EU rules must ensure public money is given to companies whose workers are covered by collective agreements, trade unions say after the European Parliament adopted a report on public procurement.
Over €2 trillion is spent annually through public procurement competitions across the EU and the majority of contracts are being awarded solely on the basis of who offers the lowest price.
The report adopted today highlights how that leads to “downward pressure on the quality of services and safety and working conditions” and can “exacerbate the occurrence of undeclared work.”
The report positively states that “including social clauses, such as requirements related to working conditions, collective bargaining and respect for labour rights, can significantly enhance the quality and reliability of public procurement outcomes”, but stops short of demanding much-needed mandatory social conditionalities.
The report comes ahead of a revision of the public procurement directives by the European Commission. The European Trade Union Confederation (ETUC) is calling for the Commission to ensure the revision leads to rules which support collective bargaining and quality jobs by:
- Ensuring that public money goes to organisations that respect workers’ and trade union rights, that negotiate with trade unions and whose workers are covered by collective agreements;
- Eliminating the possibility to award public contracts on the basis of price only, and guaranteeing criteria connected with quality jobs and collective bargaining;
- Regulating subcontracting by introducing joint and several liability and a limit to the length of the chains;
- Guaranteeing that public provision of services, public/public partnerships as well as in-house provision of services remain valid options and are not put under pressure.
ETUC General Secretary
Esther Lynch
said:
“Vast sums of public money are being spent in a way which actively undermines the public interest. The majority of public contracts worth a combined €2 trillion a year are being handed out to whoever says they can do the work for the lowest price, leading to poor quality services and the exploitation of workers from care homes to construction.
“We must reverse this situation and ensure that public money is spent in a way which drives up working conditions and living standards in Europe.
“The Commission should cut-off the cowboys and shell companies hiding behind complex subcontracting chains, and instead ensure contracts are now only awarded to decent organisations which fulfil the basic requirement of negotiating collective agreements with trade unions.
“Failing to link public procurement to collective bargaining doesn’t just hurt workers, it comes at a massive economic cost. Every year, billions are lost in wages and public revenue because contracts go to companies that undercut fair standards. The EU cannot afford to keep rewarding low-road competition. Supporting collective agreements is not only fair it’s fiscally responsible.
“Public procurement must reflect public values. In the EU a large majority of EU citizens (72%) are in favour of public procurement that strengthens workers’ livelihoods through collective bargaining. Good companies shouldn’t lose out because public contracts reward the lowest bid, not the fairest one.”
An ETUC press release