Labour Clauses (Public Contracts) Convention, 1949 (No. 94) - Bulgaria (Ratification: 1955)

Observation (CEACR) - adopted 2017, published 107th ILC session (2018)

The Committee notes the observations made by the Confederation of Independent Trade Unions in Bulgaria (KNSB/CITUB) received on 1 September 2016. The Committee requests the Government to provide its comments in this respect.

Article 2 of the Convention. Insertion of labour clauses in public contracts. In its previous comments, the Committee asked the Government to take without further delay all necessary action in order to give full effect to the Convention and to keep the Office informed of any progress made in this regard. In this context, the Committee takes note with interest of the adoption of the new Public Procurement Act (PPA), which entered into force on 15 April 2016. In its observations, the CITUB indicates that the PPA seeks to establish a new regulatory framework aligned with the EU Directive 2014/24/EC on public procurement. The CITUB adds that it participated actively in the discussions on the draft PPA and expresses its satisfaction with the text adopted, which it considers to be in conformity with the provisions of the Convention. The Government indicates that the PPA aims to increase the efficiency of public spending as well as to use public procurement to support common goals of a public nature, including implementation of labour law measures. The Committee notes the Government’s statement that section 115 of the PPA requires contractors and their subcontractors to observe all applicable rules and requirements, related to environment protection, social and labour law, applicable collective agreements and provisions of international environmental, social and labour law listed in Annex 10 and section 107(2) of the PPA. Moreover, the Government indicates that, according to section 47(1)–(3) of the PPA, the contracting authorities are entitled to include specific conditions for implementing the contract relating to employment protection and working conditions in force in the country. The Committee notes that contracting authorities are not merely entitled to include labour clauses in public contracts, but that this is the central obligation under Article 2 of the Convention. In its General Survey concerning Labour Clauses in Public Contracts, 2008, paragraph 40, the Committee stated that “the essential purpose of Convention No. 94 and Recommendation No. 84 is to ensure that workers employed by a contractor and paid indirectly out of public funds enjoy wages and conditions of labour normally established for the type of work concerned, whether they are established by collective agreement or otherwise, in the locality where the work is done. The Convention requires that this be done through the insertion of appropriate labour clauses in public contracts.” The Committee takes notes of the Government’s indications regarding section 32 of the PPA, which stipulates that contracting authorities shall provide unlimited, complete, free and direct access through electronic media to the documentation for public procurements. With regard to the obligation of ensuring effective enforcement through a system of inspection and adequate sanctions, the Government indicates that, according to section 175(5) of the PPA, the contracting authority is entitled to reject subcontractors if they do not meet the selection criteria specified in the notice and documentation, including the requirements relating to labour law. In its observations, the CITUB notes that the PPA guarantees that candidates who have infringed the provisions of the labour law relating to wages in implementing a public contract will be excluded from public procurement procedures. It expresses its concern that the PPA does not apply the same requirements to subcontractors as to contractors, and that therefore workers employed by subcontractors may not have sufficient protection of their salary and contributions. The Committee requests the Government to indicate the manner in which it is ensured that labour clauses of the type specified in Article 2 of the Convention are contained in all public contracts falling within the scope of Article 1 of the Convention and that they ensure to the workers of contractors or subcontractors payment of wages and other working conditions not less favourable than those established for work of the same character in the same area by collective agreement, arbitration award or national laws or regulations. The Committee requests the Government to transmit copies of standard bidding documents currently in use. It also requests the Government to indicate the measures taken to ensure the posting of notices in conspicuous places at the workplace with a view to informing the workers of their conditions of work.

Application of the Convention in practice. Labour inspection. The Committee requests the Government to provide information on the manner in which the Convention is applied, including statistics on the number of inspections, the number and type of infractions detected and the sanctions applied.

Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

Article 2 of the Convention. Insertion of labour clauses in public contracts. Further to its previous comments, the Committee notes the information contained in the Government’s report concerning the latest amendments to the Public Procurement Act and implementing Regulations and Ordinances, especially as regards the appeals procedure and the grounds of nullity of public procurement contracts. It also notes the Government’s explanations concerning the assistance to tenderers provided by the Public Procurement Agency (PPA), including through direct consultations, written replies to individual requests, hot phone lines and electronic services.

