Labour Clauses (Public Contracts) Convention, 1949 (No. 94) - Brazil (RATIFICATION: 1965)

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The Government has communicated the following information:

The drafting of amendments to the labour legislation was begun some time ago. With the new 1988 Federal Constitution and the wide range of workers' rights it recognises, the planned reforms of Brazilian labour law have received a new impetus. The legislature will no doubt take account of the provisions of this Convention in due course, in particular because of the primacy of international law over internal law. Meanwhile, although the Convention is not literally fulfilled, it is in fact applied in practice.

The employee of a contractor with a public authority has the benefit of legal provisions the same as in any business, and those provisions are derived from collective agreements of the decisions of labour tribunals.

Therefore the fact that a business undertaking working under a public contract is not bound by a collective agreement is immaterial in Brazil, since the business is necessarily bound by the contract in agreement or a normative decision; unless there is a trade union for certain categories of workers, in which case the problem would be the same for all the employees, whether or not they are employees of a business contracting with the public authority.

Furthermore, contractors' activities are subject to the common labour inspection system and to wages agreed individually or collectively whether they are in the public or the private sector, and are subject to the labour courts, where legal standards are equitably applied.

The Government stresses that provisions derived from "collective agreements" in the full sense which benefit one worker, benefit all workers of the same category, whether or not they are in enterprises or those providing services in the public administration.

Provisions as to the health, safety or welfare of workers are applied uniformly to all workers through the national legislation. Workers' rights under contracts or collective agreements must be made known by fixing notices in visible places in the premises of the businesses where they are to be applied (section 614(2) of the Consolidated Labour Laws).

In addition, a Government representative added that the responsibility for the application of the Convention was within the competence of the Federal Government and not the individual states. Therefore, the rights of employees of a contractor for the public authority were equal to rights of employees of any business as they were covered by national legislation or collective agreements. Approval by the public administration was only a formality since the national legislation protected all workers without exception. As all workers were covered by the national legislation, the Government had complied with the obligations stemming from Article 2, paragraphs (1) and (2) of the Convention, according to which a clause must be included in all public authority contracts to guarantee all workers wages and other conditions of labour which are not less favourable than those established for work of the same character.

The Employers' members noted that the statement of the Government representative indicated that he felt that this Government had complied with the obligations under the Convention. However, the Committee of Experts' report had noted the Government's intention to revise the legislation in order to give full effect to the Convention. The legal position of the Government should perhaps be clarified. Brazil had accepted the obligations arising from this Convention and it should not be too difficult to take the necessary measures to bring the legislation and practice into full conformity with the Convention. Furthermore they had noted that, last year, this country had ratified Convention No. 81 on labour inspection. The first report on that Convention would perhaps provide the Office with some concrete information on this problem.

The Workers' members were pleased to hear that the Government wanted to resolve the problem because, even if there was no problem in practice as was noted in the written information, the legislation still needed to be revised. It was important that the comments made by the Committee of Experts be taken into account when revising the legislation and, in particular, that the Committee's indication that merely applying national labour legislation to all workers was not sufficient to ensure the application of the Convention. Furthermore, they recalled the suggestion that the Government ask the Office for assistance before finalising the draft text.

The Government representative indicated that there had been a misunderstanding. The willingness to comply with the Convention was evident in the fact that the Constitution prohibited discrimination on the basis of sex, civil status, race, colour, and other forms of discrimination. He referred to his Government's written comments to the effect that contractors' activities were subject to the common labour inspection system and were subject to the labour courts, where legal standards were equitably applied, whether they were in the public or the private sector. Thus, the provisions derived from collective bargaining agreements with respect to health, social security and the welfare of workers which benefited one worker would benefit all workers of the same category, whether they were in private enterprises or providing services in the public administration. Since the national legislation applied equally to all workers he could not see in what way the Convention was being violated.

The Employers' members agreed that there was apparently a misunderstanding because the Government was explaining the Constitution while the Committee of Experts was concerned with the application of the Convention. Some contracts contained a number of clauses which aimed at treating all workers in the same manner, but this should be explicitly stated in all types of contracts. If no satisfactory solution was found, the matter would have to be brought up again in future years.

The Committee took note with interest of the information communicated by the Government representative. It recommended that the Government ask for the assistance of the Office in order to prevent misunderstandings in the future. It hoped that the further revision of the legislation, as indicated by the Committee of Experts, would be made in the near future.

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The Committee notes the observations of the General Union of Workers (UGT) and the National Confederation of Liberal Professions (CNPL), received on 1 September 2016 and 15 September 2016, respectively. The Committee requests the Government to provide its reply in this respect.

