Publications

The Employment and Labour Market Committee (ELC), established by a Council
Decision on 20 December 1996, held its inaugural meeting in Brussels on 29
January 1997. The ELC was created in response to a request by the European
Council for the setting up of a stable structure to support the work of the
Labour and Social Affairs Council in employment-related matters. This area
has taken on a new dimension in the context of the" European employment
strategy" outlined at the European Council in Essen in December 1994. The ELC
is expected to improve the balance between employment, on the one hand, and
economic and monetary issues, on the other hand, in the European debate. The
new Committee will fulfil a similar role to that of the Economic Policy
Committee which provides advice to the Economics and Financial Affairs
Council (ECOFIN).

The Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund,
ÖGB) and the Austrian Chamber of the Economy (Wirtschaftskammer Österreich,
WKÖ) agreed the outlines of a reform of the apprenticeship system on 1 March
1997. The precise details are to be agreed in a working group comprising
officials of the social partners, the Ministry of Labour, the Ministry of the
Economy, and experts from other, as yet unspecified, organisations.

At the beginning of February the Confederation of British Industry (CBI) set
out its long term priorities for beyond the forthcoming general election. Its
director general, Adair Turner said that "whatever happens between now and
May, there are fundamental issues for business which need attention. The
changing nature of the world in which we do business brings both
opportunities and challenges, and the CBI should be at the heart of change."

The statutory minimum wage in Luxembourg has been increased by 3.2% from 1
January 1997, as a result of legislation, and additionally by 2.5% from 1
February 1997, under the terms of an index-linked mechanism.

Following the freezing of civil servants' salaries imposed by the Government
for 1996, the Government announced the convening of pay negotiations which
have been continually put off since the spring of 1996, but which will now
not take place at all.

Employers and unions want to reduce the amount of temporary recruitment and
the number of types of employment contract. They also want to increase their
freedom to negotiate labour market issues through collective bargaining.
These are the key issues in the current debate over a new round of labour
market reforms in Spain.

In January 1997, the European Commission adopted a report on the Promotion of
Participation by Employed Persons in Profits and Enterprise Results,
including equity participation (PEPPER II). The report suggests that
profit-sharing schemes lead to higher productivity, whatever method, model
specification and data are used. The macroeconomic situation was found to
have little effect on government or social partner support for such schemes,
but recent debates relating to enhancing productivity and wage flexibility
are stimulating discussions on proposals. However, in most member states,
trade unions can be expected to oppose the use of financial participation
schemes to promote wage flexibility.

As the 1 May election date draws nearer, both the Conservative Government and
the main opposition party, Labour, have begun to fight their campaigns by
taking opposite stances on the social policy Agreement annexed to the
Maastricht Treaty on European Union - the so-called "social chapter", from
which the UK has "opted out". In February, the Government launched an attack,
stating that if the Labour Party were to win the general election, its
commitment to "signing up" to the social chapter would cost the UK 500,000
jobs.

A recent decree-law issued by the Government has increased the national
minimum wage from 1 January 1997. The monthly rates have risen by up to 5%.
We review Portugal's minimum wage system and the reactions to, and
implications of, the 1997 increase.

Recently-announced plans by banks to levy service charges on the accounts
into which employees' salaries and wages are paid, have resulted in trade
union protests and the dropping of the proposals.