The Committee observes, however, that the Government’s report does not contain any references to legislative or administrative measures implementing the specific requirements of the Convention, the only relevant provision in the current legislation being section 56(1)(11) of the Public Procurement Act which requires tenderers to declare when bidding that they have taken into consideration the minimum labour cost requirements. The Committee further notes that the standardized public procurement contract available on PPA’s website does not contain any clauses concerning the terms of employment and working conditions of workers engaged in the execution of public contracts.

The Committee therefore regrets that the Government has still not taken any steps to give effect to the basic requirements of the Convention, namely: (i) the insertion in all public contracts falling within the scope of Article 1 of the Convention of labour clauses – drafted after consultation with employers’ and workers’ organizations – ensuring to the workers concerned wages and other working conditions not less favourable than those established for work of the same character in the same area by collective agreement, arbitration award or national laws or regulations; (ii) the notification of the terms of the clauses, by advertising specifications or otherwise; (iii) the posting of notices in conspicuous places at the workplace with a view to informing the workers of their conditions of work; and (iv) the effective enforcement through a system of inspection and adequate sanctions, including the withholding of contracts and the withholding of payments, for failure to observe and apply the provisions of labour clauses.

In this connection, the Committee wishes once more to refer to its General Survey of 2008 concerning labour clauses in public contracts, in which it indicated that the idea behind the adoption of minimum labour standards in the field of public procurement is that public authorities should concern themselves with the working conditions under which the operations in question are carried out. The concern stems from the fact that government contracts are usually awarded to the lowest bidder and that contractors may be tempted, in view of the competition involved, to economize on labour costs. The Committee also indicated that the insertion of appropriate labour clauses has the effect of setting as minimum conditions for the contract standards that are already established within the locality, and that labour costs are thus removed from competition between bidders (paragraphs 2 and 40). While recognizing the Government’s efforts in promoting conditions of fair competition and transparency in public procurement operations, the Committee stresses that, under this Convention, the Government is also under the obligation to ensure that workers employed by a contractor and paid indirectly out of public funds enjoy wages and conditions of labour which are at least as satisfactory as the wages and conditions of labour normally established for the type of work concerned, which implies that local standards higher than those of general application should be applied, where they exist. The Committee again urges the Government to take without further delay all necessary action in order to give full effect to the Convention and to keep the Office informed of any progress made in this regard.

Observation (CEACR) - adopted 2011, published 101st ILC session (2012)

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

Repetition

Article 2 of the Convention. Insertion of labour clauses in public contracts. Further to its previous observation, the Committee notes with regret to note that the Government is still not in a position to report any concrete progress in giving effect to the principal obligation of the Convention, i.e. the insertion of the labour clause prescribed by Article 2 in all public contracts falling within its scope. The Government refers to three different provisions of the Public Procurement Act (SG No. 28/06.04.2004) which transpose corresponding provisions of the EU public procurement directive 2004/18/EC but which bear no or little relationship to the specific requirements of the Convention. More concretely, sections 16c and 26 of the Public Procurement Act deal with situations where States may use procurement operations as a means to pursue broader public policy objectives such as environmental protection or the promotion of employment of vulnerable groups (e.g. persons with disabilities), whereas section 56 of the same Act requires tenderers to declare that in drawing up their offer they have taken into account existing regulations concerning minimum wage levels. As the Committee has pointed out in paragraphs 242 and 248 of its 2008 General Survey on labour clauses in public contracts, even though there is no contradiction between the requirements of ILO Convention No. 94 and the principles set out in the two EU public procurement directives, these directives do not specify a level of employment protection or the working conditions required in the performance of a contract as the Convention does. The Committee further refers to paragraph 46 of the same General Survey in which it observed that Convention No. 94 calls for the insertion of labour clauses of a very specific content which should not be confused with clauses related to equal remuneration and gender equality, such as those including affirmative action measures (e.g. measures to promote the employment of women or addressing discrimination through a system of quotas), or yet other clauses requiring compliance with core labour standards (e.g. those aimed at preventing the use of child labour and anti-union practices).