Articles 2 and 5 of the Convention. Inclusion of labour clauses in public contracts. Control measures and sanctions. In reply to the Committee’s previous comments, the Government reports that Act No. 8.666 of 1993 contains provisions which ensure that workers indirectly employed by the public administration to perform services, enjoy conditions of labour which are not less favourable than those established by collective agreement, arbitration award or national laws or regulations for identical or similar work performed by a worker of the same professional category, in a particular area. In this context, the Government indicates that Normative Instruction No. 2/2008, as amended, includes a series of provisions which reproduce the Convention in relation to public procurement. The Government reiterates that section 19(IX) requires that calls for tender must indicate, where applicable, the agreements or collective agreements governing the occupational groups involved in the performance of the service. The Government also refers, inter alia, to section 22 of the Normative Instruction, which provides that the submission of bids is subject to the requirement to comply with the provisions contained therein during the provision of the services by the bidder. The Government therefore indicates, on the basis of the above provisions, that bidders are required to comply with the conditions of work established by collective bargaining, including those provisions not explicitly included in contracts in the form of labour clauses. The Government also refers to the publication of regulations and booklets with a view to providing guidance on the methodology for procurement, supervision and the criteria to estimate the value of the contract, based on the requirement to comply with the labour clauses of the collective agreements for the professional categories involved in the performance of the service. In this respect the Government again provides in its report, among other regulatory texts, the “Guide to the supervision of contracts for services, focusing on labour” (Annex IV of Normative Instruction No. 2/2008, as amended) which establishes in point 1.4 that the wage may not be lower than that specified in the administrative contract and the collective agreements of the professional categories involved in the performance of the services. In relation to the penalties applicable in the event of failure to comply with the labour clauses in administrative contracts for the indirect provision of services, the Government emphasizes, by way of illustration, section 19(XXVI) and section 34-A of Normative Instruction No. 2/2008, as amended, which provide for the termination of the contract without prejudice to the imposition of financial penalties and exclusion from bidding for contracts. In this regard, the CNPL refers in its observations to several court decisions, in which it was ruled that, under Article 5 of the Convention, among other legal instruments, due to its failure to ensure appropriate inspection, the public administration was responsible for the payment of the workers’ remuneration by the contractor. However, the Government indicates that, under the provisions of section 19(XIX) of Normative Instruction No. 2/2008, as amended, the contractor is required to pay a guarantee which shall be held for three years following the expiry of the contract and which shall only be recovered following confirmation of the payment of all the liabilities included in the severance clauses in the contract. However, the Committee recalls that a labour clause has to constitute an integral part of the actual contract signed by the selected contractor (see General Survey on labour clauses in public contracts, 2008, paragraph 117). Lastly, the Committee notes the UGT’s acknowledgement of the efforts made by the Government in relation to the application of the Convention. However, the UGT indicates that additional efforts are needed in this respect and that the excessive outsourcing of public services has undermined the right to strike and the role of the workers’ organizations. The Committee encourages the Government to consider the possibility of adopting specific measures, such as legislative provisions, administrative instructions or circulars, with a view to ensuring the inclusion of adequate labour clauses in all the public contracts covered by the Convention. The Committee requests the Government to provide examples of contracts concluded by public authorities which contain the labour clauses prescribed by the “Guide to the supervision of contracts for services, focusing on labour”. The Committee also requests the Government to provide updated information on the application in practice of the Convention, including relevant court decisions, summaries of labour inspection reports and information on the number and nature of the violations reported.

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Article 2 of the Convention. Insertion of labour clauses in public contracts. In its previous comments, the Committee had requested the Government to take measures in order to include labour clauses in public contracts, thus ensuring that workers would enjoy wages and other working conditions not less favourable than those established by law, collective agreement or arbitration award for work of the same nature in the same district. The Committee notes from the Government’s report the reference to Normative Instruction No. 2/2008, as amended, and in particular, to section 19, point IX, which requires that the invitation to bid should indicate, if applicable, the agreements or collective agreements governing occupational groups linked to the execution of the service. The Government also refers to point 1.4 of Annex IV of the abovementioned Instruction, which states, with regard to the initial inspection procedure, that the salary cannot be lower than that specified in the public contract and Collective Bargaining Agreement Category (CCT). Finally, the Government provides sample copies of public contracts. While taking due note of these indications, the Committee considers, that it is not entirely clear from the above whether full effect is being given to the provisions of the Convention. The Committee recalls that, in order to meet the requirements of the Convention, labour clauses have to be included in public contracts so that workers enjoy wages (including allowances) as well as hours of work and other conditions of labour not less favourable than those established by law, collective agreement or arbitration award for work of the same character in the trade or industry concerned in the district where the work is carried on. In its 2008 General Survey, Labour clauses in public contracts, paragraphs 117 and 119, the Committee indicated that: (i) labour clauses have to constitute an integral part of the actual contract signed by the selected contractor; (ii) the insertion of labour clauses in tender documents, such as the general conditions or specifications, even though required under the terms of Article 2(4) of this Convention, does not suffice to give full effect to the basic requirement set out in Article 2(1); and (iii) this Convention calls for specific measures, such as legislative provisions, administrative instructions or circulars, to ensure the inclusion of appropriate labour clauses in all the public contracts that it covers. The Committee therefore requests the Government to provide any additional clarifications as to how the above listed requirements are being met, as required by the Convention.

