Social clauses in public procurement as a guarantee against intra-community social dumping

Abstract

Public procurement is a powerful and increasingly common tool of EU policies. Given the enormous importance of public procurement in terms of public expenditure, it seems justified to promote a social-policy based reinterpretation of the traditional economic approach, for example by including social considerations among the bid specifications. The ECJ’s ruling in the ‘RegioPost’ case is a clear example thereof. In it, the ECJ reacts against transnational ‘social dumping’ by prioritizing workers’ rights over the freedom to provide services. More specifically, the ECJ considers that regional legislation that, on one hand, requires tenderers and their subcontractors to pay the host country’s minimum wage to posted workers and, on the other hand, allows the contracting authority to exclude those tenderers and subcontractors refusing to accept that obligation from the procedure is compatible with EU law. But how does the ECJ reach that conclusion? This commentary analyzes the ECJ’s very formal reasoning and provides some critical reflections on the ruling.