In view of the Government’s continued failure to implement the basic requirement 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 the most advantageous wage and other working conditions among 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 of 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 to the workers concerned the most advantageous pay and working conditions established for work of the same character in the district concerned; (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 therefore urges the Government to adopt without delay the necessary measures in order to give full effect to the requirements of the Convention and recalls that the Government may draw upon the advisory services of the Office to this effect.

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

Observation (CEACR) - adopted 2009, published 99th ILC session (2010)

Article 2 of the Convention. Insertion of labour clauses in public contracts. Further to its previous observation, the Committee notes with regret to note that the Government is still not in a position to report any concrete progress in giving effect to the principal obligation of the Convention, i.e. the insertion of the labour clause prescribed by Article 2 in all public contracts falling within its scope. The Government refers to three different provisions of the Public Procurement Act (SG No. 28/06.04.2004) which transpose corresponding provisions of the EU public procurement directive 2004/18/EC but which bear no or little relationship to the specific requirements of the Convention. More concretely, sections 16c and 26 of the Public Procurement Act deal with situations where States may use procurement operations as a means to pursue broader public policy objectives such as environmental protection or the promotion of employment of vulnerable groups (e.g. persons with disabilities), whereas section 56 of the same Act requires tenderers to declare that in drawing up their offer they have taken into account existing regulations concerning minimum wage levels. As the Committee has pointed out in paragraphs 242 and 248 of its 2008 General Survey on labour clauses in public contracts, even though there is no contradiction between the requirements of ILO Convention No. 94 and the principles set out in the two EU public procurement directives, these directives do not specify a level of employment protection or the working conditions required in the performance of a contract as the Convention does. The Committee further refers to paragraph 46 of the same General Survey in which it observed that Convention No. 94 calls for the insertion of labour clauses of a very specific content which should not be confused with clauses related to equal remuneration and gender equality, such as those including affirmative action measures (e.g. measures to promote the employment of women or addressing discrimination through a system of quotas), or yet other clauses requiring compliance with core labour standards (e.g. those aimed at preventing the use of child labour and anti-union practices).

In view of the Government’s continued failure to implement the basic requirement 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 the most advantageous wage and other working conditions among 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 of 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 to the workers concerned the most advantageous pay and working conditions established for work of the same character in the district concerned; (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 therefore urges the Government to adopt without delay the necessary measures in order to give full effect to the requirements of the Convention and recalls that the Government may draw upon the advisory services of the Office to this effect.

Moreover, while noting the statistical information provided by the Government concerning the number of public contracts awarded in the period 2006–08, the Committee would be grateful if the Government would continue to communicate up to date information regarding the practical application of the Convention, including statistical data on the number of public contracts awarded during the reporting period, the approximate number of workers involved in their execution, copies of standard bidding documents, official documents such as annual activity reports of the Public Procurement Agency, etc.

Finally, the Committee attaches herewith a copy of the Practical Guide on Convention No. 94 which was prepared by the Office in September 2008 based on the conclusions of the aforementioned General Survey to help better understand the requirements of the Convention and ultimately improve their application in law and practice.

Observation (CEACR) - adopted 2007, published 97th ILC session (2008)

The Committee notes the information contained in the Government’s report, in particular the adoption of the new Public Procurement Act (SG No. 28/06.04.2004) and its implementing Rules (SG No. 84/27.09.2004). It also notes the establishment of the Public Procurement Agency, an organization responsible for assisting the implementation of national policy in the area of public procurement, as well as the introduction of a Public Procurement Register with a view to ensuring openness and transparency in public procurement. The Committee further notes the adoption of the Ordinance on small public procurement contracts 249/2004 which imposes strict rules even for low-value contracts.

While noting the latest amendments made in view of the harmonization with European Union directives on public procurement, the Committee regrets that the new public procurement legislation – like the previous legislation adopted in 1999 – fails to provide for the insertion of labour clauses in public contracts as required under Article 2, paragraph 1, of the Convention. In fact, the only provision concerning the pay conditions of workers engaged in the execution of public contracts is found in section 56(1) of the Public Procurement Act which requires each tender for public works to contain, among other indications and guarantees, a declaration to the effect that the price tendered complies with the minimum labour cost requirements. As for the term “minimum labour cost”, this is defined in section 147(1) of the same Act as the minimum monthly income, differentiated by sector and occupation, and used as a base for the calculation of social security contributions.

