EU Court of Justice: Awarding of public contracts may be made subject by law to a minimum wage

24 Nov 2015

Last week, the Court of Justice of the EU (CJEU) issued its ruling in matters of case C-115/14, ruling that the award of public contracts may be made subject by law to a minimum wage.

EU Court of Justice: Awarding of public contracts may be made subject by law to a minimum wage

The case concerned an exclusion of the German undertaking RegioPost by the German municipality of Landau (Rhineland-Palatinate) from participation in a public procurement procedure relating to postal services in that municipality on the grounds that that undertaking had not declared, contrary to the provisions of the contract notice and despite a reminder letter, that it undertook, if awarded the contract, to pay a minimum wage to staff called upon to perform the services.

The exclusion was justified by means of a law of the Land of Rhineland-Palatinate under which public contracts may be awarded in that Land only to undertakings which, at the time of submitting their tender, undertake to pay staff responsible for performing services a minimum wage of €8.70 gross per hour.

In its judgment, the CJEU ruled that the practice of the Landau municipality is not in breach with Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts. This directive grants contracting authorities the rights to impose certain special conditions relating to the performance of a contract – including social considerations. 

In this context, the CJEU decided that EU law:
• neither precludes legislation that requires tenderers and their subcontractors to undertake, by means of a written declaration enclosed with their tender, to pay staff called upon to perform the services a predetermined minimum wage;
• nor precludes legislation that provides for the exclusion from participation in a public procurement procedure of tenderers and their subcontractors who refuse to undertake, by means of a written declaration enclosed with their tender, to pay staff called upon to perform the services a predetermined minimum wage; 

CESI warmly welcomes this decision by the Court. CESI Secretary General Klaus Heeger said: “This court judgment is certainly good news for workers. It puts very clearly that authorities can demand basic social conditions such as a minimum pay from tenderers in public procurement procedures.”

The full judgment is available on the website of the Court of Justice of the EU. An official press release can be accessed here.

Picture: © Court of Justice of the European Union.