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This article examines changes in public sector employment relations in Germany, traditionally regarded as a very stable case and a country that has not been conducive to the new public management (NPM) agenda. In recent years, very significant changes in pay determination and interest representation have occurred. Public employers have changed their practice without, however, explicit reference to any NPM agenda. They have transformed civil servants' employment conditions by making use of their legally guaranteed, unilateral regulatory power of decision making, setting in train a process of fundamental transformation.
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