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Article 2 of the Convention. Insertion of labour clauses into public contracts. The Committee notes the comments of the Single Confederation of Workers (CUT), received on 5 September 2013 and forwarded to the Government on 25 September 2013. The CUT alleges that practices in violation of Article 2 of the Convention are occurring in the context of technical cooperation programmes undertaken by the United Nations Development Programme (UNDP). The CUT asserts that these programmes are used as mechanisms for avoiding labour legislation and increasing the precarity of the labour force. The CUT adds that employees hired under the programmes in question do not enjoy the same rights as other workers for work of the same nature. The Committee recalls that the main aim of this Convention is to guarantee an adequate level of wages and decent conditions of labour for workers employed to carry out public contracts, namely contracts concluded by a public authority through a call for tenders and which involve the expenditure of public funds for works, manufacturing or the provision of services. The Committee therefore considers that the comments of the CUT do not appear to be directly linked to the execution of public contracts within the meaning of Article 1 of the Convention. The Committee requests the Government to forward any comments it wishes to make in reply to the observations of the CUT. The Committee also requests the Government to reply to the observation made in 2012.

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The Committee notes that the Government’s report has not been received. It must therefore repeat its previous observation which read as follows:

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Article 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes that the Government’s report provides detailed information on the legislation governing the conditions of employment of federal public servants, which are not really relevant to the scope and purpose of this Convention. The Committee recalls that the primary objective of the Convention is to guarantee appropriate levels of wages and decent working conditions for workers employed for the execution of public contracts, that is to say contracts concluded by a government authority and involving the expenditure of public funds. The Convention therefore requires that labour clauses be included in public contracts in order to ensure that the workers concerned enjoy wages and other working conditions not less favourable than those established by law, collective agreement or arbitration award for work of the same nature in the same district. As explained in the Practical Guide prepared by the Office in 2008 (page 17), Convention No. 94 is about procurement contracts in the public sector, not about the employment contracts of public employees. The Committee recalls that it has been drawing the Government’s attention to the main requirements of the Convention for more than a decade and has been suggesting measures to supplement the public procurement legislation, especially section 44 of Act No. 8666 of 1993 and Normative Instruction No. 8 of 1994. The Committee accordingly urges the Government to take action in order to bring its legislation into full conformity with the requirements of the Convention.

The Committee hopes that the Government will make every effort to take the necessary action in the near future.

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Article 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes that the Government’s report provides detailed information on the legislation governing the conditions of employment of federal public servants, which are not really relevant to the scope and purpose of this Convention. The Committee recalls that the primary objective of the Convention is to guarantee appropriate levels of wages and decent working conditions for workers employed for the execution of public contracts, that is to say contracts concluded by a government authority and involving the expenditure of public funds. The Convention therefore requires that labour clauses be included in public contracts in order to ensure that the workers concerned enjoy wages and other working conditions not less favourable than those established by law, collective agreement or arbitration award for work of the same nature in the same district. As explained in the Practical Guide prepared by the Office in 2008 (page 17), Convention No. 94 is about procurement contracts in the public sector, not about the employment contracts of public employees. The Committee recalls that it has been drawing the Government’s attention to the main requirements of the Convention for more than a decade and has been suggesting measures to supplement the public procurement legislation, especially section 44 of Act No. 8666 of 1993 and Normative Instruction No. 8 of 1994. The Committee accordingly urges the Government to take action in order to bring its legislation into full conformity with the requirements of the Convention.

[The Government is asked to reply in detail to the present comments in 2012.]

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The Committee notes with regret that the Government’s report has not been received. It must therefore repeat its previous observation which read as follows:

Article 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes that the Government referred to Technical Note No. 0138/2002 and reiterated the view that there was no need to insert labour clauses into public contracts because the workers’ rights were protected by the general labour legislation, by the terms of the individual contracts and by the monitoring activities of the labour inspection services. The Committee would appreciate receiving a copy of the above technical note.

