Labour Clauses (Public Contracts) Convention, 1949 (No. 94) - North Macedonia (Ratification: 2010)

Direct Request (CEACR) - adopted 2020, published 109th ILC session (2021)

The Committee notes the supplementary information provided by the Government in light of the decision adopted by the Governing Body at its 338th Session (June 2020). The Committee therefore examines the application of the Convention on the basis of the supplementary information received from the Government this year, as well as on the basis of the information at its disposal in 2019.

Application of the Convention. Part V of the report form.  In its previous comments, the Committee requested the Government to provide a detailed report with full particulars on each of the provisions of the Convention, to enable it to assess the extent to which the provisions of the Convention are applied in law and practice, and to transmit copies of any relevant bidding documents adopted in accordance with the public procurement legislation in force. The Committee notes the Government’s indication in its supplementary report that the new Public Procurement Act (No. 24/2019), which came into force on 1 April 2019, does not contain any explicit provisions requiring the insertion of labour clauses in public contracts, as the Act is mainly procedural and does not regulate the content of public procurement contracts. The Government indicates that section 3 of Act No. 24/2019 confirms that the Convention is directly applied as part of the legal order in North Macedonia. Moreover, section 3(2) requires the contracting authority to comply with the environmental, social policy and labour protection obligations that arise during the implementation of public contracts from national legal regulations, collective agreements and ratified Conventions. It adds that section 110 (4) of the Act addresses the issue of labour protection, requiring a bid to be rejected by the contracting authority if it determines that the amount of the bid is unusually low because it does not fulfil the relevant obligations, including obligations under ratified Conventions. The Government further indicates that it is for the provisions of Article 2 of the Convention to be incorporated into the tender documentation models and public procurement contract models drawn up by the Public Procurement Bureau. Indeed, section 45 of the Act provides that one of the competencies of the Bureau is to prepare tender documentation and forms for the public procurement procedures regulated under the Act, whereas section 81 of the Act sets out the mandatory provisions that must be contained in the public procurement contract. The Bureau may therefore incorporate the obligations from the Convention in the models of tender documentation as mandatory elements of such contracts. The Committee notes that the Government provides no specific information regarding the manner in which effect is given to the provisions of the Convention. The Committee therefore requests the Government to provide examples of public procurement models and forms drawn up by the Public Procurement Bureau that incorporate the specific provisions of Article 2 of the Convention. The Government is also requested to provide a copy of the Public Procurement Act, as amended.

Articles 1 and 2. Insertion of labour clauses. Information to tenderers.  The Committee recalls that the Convention requires the insertion of labour clauses of the type prescribed by Article 2(1) in the public contracts to which it applies, namely where: one of the parties is a public authority; the execution of the contract involves both the expenditure of funds by the public authority and the employment of workers by the other party; and the contract is one for public works, materials, supplies or equipment, or the provision of services (Article 1(a)–(d)). In paragraph 45 of its 2008 General Survey on labour clauses in public contracts, the Committee pointed out that “the mere fact of the national legislation being applicable to all workers does not release the State which has ratified the Convention from the obligation to take the necessary steps to ensure that public contracts contain the labour clauses specified in Article 2 of the Convention”. In addition, ratifying States are under the obligation to take measures to ensure that the Convention applies not only to work undertaken by contractors, but also to work undertaken under the public contract by subcontractors or assignees (Article 1(3)). The labour clauses required by the Convention – which should be established by the competent authority in consultation with the social partners – must ensure that the workers concerned receive wages (including allowances), hours of work and other conditions of labour that are not less favourable than those established for work of the same character in the trade or industry concerned [and which apply] in the district where the work is being performed (Article 2(1) of the Convention). As the Committee observed in paragraph 45 of its 2008 General Survey, “the essential purpose of the Convention is to ensure that workers employed under public contracts enjoy the same conditions as workers whose conditions of employment are fixed not only by national legislation, but also by collective agreements or arbitration awards, given that in many cases the provisions of the national legislation governing wages, hours of work and other conditions of employment merely constitute minimum standards, whereas wages and conditions of work may be more favourable under a collective agreement or arbitration award”. Where more favourable conditions have been established, these should generally be applied.  The Committee once again requests the Government to indicate the manner and extent to which effect is given to Articles 1 and 2 of the Convention. It also reiterates its request that the Government transmit copies of any relevant bidding documents that may have been adopted in accordance with the 2019 Public Procurement Act. The Committee recalls that the Government may wish to avail itself of the technical assistance of the International Labour Office with a view to bringing its legislation and practice into full conformity with the provisions of the Convention.

