Public Procurement, Social Policy and Minimum Wage Regulation for Posted Workers: Towards a More Balanced Socio-Economic Integration Process?

• Main Author: Clements Kaupa
• Format: Article
• Language: English
• Published: European Papers (www.europeanpapers.eu) 2016-04-01
• Series: European Papers
• Subjects: public procurement; posted workers; freedom to provide services; social policy
• Online Access: https://www.europeanpapers.eu/en/e-journal/public-procurement-social-policy-and-minimum-wage-regulation-posted-workers

(Series Information) European Papers - A Journal on Law and Integration, 2016 1(1), 127-138 | European Forum Insight of 16 April 2016 | (Table of Contents) I. Introduction: pursuing multiple policy objectives via public procurement. - II. Cross-border provision of services and the Posted Workers Directive. - III. Growing inequality and national procurement law. - IV. The decision RegioPost. - V. Conclusion. | (Abstract) Income inequality increased significantly over the past decades. The liberalization and outsourcing of public services, in conjunction with increased pressure on public budgets, has played a considerable role in this development: in procuring services they previously had provided themselves, public authorities fostered price competition among private operators vying for public contracts, which in turn exacerbated the pressure on wages. In response, some public authorities conceived of strategies aimed at neutralizing the downward pressure on wages they effected. Among the measures developed in this context is the establishment of a wage floor via public procurement that contractors and their sub-contractors have to comply with. In principle, European procurement law allows public authorities to set special performance conditions that exceed general regulatory standards. This is also the case in the social area. However, attempts to implement wage floors via public procurement have been repeatedly challenged on the basis of Directive 96/71 (Posted Workers Directive) and Art. 56 TFEU, as the decisions Rüffert (Court of Justice, judgment of 3 April 2008, case C-346/06), Bundesdruckerei (Court of Justice, judgment of 18 September 2014, case C-549/13) and, most recently, RegioPost (Court of Justice, judgment of 17 November 2015, case C-115/04) attest. The present text analyzes the decision RegioPost and sketches the extent to which public procurement can be employed to pursue social policy objectives. It will be shown that RegioPost confirmed the right of public authorities to pursue social objectives via procurement law, which also includes the setting of a procurement wage (even if it exceeds general wage levels), provided that it conforms to the formal requirements of Directive 96/71. The decision clarifies and partly overturns the controversial judgment Rüffert, and - despite its perhaps somewhat technical nature - may contribute to an integration process that is more balanced in socio-economic terms.