In view of the Government’s continued failure to implement the basic requirements of the Convention, the Committee wishes once again to draw attention to the following: (i) the rationale of the Convention is to ensure – through the insertion of specific labour clauses in all public contracts – that workers engaged in the execution of public contracts enjoy wage and other working conditions not less favourable than those established by law, collective agreement or arbitration award for work of the same nature in the same district; (ii) since labour laws and regulations normally set out minimum standards which are susceptible to being improved through collective bargaining, it is evident that the mere fact that the general labour legislation applies also to public contracts is not sufficient in itself to ensure the most advantageous pay and working conditions to the workers concerned; and (iii) to ensure compliance with the terms of labour clauses, the Convention requires concrete measures for adequate publicity (posting of notices) and an adequate system of sanctions (withholding of contracts or withholding of payments) that go beyond the enforcement measures often provided for in the general labour legislation.

The Committee has been pointing out that, even though the public procurement legislation, especially section 44 of Act No. 8666 of 1993 on public tendering and Normative Instruction No. 8 of 1994, may be considered to give partial effect to the requirements of the Convention, i.e. as regards the level of wages of the workers employed by public contractors, additional measures are needed in order to attain full legislative conformity with all the provisions of the Convention. The Committee recalls that the Government may avail itself of the technical assistance and expert advice of the Office should it so wish with a view to addressing the concerns outlined above.

Moreover, the Committee notes that the Government has not supplied in recent years any information of a practical nature concerning the application of the Convention. It therefore asks the Government to make every possible effort to collect and transmit, in accordance with Part V of the report form, up to date information on the average number of public contracts granted annually and the approximate number of workers engaged in their execution, inspection results showing the number and nature of contraventions observed, extracts from official documents or studies – such as activity reports of the Department of Logistics and General Services or of the Inspector of Contracts (fiscal de contrato) – addressing issues connected with the social dimensions of public procurement, as well as any other particulars which would enable the Committee to have a clear understanding of the manner in which the Convention is applied in practice.

Finally, the Committee takes this opportunity to refer to its 2008 General Survey on labour clauses in public contracts which contains an overview of public procurement practices and procedures in so far as labour conditions are concerned and makes a global assessment of the impact and present-day relevance of Convention No. 94.

The Committee hopes that the Government will make every effort to take the necessary action in the very near future.

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The Committee notes that the Government’s report has not been received. It must therefore repeat its previous observation which read as follows:

The Committee notes that the Government referred to Technical Note No. 0138/2002 and reiterated the view that there was no need to insert labour clauses into public contracts because the workers’ rights were protected by the general labour legislation, by the terms of the individual contracts and by the monitoring activities of the labour inspection services. The Committee would appreciate receiving a copy of the above technical note.

In view of the Government’s continued failure to implement the basic requirements of the Convention, the Committee wishes once again to draw attention to the following: (i) the rationale of the Convention is to ensure – through the insertion of specific labour clauses in all public contracts – that workers engaged in the execution of public contracts enjoy wage and other working conditions not less favourable than those established by law, collective agreement or arbitration award for work of the same nature in the same district; (ii) since labour laws and regulations normally set out minimum standards which are susceptible to being improved through collective bargaining, it is evident that the mere fact that the general labour legislation applies also to public contracts is not sufficient in itself to ensure the most advantageous pay and working conditions to the workers concerned; and (iii) to ensure compliance with the terms of labour clauses, the Convention requires concrete measures for adequate publicity (posting of notices) and an adequate system of sanctions (withholding of contracts or withholding of payments) that go beyond the enforcement measures often provided for in the general labour legislation.

The Committee has been pointing out that, even though the public procurement legislation, especially section 44 of Act No. 8666 of 1993 on public tendering and Normative Instruction No. 8 of 1994, may be considered to give partial effect to the requirements of the Convention, i.e. as regards the level of wages of the workers employed by public contractors, additional measures are needed in order to attain full legislative conformity with all the provisions of the Convention. The Committee recalls that the Government may avail itself of the technical assistance and expert advice of the Office should it so wish with a view to addressing the concerns outlined above.

Moreover, the Committee notes that the Government has not supplied in recent years any information of a practical nature concerning the application of the Convention. It therefore asks the Government to make every possible effort to collect and transmit, in accordance with Part V of the report form, up to date information on the average number of public contracts granted annually and the approximate number of workers engaged in their execution, inspection results showing the number and nature of contraventions observed, extracts from official documents or studies – such as activity reports of the Department of Logistics and General Services or of the Inspector of Contracts (fiscal de contrato) – addressing issues connected with the social dimensions of public procurement, as well as any other particulars which would enable the Committee to have a clear understanding of the manner in which the Convention is applied in practice.

