Government ends pay guidelines to nationalised companies

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At the end of January 1997, the Prime Minister ended the practice of issuing pay guidelines to France's nationalised companies.

A letter was previously sent at the beginning of the year to the heads of public sector companies indicating the ceiling levels for pay increases. Instituted in 1983 following a period of price and wage freezes, this letter formed one of the elements of the wage policy which the Socialist Government of the time wished to implement. This policy's aims included avoiding excessively large disparities between employees of companies under state ownership. It also had an impact, along with government decisions concerning civil servants' salaries, on private sector pay negotiations. Companies in the private sector received a similar letter from the CNPF (Conseil National du Patronat Français) employers' confederation, which ceased this practice at the beginning of the 1990s.

According to the Industry Minister, Franck Borotra, the announcement of a percentage increase gave made employees feel that they had an entitlement, no matter whether particular nationalised companies were in profit or loss. "As a result", the Minister added, "negotiations were biased, the management deprived of decision-making powers, and dialogue thwarted." For the Government, this decision is part of a desire to "reform the state" and to transform relations between the state and the companies under its control.

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