Articles 2(4) and 4(a)(i)–(iii) of the Convention. Notice requirements.  The Convention requires that ratifying States take measures to ensure that persons (including legal persons) tendering for contracts are aware of the terms of the labour clauses (Article 4 of the Convention). The purpose of this provision is to ensure that the requirements for labour clauses are respected, as well as to ensure that the resulting costs are properly understood by the tenderers and are factored into the bid. Therefore, once the labour clauses have been properly inserted into the public contract, the contracting authority must ensure that tenderers are made aware of the contents of the clauses, for example by issuing a letter of invitation, publication in official platforms or forums, or through other means (2008 General Survey at paragraphs 44 and 125–126). In addition, Article 4(a) of the Convention requires that ratifying States take measures to require the posting of notices in conspicuous places at the establishments and workplaces concerned, to ensure that workers employed (by either contractors, subcontractors or assignees) are made aware of their conditions of work under the labour clauses.  The Committee requests the Government to provide precise information on the manner in which tenderers, as well as the workers employed under the public contracts to which the Convention applies, are made aware of the terms of the labour clauses. It further requests that the Government indicate how it is ensured that information concerning the applicable laws and regulations is brought to the notice of all persons concerned and the manner in which the persons responsible for compliance with this obligation are defined.

Article 4(b) of the Convention. Adequate system of inspection. Maintenance of records.  The Convention requires the ratifying State to provide for an adequate system of inspection to ensure effective enforcement, including requiring that adequate records be maintained of time worked by and wages paid to the workers concerned. The Committee notes the Government’s statement that “the inspection is supervised and enforced by the State Labour Inspectorate, through a network of labour inspectors”.  The Committee requests the Government to provide precise, detailed information on the organization and activities of the inspection monitoring mechanisms and services with regard to public procurement. In particular, the Committee would appreciate receiving extracts of reports by the inspection services and information on the number of public contracts issued and any other particulars relevant to the practical application of this provision of the Convention.

Article 5 of the Convention. Effective sanctions.  The Convention calls for the application of effective sanctions, such as the withholding of contracts for failure to observe and apply the provisions of labour clauses in public contracts. It also requires appropriate measures to be taken, such as the withholding of payments under the contract with a view to enabling the workers concerned to recover unpaid wages to which they are entitled.  The Committee requests the Government to provide detailed and precise information on the activities of the inspection authorities with regard to public procurement, including the number and type of contraventions detected and the sanctions imposed.

Direct Request (CEACR) - adopted 2019, published 109th ILC session (2021)

The Committee notes that the Government’s report has not been received. It hopes that the next report will contain full information on the matters raised in its previous comments.

Repetition

Application of the Convention. Part V of the report form. In its previous comments, the Committee requested the Government to provide a detailed report with full particulars on each of the provisions of the Convention, to enable it to assess the extent to which the provisions of the Convention are applied in law and practice, and to transmit copies of any relevant bidding documents adopted in accordance with existing public procurement legislation. The Committee notes the Government’s indication that the Public Procurement Act (No. 136/07), as amended, does not contain any provisions requiring the insertion of labour clauses in public contracts (article 2(1)). The Government refers instead to its general labour legislation, indicating that “the material regulations in the field of labour also apply to public procurement contracts” and that … the protection of workers is “a mandatory legal matter, regulated by the material regulations of labour area”. In addition, the Committee notes that the Government provides no precise information regarding the manner in which the provisions of the Convention are given effect. The Committee therefore wishes to once again draw the Government’s attention to the core requirements of the Convention, as set out below.

Articles 1 and 2. Insertion of labour clauses. Information to tenderers. The Committee recalls that the Convention requires the insertion of labour clauses of the type prescribed by Article 2(1) in the public contracts to which it applies, namely where: one of the parties is a public authority; the execution of the contract involves both the expenditure of funds by the public authority and the employment of workers by the other party; and the contract is one for public works, materials, supplies or equipment, or the provision of services (Article 1(a)–(d)). In its 2008 General Survey on labour clauses in public contracts, the Committee pointed out that “the mere fact of the national legislation being applicable to all workers does not release the State which has ratified the Convention from the obligation to take the necessary steps to ensure that public contracts contain the labour clauses specified in Article 2 of the Convention” (General Survey, paragraph 45). In addition, ratifying States are under the obligation to take measures to ensure that the Convention applies not only to work undertaken by contractors, but also to work undertaken under the public contract by subcontractors or assignees (Article 1(3)). The labour clauses required by the Convention – which should be established by the competent authority in consultation with the social partners – must ensure that the workers concerned receive wages (including allowances), hours of work and other conditions of labour that are not less favourable than those established for work of the same character in the trade or industry concerned [and which apply] in the district where the work is being performed (Article 2(1) of the Convention). As the Committee observed in paragraph 45 of its 2008 General Survey, the essential purpose of the Convention is to ensure that workers employed under public contracts enjoy the same conditions as workers whose conditions of employment are fixed not only by national legislation, but also by collective agreements or arbitration awards, given that in many cases the provisions of the national legislation governing wages, hours of work and other conditions of employment merely constitute minimum standards, whereas wages and conditions of work may be more favourable under a collective agreement or arbitration award (Article 1(a)–(c) of the Convention). Where more favourable conditions have been established, these should generally be applied. The Committee requests the Government to indicate the manner and extent to which effect is given to Articles 1 and 2 of the Convention. It also reiterates its request that the Government transmit copies of any relevant bidding documents that may have been adopted in accordance with existing public procurement legislation. The Committee recalls that the Government may wish to avail itself of the technical assistance of the International Labour Office with a view to bringing its legislation and practice into full conformity with the provisions of the Convention.