Finally, the Committee takes this opportunity to refer to its 2008 General Survey on labour clauses in public contracts which contains an overview of public procurement practices and procedures in so far as labour conditions are concerned and makes a global assessment of the impact and present-day relevance of Convention No. 94.

The Committee hopes that the Government will make every effort to take the necessary action in the very near future.

For all useful purposes, the Committee attaches herewith a copy of a Practical Guide, prepared by the Office principally on the basis of the abovementioned General Survey, to help better understand the requirements of the Convention and ultimately improve its application in law.

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The Committee notes the Government’s explanations in reply to its previous observations. The Government refers to Technical Note No. 0138/2002 and reiterates the view that there is no need to insert labour clauses into public contracts because the workers’ rights are protected by the general labour legislation, by the terms of the individual contracts and by the monitoring activities of the labour inspection services. The Committee would appreciate receiving a copy of the above technical note.

In view of the Government’s continued failure to implement the basic requirements of the Convention, the Committee wishes once again to draw attention to the following: (i) the rationale of the Convention is to ensure – through the insertion of specific labour clauses in all public contracts – that workers engaged in the execution of public contracts enjoy wage and other working conditions not less favourable than those established by law, collective agreement or arbitration award for work of the same nature in the same district; (ii) since labour laws and regulations normally set out minimum standards which are susceptible to being improved through collective bargaining, it is evident that the mere fact that the general labour legislation applies also to public contracts is not sufficient in itself to ensure the most advantageous pay and working conditions to the workers concerned; and (iii) to ensure compliance with the terms of labour clauses, the Convention requires concrete measures for adequate publicity (posting of notices) and an adequate system of sanctions (withholding of contracts or withholding of payments) that go beyond the enforcement measures often provided for in the general labour legislation.

The Committee has been pointing out for the last 12 years that, even though the public procurement legislation, especially section 44 of Act No. 8666 of 1993 on public tendering and Normative Instruction No. 8 of 1994, may be considered to give partial effect to the requirements of the Convention, i.e. as regards the level of wages of the workers employed by public contractors, additional measures are needed in order to attain full legislative conformity with all the provisions of the Convention. The Committee recalls that the Government may avail itself of the technical assistance and expert advice of the Office should it so wish with a view to addressing the concerns outlined above.

Moreover, the Committee notes that the Government has not supplied in recent years any information of a practical nature concerning the application of the Convention. It therefore asks the Government to make every possible effort to collect and transmit, in accordance with Part V of the report form, up to date information on the average number of public contracts granted annually and the approximate number of workers engaged in their execution, inspection results showing the number and nature of contraventions observed, extracts from official documents or studies – such as activity reports of the Department of Logistics and General Services or of the Inspector of Contracts (fiscal de contrato) – addressing issues connected with the social dimensions of public procurement, as well as any other particulars which would enable the Committee to have a clear understanding of the manner in which the Convention is applied in practice.

Finally, the Committee seizes this opportunity to refer to this year’s General Survey which contains an overview of public procurement practices and procedures in so far as labour conditions are concerned and makes a global assessment of the impact and present day relevance of Convention No. 94.

[The Government is asked to reply in detail to the present comments in 2008.]

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With reference to its previous observations, the Committee notes the Government’s detailed report and attached documents, including Decree No. 2271/97 and Directive (Instrução Normativa) IN/Mare No. 18/97 relating to procedures preparatory to tendering and subcontracted services.

The Committee has been drawing the Government’s attention for some years to Article 2(1) of the Convention under which the labour clauses in public contracts should ensure to the workers concerned not only wages but also hours of work and other labour conditions not less favourable than those established for similar work, in the trade or industry concerned, in the same district, whether by collective agreements or by arbitration awards or by national legislation. In its report, the Government states that labour legislation is of general application and mandatory and therefore the inclusion of labour clauses directly related to hours of work and labour conditions other than wages is superfluous.

The Committee wishes to emphasize that the insertion of labour clauses covering all the employment conditions of persons engaged in the execution of public contracts constitutes the basic requirement of the Convention and the best guarantee that such workers enjoy conditions as favourable as those which may have been collectively negotiated and obtained by workers employed in similar work in the same district. It should therefore be clear that where collective agreements grant additional benefits or provide for higher standards than those established under labour laws in general, or where collective agreements are not generally binding, a mere reference to the relevant provisions of the national legislation would be insufficient for the purpose of giving effect to the Convention. The Committee hopes that the Government will soon take steps to bring its legislation into full conformity with the requirements of the Convention in this regard. It also reiterates its suggestion that in addressing these matters, the Government might wish to have recourse to the Office’s technical advice.

