Standing of unions and competent court on social clauses in procurement proceedings

AutorJosé María Ríos Mestre

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1. Social clauses in procurement regulation

A bout regulatory matters, one finds the social clauses in article 145 LSCP 2017 which includes the demanded requirements and the kind of award criteria. The award of contracts is solved by a set of criteria which are based on the best relationship quality–prize. Supporting evidence collected by the procedure should be appraised. Based on such evidence, contracts can be awarded following criteria which are based whether on cost and efficiency, whether prize and cost, as well assessment of life time. The best relationship can be based whether on economic or qualitative criteria. Qualitative criteria establish by procurement bodies based on qualitative data can include environmental or social perspectives, which be attached to the object of the contract.

Social features will be related, among others, to the following goals: promotion of social integration of disabled persons, exposed collectives included among personal assigned to the contract. Also the scope includes people at risk of social exclusion, outsourcing with Special Employment Center or Integration companies, plans for gender equity related with the contract, equality among women and man, promotion of hiring female workers, reconciling personal and working life, improvement of labour conditions and wages, employment stability, hiring a bigger work task, training in health and security, ethical criteria and corporative responsibility, being provided with goods from equity commerce along the execution of the contract.

Article 147 LSCP 2017 includes tiebreaker criteria with a deep social founding. First of all the contracting bodies are able to set specific award criteria in the contract specifications when there is a tie according to general award criteria. These tiebreakers are linked to the object of the contract and will include: a) petitions of companies which hire a higher number of disabled worker than the number fixed by regulation at the end of the deadline for offers; b) Petitions of Integration companies ruled by Law 44/2007, December 13th, which have all the legal requirements; c) by award of contracts with social o caring programs features, the proposals submitted by non–profit organizations which pursue goals directly related to the contract, when it is has been stablished by the foundation of the organization and the organization is officially registered; d) offers submitted by fair commerce entities in order to be awarded with procurements that allow fair commerce; e) proposals submitted by companies which by the proposal submission deadline, contain

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social and employment measures that promote equality of opportunities among men and woman. The documents containing evidence of tiebreakers will be provided by tenderers when the tie is caused, it is not necessary to submit the evidence prior to the tie.

In the absence of any provision in the procurement specifications, the tie among offers will be broken according to the following social criteria. The social criteria will be appraised referred to the time of the offers submission deadline. a) higher percentage of disabled worker or employees risking social exclusion in each company; in this case the tie will be broken favoring higher indefinite workers or the higher amount of hired employees. b) lesser percentage of temporary or time fixed labour contracts; c) higher percentage of hired women; d) randomly if the former criteria could not break the tie.

In case of unusual low offers, article 149 LSCP 2017 stablishes that procurement bodies will reject the abnormal low offers when it is proven that the lowliness comes from not complying with contractors, environmental, social or labor rules whether they are national or international, including sectorial collective agreements which are in force.

This provision should be connected with article 201 LSCP, whose title is “Environmental, social or employment duties”. The referred article 201 stablishes that procurement bodies will take action guaranteeing that the procurement execution by the contractors are consistent with environmental, social or labour duties from European Union Law, state law, collective agreements or provisions of international law regarding environmental, social or labour matters which are mandatory for the state, especially those contained in Appendix V.

The Appendix V cited above contains the following international regulations regarding social and labour matters:

ILO 87th Convention about union freedom and protection of the right to organize; ILO 98th Convention about the right to organize and collective bargain; ILO 29th Convention about eradicating forced labour; ILO 138th about minimum age; ILO 111th Convention against discrimination (employment and occupation); ILO 100th about equal pay; ILO 182th Convention about the worst forms of child labour.

One can easily notice a big reinforcement of collective bargain by integrating ILO Convention about union freedom and protection of the right to organize and ILO Convention about the right to organize and collective bargain.

That should be understood without prejudice of the procurement bodies to take action to check that while the bidding procedure, the applicants and bidders comply with social and labour duties.

Breach of social or employment duties and, specially, non–compliance or delays in paying salaries or application of lower salaries conditions than those established by collective bargain are punished. In case of serious misconduct and willful behavior, the penalties contained in article 192 LSCP will be imposed.

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The above mentioned article 192 LSCP 2017 regulates partial non–compliance or defective compliance. It stablishes that procurement and the descriptive document can also make provision of penalties the defective execution or non–compliance of obligations or specific conditions procurement execution.

These penalties should be proportionate to the seriousness of the infringement and the amount of the penalties should not be higher than 10 percent of the procurement price, excluding VAT. The complete amount can neither be higher than 50 percent of the contract price. When the contractor partly fails to execute the services agreed in the procurement for reasons attributable to the contractor, then the public administration will appraise the specific circumstances and it can either terminate the procurement or impose penalties foreseen for such cases by the special specifications or by the descriptive document. The conditions of institutional agreements could establish provisions regarding the penalties contained in article 192 LSCP.

2. Case law on social clauses in procurement

The STS 3ª 1301/2016, de 2 junio (rec. 852/2015) Ruling is related to social clauses in Procurement Law and its relationship with collective bargain. In this procedure is discussed a Regional Act from Guipúzcoa which approved a new rule about public procurement. According to this rule, specific administrative clauses included in public procurement necessarily should comply with the Collective Agreement of construction and public works from Guipuzcoa, which was published in the Official Gazette from Guipuzcoa. At the same time the Regional Act approved another rule about specific administrative clauses which referred to public work contracts. It was established that such specific administrative clauses should contain a special provision. The scope of this provision was to stop extreme low offers. The tools to achieve that goal were the award criteria. It was understood that an offer was extremely low when the offer was lower by more than 10% of the arithmetic mean from the prices of all the accepted offers. It was meant to be an objective appraisal criterion. This objective criterion meant that abnormal appraisal would cause the decrease of labour wages affecting the Collective agreement. In last place, the Regional Act decreed that contractors are compelled to hire at least 30% of the worker trough indefinite labour contracts. This provision was meant to secure employment stability1.

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The referred STS 3ª 1301/2016, de 2 junio (rec. 852/2015) Ruling understands that the provision which forces public procurement is dependent from the fulfillment of employment law, regulation and collectives agreements. In this group of acts one can find the provisions related to company level collective agreements and the withdraw of the force and effectiveness of the collective agreements. In such case, the requirement of fulfillment of labour acts including the imposed effectiveness of the current collective bargain for construction and public work goes too far. This problem must be decided in relationship with the new labour regulation. It is not a covert derogation of employment (neither an attempt to do so), because the referred collective agreement is not corrupted. The collective agreement has not been changed. Its content remains the same. Even it could be defended that the collective agreement...

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