Companies which negotiate pay and conditions with trade unions can be given preference when it comes to awarding public contracts, the EU’s top court has confirmed today.
The Court of Justice of the EU ruled that the inclusion of social criteria, including the promotion of collective bargaining, in public procurement competitions is compatible with Article 67 (Most Advantageous Economic Tender) of the EU Public Procurement Directive.
It also ruled that working conditions form an integral part of the performance of a public contract, and that procurers can even make awards based on more favourable conditions than sectoral collective agreements.
€2 trillion a year
The ruling is a crucial moment in the campaign by trade unions to ensure that the €2 trillion spent annually through public procurement across the EU is used to raise working and living standards.
Currently the majority of contracts are awarded solely on the basis of who offers the lowest price, leading to downward pressure on pay and working conditions, as well as the quality of services. A Europe-wide survey found that a large majority of EU citizens (72 per cent) are in favour of public procurement that improves workers’ livelihoods through collective bargaining.
The European Trade Union Confederation (ETUC) says member states can already apply this judgement to their procurement procedures, and calls on the European Commission to use its revision of the public procurement directives to consolidate this ruling, making sure that companies whose workers are covered by collective agreement are given an advantage in the awarding of public contracts.
ETUC General Secretary Esther Lynch said:
“Cleaners, security guards, and construction workers are among the millions of people employed to carry out public contracts. Too many of them are paid poverty wages or work in dangerous conditions because public contracts are awarded solely on the basis of the lowest price.
“Today’s judgement should be a turning point in the way that public money is spent. It shows clearly that public contracts can and should be used to drive-up the quality of jobs by giving preference to companies which respect workers’ right to collective bargaining.
“While member states can already apply this ruling, the Commission must remove all legal uncertainty that contracting authorities experience in relation to socially responsible public procurement and the promotion of collective bargaining.”
Oliver Roethig, UNI Europa Regional Secretary, said:
“The European Court of Justice's ruling shows that the EU's current procurement framework is ambiguous and inefficient, when it should be enabling and incentivising European municipalities to deliver good jobs and quality services to their citizens.
“European legislators must now seize the opportunity of the upcoming public procurement reform: contracting authorities, service providers, workers and citizens want a legal framework that promotes collective bargaining and quality services.”