Moreover, the Committee once again requests the Government to provide in accordance with Article 6 of the Convention and Part V of the report form all available information on the application of the Convention in practice, including for instance copies of public contracts containing labour clauses, official reports or statistics bearing on the enforcement of relevant legislation (e.g. number and nature of infringements observed and penalties imposed) and any other particulars regarding the practical fulfilment of the conditions prescribed by the Convention.

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In its previous observation, the Committee noted Act No. 8883 of 8 June 1994 and Normative Instructions of the Secretariat for the Federal Administration (SAF) No. 8 of 26 August 1994, and No. 13 of 21 October 1994, relating to standards on public administration tenders and contracts. It noted that the provision of section 44, paragraph 3, of Act No. 8666 of 21 June 1993, as amended by Act No. 8883, is still maintained, according to which a contract proposal can be accepted only if the overall or partial sums it contains are compatible with the prices of inputs and market wages. It further noted that Normative Instruction No. 8 includes provisions that the cost of labour remuneration in a contract proposal should refer to the remuneration fixed for the occupational category by collective labour agreements or other equivalent, including wages and other advantages established in labour legislation. The Committee considered that these provisions serve the purpose of ensuring to the workers employed by public contractors that the level of wages is not less favourable than the prevailing market wage.

The Committee however pointed out that the requirements of Article 2, paragraphs 1 and 2, of the Convention relate not only to the level of wages but also to the labour conditions such as hours of work and holidays. It therefore requested the Government to indicate the measures taken or envisaged to ensure that the workers concerned also enjoy labour conditions other than wages that are not less favourable than normally observed for a similar kind of work in the district.

The Committee notes that further information has been supplied by the Government concerning the efforts to regulate certain aspects of public contractors, for example regarding social security. The Government also mentions fringe benefits such as transport coupons and food tickets to be provided by public contractors engaged by the Federal Administration for cleaning and security guard services. The Committee notes, however, that such measures are not sufficient to fulfil the above-mentioned requirement of the Convention. It again recalls that the Convention stipulates, for this purpose, the insertion of appropriate labour clauses in public contracts, and suggests that the Government consider consulting the International Labour Office on further necessary steps to apply the Convention in this respect.

The Committee also requests the Government to supply information on the application of the Convention in practice, including, for instance, extracts from official reports, and cases in which tenders for public contracts have been refused because of the incompatibility of the calculated cost with market wages, under section 44, paragraph 3, of Act No. 8666.

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With reference to its previous observations, the Committee notes the information supplied by the Government in its report, including Act No. 8883 of 8 June 1994 and Normative Instructions of the Secretariat for the Federal Administration (SAF) No. 8 of 26 August 1994, and No. 13 of 21 October 1994, relating to standards on public administration tenders and contracts.

The Committee notes that the provision of section 44, paragraph 3, of Act No. 8666 of 21 June 1993, as amended by Act No. 8883, is still maintained, according to which a contract proposal can be accepted only if the overall or partial sums it contains are compatible with the prices of inputs and market wages. It further notes that Normative Instruction No. 8 includes provisions that the cost of labour remuneration in a contract proposal should refer to the remuneration fixed for the occupational category by collective labour agreements or other equivalent, including wages and other advantages established in labour legislation. The Committee considers that these provisions serve the purpose of ensuring to the workers employed by public contractors that the level of wages is not less favourable than the prevailing market wage.

The Committee would however point out that the requirements of Article 2, paragraphs 1 and 2, of the Convention relate not only to the level of wages but also to the labour conditions such as hours of work and holidays. It therefore requests the Government to indicate the measures taken or envisaged to ensure that the workers concerned also enjoy labour conditions other than wages that are not less favourable than normally observed for a similar kind of work in the district.

The Committee notes that further information has been supplied by the Government concerning the efforts to streamline the administrative process of services and supplies, including the requirement of a proof of up-to-date payment of social contributions, but would add that such a measure is not sufficient to fulfil the above-mentioned requirement of the Convention. It again recalls that the Convention stipulates, for this purpose, the insertion of appropriate labour clauses in public contracts, and suggests that the Government consider consulting the International Labour Office on further necessary steps to apply the Convention in this respect.

The Committee also requests the Government to supply information on the application of the Convention in practice, including, for instance, extracts from official reports, and cases in which tenders for public contracts have been refused because of the incompatibility of the calculated cost with market wages, under section 44, paragraph 3, of Act No. 8666.

