The Council of Ministers accompanies these guidelines with recommendations addressed to all Member States concerning the most serious and urgent reforms. The employment guidelines require a gender-mainstreaming approach in implementing all actions. The decision is based on the conclusions of the Commission's communication on the future of the European Employment Strategy (EES) which aims to integrate the main points of the Lisbon strategy in the EES and to simplify and clarify its policy priorities.

Main objectives

The European Union (EU) lays down the main objectives in the field of employment, viz.:

• full employment. The Council wishes to achieve an overall employment rate of 67 % in 2005 and 70 % in 2010, an employment rate for women of 57 % in 2005 and 60 % in 2010, and an employment rate of 50 % for older workers (55 to 64) in 2010;
• improving quality and productivity at work. This objective encompasses a wide range of areas, in particular intrinsic quality at work, skills, lifelong learning and career development, gender equality, health and safety at work, flexibility and security, inclusion and access to the labour market, work organisation and work-life balance, social dialogue and worker involvement, diversity and non-discrimination, and overall work performance;
• strengthening social cohesion and inclusion. In the framework of the open method of coordination, national employment policies should promote access to employment for all women and men; combat discrimination on the labour market and prevent the exclusion of people from the world of work.

The main priorities of the structural reforms ('the 10 commandments')

In order to achieve the overarching objectives, the Council invites the Member States to implement structural reforms comprising:

• active and preventative measures for the unemployed and inactive such as ensuring that, at an early stage of their unemployment spell, all jobseekers benefit from an early identification of their needs and from services such as advice and guidance, job search assistance, a job, or other employability measure (before reaching six months of unemployment in the case of young people and 12 months of unemployment in the case of adults), modernising labour market institutions, and ensuring regular evaluation of the programmes. The Member States must include, by 2010, 25 % of the long-term unemployed in an active measure in the form of training, retraining, work practice, or other employability measure, with the aim of achieving the average of the three most advanced Member States;
• job creation and entrepreneurship with particular attention to exploiting the job creation potential of new enterprises, of the service sector and of R & D. It is also a matter of simplifying and reducing administrative and regulatory burdens for business start-ups and SMEs and for the hiring of staff, facilitating access to capital and promoting education and training in entrepreneurial and management skills;
• promotion of adaptability and mobility, social dialogue and corporate social responsibility with a view to diversifying contractual and working arrangements, and to creating a better balance between work and private life and between flexibility and security. It is also a matter of encouraging access to training, improving conditions in terms of health and safety, productivity and the quality of work. The Member States will assure the anticipation and the positive management of economic change and restructuring and access to the labour market and training. They will address labour shortages and bottlenecks by promoting occupational and geographical mobility, by implementing the skills and mobility action plan, by improving the recognition of qualifications and by greater transparency of qualifications and competencies, the transferability of social security and pension rights, the taking into account of immigration, the transparency of employment opportunities, notably thanks to the European employment network, comprising all the vacancies advertised by the Member States' employment services;
• promotion of the development of human capital, education and lifelong learning to ensure that at least 85 % of 22-year olds in the European Union should have completed upper secondary education and that the European Union average level of participation in lifelong learning should be at least 12,5 % of the adult working-age population (25 to 64 age group). National policies will aim in particular to achieve an increase in investment in human resources and a significant increase in investment by enterprises in the training of adults;
• promotion of active ageing thanks to improvement of working conditions, notably health and safety at work, access to vocational training, flexibility of work organisation, eliminating incentives for early exit from the labour market and early retirement. Member States will aim to achieve an increase by five years of the effective average exit age from the labour market (estimated at 59,9 in 2001). The increase in the labour force should also be associated with a comprehensive approach covering in particular the availability and attractiveness of jobs for all population age groups. Where necessary, the potential offered by immigration should be taken into account.
• promotion of gender equality by reducing gender gaps in employment rates, unemployment rates and pay. The gender pay gap must be reduced by addressing sectoral and occupational segregation, job classifications and the different pay systems, and by improving transparency and access to education and training. It is also a matter of reconciling work and private life by increasing the number of childcare facilities so as to provide childcare by 2010 to at least 90% of children between three years and the mandatory school-leaving age and at least 33% of children under three years of age;
• integration of and combating discrimination against people at a disadvantage on the labour market, notably early school leavers, low-skilled workers, people with disabilities, immigrants and ethnic minorities. The objective of the Member States will be to reduce by 2010 the proportion of early school leavers to 10% (maximum average for the EU) and to reduce the unemployment gaps for people at a disadvantage and for third country nationals, according to any national targets;
• tax and financial incentives to enhance work attractiveness by reducing the number of working poor and, where appropriate, by eliminating unemployment, poverty and inactivity traps, and by encouraging participation in the labour market of disadvantaged groups by re-examining or reforming the tax and benefit systems. Member States will ensure effective management of social protection benefits, including the link with effective job search, support for employability, and, where appropriate, the elimination of inactivity traps. By 2010 they will reduce high marginal effective tax rates and, where appropriate, the tax burden on low paid workers;
• transformation of undeclared work into regular employment by striking a balance between simplification of the business environment (appropriate incentives in the tax and benefits system) and the application of sanctions to ensure that the law is respected;
• addressing regional employment disparities notably by developing the potential for job creation at the local level and partnerships between all relevant actors. The Member States will promote favourable conditions for private sector activity and investment and will focus public support on investment in human capital and the creation of suitable infrastructures (see also the BEPG guidelines 18 and 19), thanks mainly to the support of the Cohesion Fund, the Structural Funds and the European Investment Bank.

Implementation of the EES is a matter for the Member States. To ensure consistent management of this process, it is important to involve the national parliaments, the social partners and other national, regional and local bodies which are competent in the field of employment. The social partners will be involved in the effective implementation of the employment guidelines at national, interprofessional and sectoral level. Adequate allocation of financial resources will be ensured via transparency and cost-effectiveness as well as the sound use of financial support on the part of the Structural Funds, in particular the European Social Fund (ESF).

RELATED ACTS

Council Decision of 4 October 2004 on guidelines for the employment policies of the Member States. [Official Journal L 326 of 29.10.2004]. The guidelines defined in Council Decision No. 578/2003 have been maintained.

Council Decision of 18 February 2002 on guidelines for Member States' employment policies for the year 2002. [Official Journal L 60 of 01.03.2002]. The most important innovation in 2002 was the introduction of a new horizontal objective relating to the quality of employment and the intermediate objectives adopted by the Stockholm European Council concerning the employment rates to be achieved in 2005 and included in successive guidelines.

Council Decision of 19 January 2001 on Guidelines for Member States' employment policies for the year 2001 [Official Journal L 60 of 01.03.2002]. This Decision introduces the new comprehensive employment policy strategy adopted at the Lisbon European Council, while keeping the original four pillar structure intact (entrepreneurship, employability, adaptability and equal opportunities). The Lisbon Summit aims to raise the employment rate from 62.2% in 1999 to 70% in 2010 (and to over 60% for women). The social partners are more closely involved in implementing and monitoring the employment guidelines. With an eye to consistency, common themes have been reclassified, for example in the case of the "employability" pillar, which includes the guidelines on education and lifelong learning. A stronger focus has also been placed on tackling discriminatory aspects of the labour market in order to reinforce the link with social inclusion. The provisions on older workers have been widened from the tax-benefit aspect to a more comprehensive set of policies in support of active ageing.

Council Decision (EC) No 2000/228 of 13 March 2000 on guidelines for Member States' employment policies for the year 2000 [Official Journal L 072 of 21.03.2000].

Last updated: 04.10.2005