The Committee recalls that the mere fact that the labour legislation is applicable to workers engaged in the context of public contracts does not in any way exempt the Government from providing for the inclusion in public contracts of the labour clauses envisaged in the Convention. Such inclusion ensures the protection of workers in cases in which the legislation only establishes minimum conditions of work (e.g. minimum pay rates) which may be exceeded by general or sectoral collective agreements. Moreover, even if collective agreements were applicable to workers engaged in the context of the execution of public contracts, the implementation of the Convention retains its full value in so far as its provisions are designed precisely to ensure the specific protection needed by such workers. For example, the Convention requires the adoption by the competent authorities of measures, such as the advertisement of specifications, to ensure that tenderers have advance knowledge of the terms of the labour clauses (Article 2, paragraph 4). It also requires notices to be posted in conspicuous places at the workplace to inform workers of the conditions of work applicable to them (Article 4(a)). Finally, it provides for sanctions in the event of non-compliance with the terms of labour clauses, such as the withholding of contracts or the withholding of payments due to contractors (Article 5), which may be more directly effective than those available for violations of the general labour legislation.

The Committee hopes that the Government will adopt without delay the necessary measures in order to give full effect to the requirements of the Convention. It recalls, in this connection, that the Government may draw upon the advisory services of the Office should it so wish for the purpose of addressing the issues highlighted 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 Public Procurement Agency – addressing the social aspects 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.]

Direct Request (CEACR) - adopted 2001, published 90th ILC session (2002)

The Committee notes the information provided in the Government’s report, and in particular the adoption of the new Public Procurement Act (SG No. 56/1999). In this connection, the Committee wishes to draw attention to the following points.

Articles 2 and 5 of the Convention. The Committee notes that the Public Procurement Act does not lay down the insertion of labour clauses in public contracts nor does it provide for adequate sanctions applicable in the event of failure to observe such clauses. Recalling that this Convention cannot be considered to be applied unless these two central requirements are fully met, the Committee stresses the need for appropriate action to give effect to the above Articles as a matter of priority. The Committee recalls that public contracts under the scope of application of the Convention must contain clauses ensuring to the workers concerned wages (including allowances), hours of work and other conditions of labour which are not less favourable than those established for work of the same character in the trade or industry concerned in the same district. The Committee also recalls that the terms of the clauses to be included in contracts have to be determined after consultation with the organizations of employers and workers concerned and trusts that the necessary steps will soon be taken to give legislative expression to the requirements of the Convention with respect to labour clauses and adequate sanctions. The Committee asks the Government to supply in its next report information on any progress achieved in this regard.

Moreover, the Committee would appreciate if the Government, in adopting new legislation making provision for labour clauses and relevant sanctions, would also consider measures for the application of the Convention to work carried out by subcontractors (Article 1(3)); the possible exemption of contracts below a fixed limit, or of persons occupying managerial or technical positions, from the application of the Convention (Article 1(4) and (5)); the posting of relevant notices in conspicuous places at the workplace (Article 4(a)(iii)); and suitable arrangements to ensure effective enforcement, e.g. maintenance of adequate records and effective inspection (Article 4(b)).

Direct Request (CEACR) - adopted 1995, published 83rd ILC session (1996)

The Committee notes the Government's indication in the report that there are no changes in the field of public contracts.

The Committee recalls that it noted in its comments in 1968 that there were at that time no public contracts as defined in the Convention and that there was therefore no need to consider the question of special measures to implement the Convention. It notes that, under section 61 of the present Labour Code (SG Nos. 26 and 27 of 1986 as so far amended by No. 100 of 1992), it is possible to have an employment contract between a worker and an employer who is not necessarily a public authority, but who employs workers for the execution of a public contract.

The Committee would be grateful if the Government would indicate whether there exist now public contracts that fall within the scope of the Convention, that is, a contract concluded between a public authority and another party which employs workers for the execution of the contract (Article 1(1) of the Convention). If so, please supply information on any measures taken to give effect to the provisions of the Convention.