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Further to its previous observations, the Committee notes the information supplied by the Government in its report, including the information on the temporary contract of exceptional public interest. It notes in particular the Government's reference to section 44, paragraph 3, of Act No. 8666 of 21 June 1993, which sets out standards on public administration tenders and contracts. Under this provision, a proposal of contract can be accepted only if the overall or partial sums it contains are compatible with the prices of inputs and market wages. The Committee also notes the attached text of Decree No. 1054 of 7 February 1994, which regulates the readjustment of prices in contracts with the federal Government which, in particular in section 4, requires the proposal to present prices consistent with those prevailing in the market.

The Committee would point out that the aim of Article 2, paragraphs 1 and 2, of the Convention is to ensure that the workers concerned enjoy wages and other labour conditions not less favourable than those normally observed for the similar kind of work in the district.

The question therefore relates not only to the wages but also to other conditions of work such as hours of work and holidays. The Convention requires, for this purpose, the insertion of appropriate labour clauses in public contracts.

In this connection, the Committee notes with interest the Government's indication that the Secretariat for the Federal Administration (SAF/PR) is currently in the process of producing Administrative Orders and model contracts, where the Committee's concern is taken into account. It would draw the Government's attention to Article 2, paragraph 3, of the Convention, under which the competent authority should determine the terms of the labour clauses to be included in public contracts in the manner considered most appropriate to the national conditions, after consultation with the employers' and workers' organizations concerned.

The Committee requests the Government to provide information on progress made as regards these Administrative Orders and model contracts, as well as information on the application of the Convention in practice, including for instance, extracts from official reports, showing the manner in which the above-mentioned section 44, paragraph 3, of Act No. 8666 of 1993 is applied in concrete cases, in accordance with point V of the report form.

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Further to its previous observations, the Committee notes the Government's report as well as the attached Act No. 8666 of 21 June 1993, which sets out standards on public administration tenders and contracts.

The Committee notes the Government's indication that, under section 88 of the Act providing for the disqualification of any contracting party that has acted illegally with intent to impede compliance with bidding objectives, failure to comply with collective agreements should give rise to appropriate action. The Committee would point out that the aim of Article 2, paragraphs 1 and 2 of the Convention is to ensure that the workers concerned enjoy wages and other labour conditions not less favourable than those normally observed for the kind of work in question, whether such workers are covered by collective agreement or not. The Convention requires, for this purpose, the insertion of appropriate labour clauses in public contracts. The provisions of the Act cited by the Government (such as section 3, paragraph 1, item II, prohibiting differential treatment between Brazilian and foreign enterprises in various aspects including labour, section 29, item IV requiring a proof of up-to-date payment of social contributions, section 71 providing for the contracting parties' responsibility for labour, social security and other contributions) are not sufficient to fulfil this requirement of the Convention.

The Committee again suggests that the Government consider consulting the International Labour Office when taking necessary steps to apply the Convention, for example, by amending the above-mentioned Act to add labour clauses in the obligatory clauses for public contracts under its section 55 or by stipulating the insertion of such clauses in public contracts by means of regulations concerning the application of the Act or of forms for tendering. The Committee also points out, under Article 2, paragraph 3, the competent authority is to determine the terms of the labour clauses to be included in public contracts in the manner considered most appropriate to the national conditions, after consultation with the employers' and workers' organizations concerned.

The Committee hopes that the Government will soon be able to ensure the conformity with the provisions of the Convention.

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With reference to its previous observations, the Committee notes that the Government considers the Convention to be applied, in practice, through the provisions of the legislation in force.

The Committee once again wishes to point out that the aim of Article 2, paragraphs 1 and 2, of the Convention is to ensure that, through the insertion of appropriate labour clauses in public contracts, the workers employed by a contractor and paid indirectly out of public funds enjoy wages and conditions of labour which are not less favourable than those of other workers doing similar work. The additional protection afforded by these labour clauses in public contracts is deemed to be necessary because this category of workers may not be covered by collective agreements and other measures regulating wages, and is often more exposed than others because of the competition between firms tendering for public contracts.

In this connection the Committee notes that under Article 2, paragraph 3, the terms of the clauses to be included in contracts shall be determined by the competent authority, in the manner considered most appropriate to the national conditions, after consultation with the organizations of employers and workers concerned. Such clauses may, for instance, be inserted into public contracts through regulations or other instrument such as an administrative decree, and not necessarily through legislation (cf. Article 4). The Committee again suggests that the Government consider consulting the Office when taking the necessary steps to apply the Convention. It hopes that the Government will soon be able to ensure the conformity of public contracts with the provisions of the Convention.

