ECJ judgement 'a severe blow to local and regional authorities' ability to set social standards' says PES

Karl-Heinz Lambertz, leader of the Group of Socialists and Progressives in the Committee of the Regions, has expressed his deepest concerns in relation to the 18 September judgement by the European Court of Justice (ECJ) in the Case Bundesdruckerei v Dortmund (C-549/13). In this case, the European Court of Justice has ruled that within a public call for tender, a public authority cannot impose to a subcontractor based in another country the obligation to comply with national, regional or local minimum wage thresholds.

In the present case, the city of Dortmund applied to a tender for a public contract relating to the digitalisation of documents, the regional law of North Rhine-Westphalia providing that public service contracts may be awarded only to undertakings which pay their staff a minimum hourly wage of €8.62. However, the winner of the call for tender intended to subcontract an undertaking established in another member state (in this case, Poland) with a much smaller minimum wage. According to the Court, "the imposition of a minimum wage on a subcontractor established in another member state in which minimum rates of pay are lower constitutes an additional economic burden that may prohibit, impede or render less attractive the provision of services in that other member state".

Lambertz reacted: "A few days after a resounding report by the Bertelsmann Foundation on the increasing social imbalances in the European Union, the entrepreneurial interests of companies from low-wage countries are again put above social standards. Actually, what we are now faced with is that European law will be providing the means of circumventing national social standards, thus paving the way for social dumping. The European legislator must urgently close these loopholes. In the short term, an amendment to the EU's public procurement rules should be considered. In the medium term, there is a need to establish a European system for the recognition of minimum wages. This could also encompass a revision of the EU Treaties. This will be one of the first challenges to be taken up by Commissioner-designate for Social Policy and Employment, Marianne Thyssen (EPP/BE)".

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