Thursday, April 21, 2011

FRANCE: A premium "required" for employees of large companies

AFP - After several days of debate within the government, Nicolas Sarkozy on Tuesday decided to impose on companies with more than 50 employees each year for the payment of a premium "binding" to their employees if they increase their dividends.

After a final arbitration meeting at the Elysee Palace with Prime Minister François Fillon and several members of his government, the head of state has ruled for a binding mechanism, as he had hinted Tuesday during a trip in the Ardennes.

"In all companies with more than 50 employees subject to the law on participation, if dividends are higher than the year before, there will be obliged to pay a premium negotiated with social partners," said a government source after the meeting.

The government hopes that the scheme is applied "this year". François Fillon also announced in the evening a bill to that effect would be submitted to Parliament "before summer".

This bonus will be subject to an amount of at least 1,000 euros at the same rate of social insurance premiums for participation that is to say 8%, sued the government source.This amount could possibly be revised upwards in arbitrations to come.

Firms with fewer than 50 employees will in turn "encouraged" to pay a premium equal to their employees. This premium will be exempt from taxes, said the source. "There will be no obligation for these companies," we insisted.

Studied by Labor Minister Xavier Bertrand, Economy Christine Lagarde and Budget Baroin, this "bonus", its amount and terms feed a confused debate over several days, both between the State and the social partners that 'within the government.

April 13 Evoking an amount "of at least 1,000 euros," Mr.Baroin had attracted a replica of the patron saint of dry MEDEF Laurence Parisot, who had denounced as "incomprehensible". Ms. Lagarde was then ruled to impose a fee for the premium.

Despite the hostility of employers and unions that it reserves prefer higher wages, Nicolas Sarkozy Tuesday reaffirmed its commitment to implement this scheme, which aims to improve the purchasing power of the French.

"The sharing of value, I would like because it's a matter of justice," he said."When there is recovery, I say it is normal for employees and workers who have sought work during the crisis benefit from the recovery, it is a principle I will not give in," had he insisted, noting the failure of the negotiations he had requested in 2009 the social partners on this topic.

In a financial crisis, the head of state asked them to discuss the "value sharing", defending himself the idea of ​​a rule of "three tier" where corporate profits would be divided into three parts equal shareholders, employees and investment.

"In two years, negotiations have not moved an inch", "he lamented Tuesday," so the government will take responsibility. "

One year before the presidential election and while the economic recovery starts to take shape, Nicolas Sarkozy is trying to revive its 2007 election promise to be the "president of purchasing power".

Even if it does not affect the 5.2 million civil servants, whose salaries have been frozen for the second consecutive year, this "bonus" is likely to affect at least 8 million people employed in businesses with more than 50 employees .