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European Labour Law Lecture 11B. 11.6 Negative aspects – Public Procurement 1.
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European Labour Law Lecture 11B
11.6 Negative aspects – Public Procurement 1 • Another instrument with which national governments have traditionally favoured their own national industries is governmental orders. This occurred on a large scale in the defense industry or in infrastructural works (tunnels, roads etc.). • This policy was detected very early as an infringement of the idea of non-discrimination and fair competition within the EU, so the EU has issued various Directives concerning the co-ordination of procedures for awarding public works contracts.
11.6 Negative aspects – Public Procurement 2 It is often thought that the detailed rules set out in the Directives are prohibiting the authorities to maintain high, social and employment standards when they are awarding public work contracts. In theory this is not correct because the public procurement rules allow the awarding authorities not to give the contract to the cheapest tender, but to “the most economically advantageous” tender.
11.6 Negative aspects – Public Procurement 3 However this last option requires the public authority to specify in the tender documents the criteria with their relative weightings, chosen for the evaluation of the tenders. Any failures or inaccuracies in the tender documents could endanger the provision of the services and lead to lengthy court proceedings. It is submitted that many awarding authorities are unable to formulate sufficiently accurate such standards of quality and therefore simply choose the option of awarding the contract to the cheapest tender.
11.6 Negative aspects – Public Procurement 4 This easily has bad effects on the position of the workers. For instance in the Netherlands it caused a race to the bottom in the employment conditions of cleaning workers hired through cleaning work contractors by large using companies (railways, airports, et). Only tough strike activities could turn this trend.
11.7 Negative aspects – Company law 1 The creation of a European common market has stimulated a growth of mergers and acquisitions. This often has made many workers unemployed and destroyed jobs in entire regions. The EU has taken some flanking measures, such as the Transfer of undertakings and the Collective Redundancy directives, but they offer only very small consolation.
11.7 Negative aspects – Company law 2 The creation of a European common market has contributed to the fact, than an increasing number of companies are no longer restricted to one MS. They are part now of an international group of undertakings. Although the EU has come out with hard laws requiring employers to inform and consult the workers, the effects of such information and consultation is much lower than they used to be in various national companies. And it certainly has often weakened the possibilities for workers to participate in the governance of the companies. Apart from the SE the EU has not been able to remedy this.
11.8 Negative aspects – Collective bargaining 1 Since a number of years the ECJ is confronted with questions about the tension between EU law and collective bargaining. The question initially concerned the area of equality of m/f. Notwithstanding the fact that free collective bargaining is a fundamental right, the ECJ in several cases (e.g. Enderby) confirmed that the collective agreements must, like statutory labour law, respect the EU-rules on equality m/f.
11.8 Negative aspects – Collective bargaining 2 In recent case law (Prigge//Hennings) this was extended to the EU rules on age discrimination. In this field the interest of the social partners to go their own way is much higher than in m/f discrimination. Although it seems that the ECJ until now leaves the social partners (like the legislator) more room for discretion, it nevertheless may upset their autonomy.
11.8 Negative aspects – Collective bargaining 3 In 2009 in the Albany case, the ECJ saved the collective agreement from the threat to be tested to EU competition law, anyway as far as its core business (employment and working conditions) is concerned. However, there may come problems on the fringe. In the Netherlands an actual question is: may collective agreements lay down conditions of employment of independent workers?
11.8 Negative aspects – Collective bargaining 4 In Viking and Laval cases the ECJ has ruled, that the exercise of the right to collective bargaining had to be reconciled with the economic freedoms of the Treaty. In the Rüffert case the ECJ rejected a classic instrument to support collective bargaining, viz. the insertion of the obligation to apply a relevant collective agreement in the conditions of a public procurement. In the case (Commission vs Germany) the ECJ found that the EU rules on public procurement could not simply be neglected in collective agreements. The idea of free collective bargaining should have been reconciled with these rules.
11.9 Negative aspects – Inequality 1 Did not all these liberal measures cause a growing inequality in the EU? EU Labour Law, which is comprehensive in the field of discrimination, has certainly contributed to a decrease of formal inequality. Yet, there is increasing evidence (reports of OECD, European Commission and ETUC 2011/2012) that in recent decades real inequality in the EU has increased substantially.
11.9 Negative aspects – Inequality 2 The rise is most in income inequality, especially at the top of income distribution There is also more inequality in employment outlooks of – on the one hand - educated middle aged workers and – on the other hand – young workers, migrant workers, disabled and elderly workers: the duality on the labour market There are more inequalities in educational attainment. Regional disparities within the EU and MS are on the rise
11.10 Negative aspects – Labour Market Reform 1 • The European Commission goes on pressing for flexibility on the labour market, which could lead to less employment protection: • Reform of the industrial relations and collective bargaining systems (including decentralisation of collective bargaining) • Changes to individual/collective dismissal rules • Changes to organisation of working time regulation • Changes to rules on atypical contracts • Pay freeze or cuts in the civil service protection.
11.11 Negative aspects – Social Security Reform - 1 • 11. The European Commission insists on a “more sustainable” (= cheaper) systems of social security. This sould notably been done by • Reduction in social welfare benefits and allowances • Pension reform
11.12 Negative aspects - Financial crisis 1. The two preceding points have become notably clear in the present monetary crisis. In many of the EU MS, hit by the actual financial crisis measures have been adopted in the field of • Reform of industrial relations and collective bargaining systems (including decentralisation of collective bargaining) • Changes to individual/collective dismissal rules • Changes to organisation of working time regulation • Changes to rules on atypical contracts • Pay freeze or cuts in the civil service • Reduction in social welfare benefits and allowances • Pension reform
11.12 Negative aspects - Financial crisis 2. Such measures formally were not prescribed by EU Labour Law, but were adopted by the various MS to please the European authorities and the International Monetary Fund with which many of them had to negotiate in order to obtain relief for the financial problems. It seems, that sometimes the European Commission negotiators were even less concerned with the social problems of these measures than the negotiators of the IMF. The case of Latvia stands out as a case in which the EU/IMF negotiators showed most compassion with the social problems of these measures.
11.12 Negative aspects - Financial crisis 3. Many people claim, that various of these measures are in violation of several international labour standards and are considering complaints and appeals to the courts.