[The Government is asked to report in detail for the period ending 30 June 1993.]

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With reference to its previous observation, the Committee notes the Government's statement in its report that, while the Government considers that the practical application of the Convention is already ensured, the Ministry of Labour and Welfare is conducting studies with the view of revising legislation so as to fulfil all the requirements of the Convention. It also notes that the Government requests, in this regard, the collaboration of the International Labour Office with a view to elaborating draft legislation which ensures the application of the Convention in all of its terms.

The Committee trusts that the Government will take, in the very near future with the collaboration of the Office, necessary measures to ensure that all contracts with a public authority (as defined in Article 1, paragraph 1(c), of the Convention) include clauses guaranteeing that all workers concerned receive wages and conditions of employment not less favourable than those established for work of the same character as required by Article 2, paragraphs 1 and 2. It hopes that the Government will supply information on the steps taken.

[The Government is asked to report in detail for the period ending 30 June 1992.]

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The Committee notes the explanations in the Government's report, those given in the Conference Committee in 1990, and the discussion which that Committee had.

The Government indicated in its report and in the Conference Committee that the application of the Convention is guaranteed by the national Constitution, by labour legislation and by collective agreements. In fact, the clauses deriving from collective bargaining in the widest sense are said to benefit all workers of the same category, whether they are in private undertakings or public administration. The Committee must again stress that it is not sufficient to ensure the application of the Convention that national labour legislation applies to all workers - as it does in Brazil - but that the Convention requires all contracts with a public authority (as defined in Article 1(1)(c) of the Convention) to include a clause guaranteeing that all workers covered by the contract receive wages and conditions of employment not less favourable than those established for work of the same kind, by any of the methods laid down in Article 2(1) and (2). There is no such clause in public contracts in Brazil, and this is not in conformity with the Convention.

The Government has however repeatedly stated that there is no need to comply formally with the Convention for the reasons given above. The Committee observes that the methods laid down in Article 2 for determining the conditions of work covered by labour clauses in public contracts include legislation and collective agreements. Since the Government indicates that clauses in collective agreements are applied to all workers, the Committee would be glad if it would indicate how it is ensured that collective agreements are applicable to all workers, including those not covered by them.

The Committee again expresses the hope that the Government will take account of these considerations when revising the legislation to apply the Convention. It again suggests that the Government consider consulting the Office in drafting legislation to apply the Convention. It hopes the Government will supply information on the steps taken.

[The Government is asked to report in detail for the period ending 30 June 1991.]

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In its previous comments, the Committee noted the observations submitted by the National Confederation for Industry and the National Confederation of Industrial Workers which were transmitted to the Government in letters dated 23 November and 18 December 1987 respectively, so that it could make such comments as it deemed appropriate. Since the Government has not yet transmitted its comments, the Committee hopes that it will communicate them in the near future.

The Committee also noted the Government's statement that the labour legislation was in the process of being revised and that provisions to give effect to the Convention would be taken into account during the revision. Accordingly, the Committee asked the Government to indicate the measures adopted or envisaged to ensure that full effect is given to the Convention. Since the Government has not submitted a report for the fourth consecutive time, the Committee has no information on the progress achieved in this respect. The Committee recalls in this connection that merely applying the national labour legislation to all workers - as is the case in Brazil - is not sufficient to ensure the application of the Convention which provides that all public contracts (as defined in Article 1, paragraph 1(c), of the Convention) must include a clause ensuring to the workers concerned wages and other conditions of labour which are not less favourable than those established for work of the same character, by some of the means provided for in Article 2, paragraphs 1 and 2, of the Convention. The Committee recalls that this does not mean simply that there shall be a contractual obligation to pay wages and provide other conditions of labour in accordance with the minimum wage established by legislation, or by collective agreements if they are already applicable to the undertaking concerned. Rather, it means that if an undertaking performing work under public contract is not, for example, bound by a collective agreement but pays wages at the legal minimum, it would be obliged to pay wages at the established rate. This rate might be defined, inter alia, by reference to the collective agreements applicable to other workers of the same type, or by a survey of the generally prevailing wage rates in that area (Article 2, paragraphs 1 and 2).

The Committee hopes that the above-mentioned revision of the labour legislation will be able to take account of these considerations, and in view of the exchanges which have taken place concerning the provisions of the Convention during a number of years, the Committee again suggests that the Government may wish to ask the International Labour Office for assistance before finalising any draft text it may draw up in this connection. The Committee hopes that the Government will supply information on the measures taken to give effect to the Convention. [The Government is asked to supply full particulars to the Conference at its 77th Session.]