The Scope of Labour Law Requirements in Public Procurement - at the ILO, EU and Swedish Level
Abstract: In 2008 public procurement made up 17-18 percent of the EU GDP. The issue of whether the disbursement of public funds can be used to promote social objectives, including preservation of labour law requirements or whether public authorities only shall take economic considerations into account when deciding what to purchase, has been subject to discussion. In this thesis, I have chosen to describe the scope of labour law requirements at an ILO, EU and Swedish level. In 1949 the ILO Convention no. 94 on Labour clauses in public contracts was adopted. The rationale behind the Convention was partly to ensure that working costs were not used as a competitive mean and that the performance of a public contract should not entail a downward effect on wages and working conditions. Ratifying states have obliged themselves to impose clauses in public contracts, requiring tenderers to observe prevailing working conditions in the locality, region or state concerned. At the EU level, the Directives governing the coordination of public procurement were revised in 2004. The primary rationale behind the coordination at the EU level is to promote the integration of the internal market by ensuring that tenderers from all Member States enjoy equal opportunities to bid for a public contract. Those procurements that do not meet the thresholds set out in the Directives are still subject to the provisions of the Treaty, provided that they possess a transnational interest. Public procurement touch upon other areas where the Union legislator lacks competence or only enjoys shared competence. In Rüffert and Commission v Germany, the ECJ struck the balance between economic efficiency and social considerations and the former was in these cases given precedence. The scope of labour law requirements in public procurement was increased through the entering into force of the new Directives but has albeit been subject to criticism and discussion. At the Swedish level, the legislation implementing the EU public procurement Directives entered into force in 2008. In 2010 a target provision was adopted in order to increase the possibilities to take social considerations into account during the public procurement procedures. The provision is not mandatory and has been criticized both by those in favour of a purely procedural legislation on public procurement and by those who wish to include social and labour law requirements. I have chosen to discuss the scope of labour law requirements at an ILO, EU and Swedish level in the light of the provisions regulating a social market economy (Article 3(3) TEU), the reinforcement of fundamental rights and the principle of subsidiarity (Article 4(2) TEU). The absence or the non-harmonisation of a social dimension and its implications on national labour law structures, as identified by Scharpf and Joerges in their ‘decoupling’ theory, constitutes the theoretical starting point of this thesis. The social aim of the ILO Convention no. 94 is clear. In comparison, the scope for labour law requirements in EU public procurement law appears rather vague. The social endeavours set out both by the Directives and the Treaty have sometimes clashed with the rulings of the ECJ. This lack of clarity, could be seen as transposed to the Swedish level partly due to the quite literal implementation by the Swedish legislator.
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