Articles 2(4) and 4(a)(i)–(iii) of the Convention. Notice requirements. The Convention requires that ratifying States take measures to ensure that persons (including legal persons) tendering for contracts are aware of the terms of the labour clauses (Article 4 of the Convention). The purpose of this provision is to ensure that the requirements for labour clauses are respected, as well as to ensure that the resulting costs are properly understood by the tenderers and are factored into the bid. Therefore, once the labour clauses have been properly inserted into the public contract, the contracting authority must ensure that tenderers are made aware of the contents of the clauses, for example by issuing a letter of invitation, publication in official platforms or forums, or through other means (2008 General Survey at paragraphs 44 and 125–126). In addition, Article 4(a) of the Convention requires that ratifying States take measures to require the posting of notices in conspicuous places at the establishments and workplaces concerned, to ensure that workers employed (by either contractors, subcontractors or assignees) are made aware of their conditions of work under the labour clauses. The Committee requests the Government to provide precise information on the manner in which tenderers, as well as the workers employed under the public contracts to which the Convention applies, are made aware of the terms of the labour clauses. It further requests that the Government indicate how it is ensured that information concerning the applicable laws and regulations is brought to the notice of all persons concerned and the manner in which the persons responsible for compliance with this obligation are defined.

Article 4(b) of the Convention. Adequate system of inspection. Maintenance of records. The Convention requires the ratifying State to provide for an adequate system of inspection to ensure effective enforcement, including requiring that adequate records be maintained of time worked by and wages paid to the workers concerned. The Committee notes the Government’s statement that “the inspection is supervised and enforced by the State Labour Inspectorate, through a network of labour inspectors”. The Committee requests the Government to provide precise, detailed information on the organization and activities of the inspection monitoring mechanisms and services with regard to public procurement. In particular, the Committee would appreciate receiving extracts of reports by the inspection services and information on the number of public contracts issued and any other particulars relevant to the practical application of this provision of the Convention.

Article 5 of the Convention. Effective sanctions. The Convention calls for the application of effective sanctions, such as the withholding of contracts for failure to observe and apply the provisions of labour clauses in public contracts. It also requires appropriate measures to be taken, such as the withholding of payments under the contract with a view to enabling the workers concerned to recover unpaid wages to which they are entitled. The Committee requests the Government to provide detailed and precise information on the activities of the inspection authorities with regard to public procurement, including the number and type of contraventions detected and the sanctions imposed.

Direct Request (CEACR) - adopted 2018, published 108th ILC session (2019)

Application of the Convention. Part V of the report form. In its previous comments, the Committee requested the Government to provide a detailed report with full particulars on each of the provisions of the Convention, to enable it to assess the extent to which the provisions of the Convention are applied in law and practice, and to transmit copies of any relevant bidding documents adopted in accordance with existing public procurement legislation. The Committee notes the Government’s indication that the Public Procurement Act (No. 136/07), as amended, does not contain any provisions requiring the insertion of labour clauses in public contracts (article 2(1). The Government refers instead to its general labour legislation, indicating that “the material regulations in the field of labour also apply to public procurement contracts” and that … the protection of workers is “a mandatory legal matter, regulated by the material regulations of labour area”. In addition, the Committee notes that the Government provides no precise information regarding the manner in which the provisions of the Convention are given effect. The Committee therefore wishes to once again draw the Government’s attention to the core requirements of the Convention, as set out below.

