Written Question to the EU Commission, tabled by Sahra Wagenknecht on 7 July 2008

1. Does the Commission agree that the Ruffert judgment risks favouring the relocation of undertakings to countries with lower pay and social standards, and if so, what does it propose to do to counteract this?

2. What effects does the Commission consider that the Ruffert judgment will have on the equal treatment of native and foreign firms in the award of public contracts? Does it not constitute discrimination against native undertakings if firms from other EU Member States are only required to comply with the minimum criteria of the Posting of Workers Directive?

3. Does the Commission consider that there is a need to work towards creating a European legal area permitting national laws on compliance with collective labour agreements ('Tariftreuegesetze') to be deemed in accordance with European law?

4. What is the Commission's view of the relationship between the Posting of Workers Directive and the public procurement directives as regards the validity of clauses on compliance with collective labour agreements? Does the Posting of Workers Directive take precedence over the public procurement directives, or is it not rather the case that, when it comes to the validity of such labour clauses, the public procurement directives as 'lex specialis' override the Posting of Workers Directive?

5. Does the Commission agree that the Ruffert judgment conflicts with the ILO Convention concerning Labour Clauses in Public Contracts (ILO Convention 94)? Following the Ruffert judgment, does the German Government still have the option of ratifying ILO Convention 94?

Answer by Internal Market Commissioner Charlie McCreevy on 8 September 2008

1. The Commission has no indications that the judgment of the European Court of Justice (ECJ) in the Rüffert case (Case C‑346/06) could lead to moving jobs into countries with lower wages or lower social standards. The judgment concerns the very specific situation in which regional legislation in the area of public procurement imposes the respect of working conditions on foreign service providers carrying out public works contracts which are laid down in local collective agreements, which have not been declared universally applicable, despite the existing possibility to declare collective agreements universally applicable in Germany.

2. The Commission does not consider that the Rüffert judgment has any particular effects or implications on the principle of equal treatment and non-discrimination of foreign workers. Furthermore, as regards possible discrimination of their own nationals, it is up to the national (or in this case regional) legislator to assess whether they need or want to adapt the legislation which is incompatible with Community law in the area of freedom to provide services, also with a view to cover purely national situations.

3. In view of what was said above and of the fact that the Public Procurement Directives(1) already allow to take into account social considerations, provided they are in compliance with Community law, the Commission does not see any necessity to establish regulation at European level that would allow the kind of 'Tariftreueklausel' that was the subject of the ECJ in the Rüffert judgment to be deemed in conformity with European law.

4. As already stated above, the Public Procurement Directives(2) allow contracting authorities to lay down special conditions relating to the performance of a contract, which may concern the pursuit of social considerations, if these conditions (as well as more generally the award of public contracts) are compatible with and implemented in compliance with Community law. The contract award must therefore respect the fundamental freedoms guaranteed by the Treaty, amongst them the freedom to provide services, which the Posting of Workers Directive seeks to reconcile with the need to guarantee workers temporarily posted to the territory of another Member State to provide these services.

In the light of the above, and taking into consideration the reply to question 2, there is no question of precedence or being 'lex specialis' of one Directive over the other.

5. ILO Convention No 94 (the Labour Clauses (Public Contracts) Convention), referred to by the Honourable Member, was adopted in 1949 by the International Labour Organisation (ILO) and has been ratified by 10 EU Member States. However, bearing in mind the fact that Germany has not ratified this Convention, the Court did not have to address the question of the significance of the International Labour Organisation (ILO) Convention No 94, if any.

(1) Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors, OJ L 134, 30.4.2004; Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, OJ L 134, 30.4.2004. (2) See also the interpretative Communication on social aspects of public procurement contracts, COM(2001)566 final of 15.10.2001.