Monitoring staff workflow

Is there software we can install to monitor staff working, a have had a few that are currently using worktime to do alot of personal items such as browsing facebook, holidays and generally not working. THIS IS COMPANY PROPERTY therefore in the contract not to be used.

In my country (and I think in all EU) is almost always illegal to monitor the use that employees make of their PCs. In alternative one can monitor external logs (ip, url, bandwidth, etc) of a firewall and in case blocking them.

Why not block some of these things at the perimeter network? Firewall, content filter, dns filter, etc.
Might be time to have a word with employees if they are not following rules?