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Round €2 trillion is spent annually on the award of public contracts, usually linked to the service sector — that is 13 p.c of the EU’s GDP.
But earlier than Covid-19, half of tenders in Europe have been being awarded merely based mostly on a “most economically-advantageous” standards, as recorded on the tenders’ digital every day (TED) database.
That method ignores minimal working circumstances, as some corporations undercut staff’ circumstances and wages with the intention to bid low costs to win public contracts, based on UNI Europa (a regional union representing seven million staff within the companies sector).
That is usually for 3 causes, the union states.
First, the 2014 directive regulating EU public procurement doesn’t require contractors to adjust to basic labour rights.
Second, it’s left to nationwide, regional, or native authorities to resolve whether or not to respect collective bargaining agreements.
And third, as a result of the identical applies to compliance with social standards.
In observe, that is more likely to have a detrimental impact on staff—but it surely additionally impacts on state coffers and competitiveness of the companies themselves.
For instance, Denmark awarded all interpretation companies to a brand new and cheaper provider that required all workers to work as self-employed, and at decrease charges. When a lot of them refused the circumstances, the corporate needed to withdraw from the contract, the federation’s report particulars.
And it is not solely Denmark. Within the Netherlands, throughout Covid-19, name centre operators commissioned by the Dutch authorities have been underpaid and had no rest room breaks or entitlement to pension contributions, based on the Netherlands commerce union confederation (FNV).
The record goes on, proving the previous saying that ‘low-cost could be costly’.
The identical could be utilized to the member states’ coffers. “If all companies staff have been coated by a collective settlement the authorities could be €108bn a 12 months richer,” UNI Europa estimates.
Lead by instance
Regardless of variations between member states, the snapshot from the worldwide commerce union concludes that present European guidelines don’t be sure that public cash goes to corporations respecting first rate circumstances for his or her staff.
Paradoxically, this hampers competitors and encourages unfair play by limiting social requirements and giving a aggressive benefit to those that make use of on very low wages. In different phrases, it encourages a race to the underside.
“We have to reopen the 2014 directive and develop sectoral laws that makes utilizing these [social] standards necessary,” Inexperienced MEP Anna Cavazzini advised EUobserver.
Cavazzini is one in all over 160 MEPs who’ve joined the ‘Procuring First rate Work’ marketing campaign to vary EU guidelines and clear up the authorized uncertainty surrounding them.
Procurement officers “want clear standards and steerage, and assist with ex-post monitoring to make sure that the social components promised by bidding corporations are successfully revered as soon as they’re awarded contracts,” she warned.
To this point, the European Parliament has already adopted a sequence of stories and motions to strongly implement the social clause of the present directive — with no motion in response from the EU’s govt arm aside from to postpone the evaluation till 2024.
“Public cash can solely be invested the place first rate working circumstances are revered, the place persons are paid first rate wages,” mentioned MEP Agnes Jongerius (S&D) during a February plenary session.
The funding shouldn’t be used into creating “awful jobs that exploit individuals,” she concluded.
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