Articles 1 and 2. Insertion of labour clauses. Information to tenderers. The Committee recalls that the Convention requires the insertion of labour clauses of the type prescribed by Article 2(1) in the public contracts to which it applies, namely where: one of the parties is a public authority; the execution of the contract involves both the expenditure of funds by the public authority and the employment of workers by the other party; and the contract is one for public works, materials, supplies or equipment, or the provision of services (Article 1(a)–(d)). In its 2008 General Survey on labour clauses in public contracts, the Committee pointed out that “the mere fact of the national legislation being applicable to all workers does not release the State which has ratified the Convention from the obligation to take the necessary steps to ensure that public contracts contain the labour clauses specified in Article 2 of the Convention” (General Survey, paragraph 45). In addition, ratifying States are under the obligation to take measures to ensure that the Convention applies not only to work undertaken by contractors, but also to work undertaken under the public contract by subcontractors or assignees (Article 1(3)). The labour clauses required by the Convention – which should be established by the competent authority in consultation with the social partners – must ensure that the workers concerned receive wages (including allowances), hours of work and other conditions of labour that are not less favourable than those established for work of the same character in the trade or industry concerned [and which apply] in the district where the work is being performed (Article 2(1) of the Convention). As the Committee observed in paragraph 45 of its 2008 General Survey, the essential purpose of the Convention is to ensure that workers employed under public contracts enjoy the same conditions as workers whose conditions of employment are fixed not only by national legislation, but also by collective agreements or arbitration awards, given that in many cases the provisions of the national legislation governing wages, hours of work and other conditions of employment merely constitute minimum standards, whereas wages and conditions of work may be more favourable under a collective agreement or arbitration award (Article 1(a)–(c) of the Convention). Where more favourable conditions have been established, these should generally be applied. The Committee requests the Government to indicate the manner and extent to which effect is given to Articles 1 and 2 of the Convention. It also reiterates its request that the Government transmit copies of any relevant bidding documents that may have been adopted in accordance with existing public procurement legislation. The Committee recalls that the Government may wish to avail itself of the technical assistance of the International Labour Office with a view to bringing its legislation and practice into full conformity with the provisions of the Convention.

Articles 2(4) and 4(a)(i)–(iii) of the Convention. Notice requirements. The Convention requires that ratifying States take measures to ensure that persons (including legal persons) tendering for contracts are aware of the terms of the labour clauses (Article 4 of the Convention). The purpose of this provision is to ensure that the requirements for labour clauses are respected, as well as to ensure that the resulting costs are properly understood by the tenderers and are factored into the bid. Therefore, once the labour clauses have been properly inserted into the public contract, the contracting authority must ensure that tenderers are made aware of the contents of the clauses, for example by issuing a letter of invitation, publication in official platforms or forums, or through other means (2008 General Survey at paragraphs 44 and 125–126). In addition, Article 4(a) of the Convention requires that ratifying States take measures to require the posting of notices in conspicuous places at the establishments and workplaces concerned, to ensure that workers employed (by either contractors, subcontractors or assignees) are made aware of their conditions of work under the labour clauses. The Committee requests the Government to provide precise information on the manner in which tenderers, as well as the workers employed under the public contracts to which the Convention applies, are made aware of the terms of the labour clauses. It further requests that the Government indicate how it is ensured that information concerning the applicable laws and regulations is brought to the notice of all persons concerned and the manner in which the persons responsible for compliance with this obligation are defined.

Article 4(b) of the Convention. Adequate system of inspection. Maintenance of records. The Convention requires the ratifying State to provide for an adequate system of inspection to ensure effective enforcement, including requiring that adequate records be maintained of time worked by and wages paid to the workers concerned. The Committee notes the Government’s statement that “the inspection is supervised and enforced by the State Labour Inspectorate, through a network of labour inspectors”. The Committee requests the Government to provide precise, detailed information on the organization and activities of the inspection monitoring mechanisms and services with regard to public procurement. In particular, the Committee would appreciate receiving extracts of reports by the inspection services and information on the number of public contracts issued and any other particulars relevant to the practical application of this provision of the Convention.

Article 5 of the Convention. Effective sanctions. The Convention calls for the application of effective sanctions, such as the withholding of contracts for failure to observe and apply the provisions of labour clauses in public contracts. It also requires appropriate measures to be taken, such as the withholding of payments under the contract with a view to enabling the workers concerned to recover unpaid wages to which they are entitled. The Committee requests the Government to provide detailed and precise information on the activities of the inspection authorities with regard to public procurement, including the number and type of contraventions detected and the sanctions imposed.

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

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

The Committee notes that the Government’s report has not been received. It hopes that the next report will contain full information on the matters raised in its previous comments initially made in 2012.

Repetition

Articles 1 and 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes the Government’s reference to the Public Procurement Act (Official Gazette No. 136/07), as amended, and the indication that the Public Procurement Act is fully aligned with relevant European Union legislation. The Committee notes, however, that the Government’s report is silent on the specific provisions implementing the basic requirements of this Convention. The Committee recalls that when submitting the first report following the entry into force of a ratified Convention, a government is expected to collect and communicate to the ILO full particulars on each of the provisions of the Convention and on each of the questions contained in the report form to enable the Committee to assess the extent to which the provisions of the Convention are given effect both in law and in practice.

Under the circumstances, the Committee considers it useful to draw the Government’s attention to the core requirements of the Convention which may be summarized as follows: (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 workplaces 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 to refer to its General Survey of 2008 concerning labour clauses in public contracts (paragraphs 2 and 40), 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 minimum conditions for the contract standards that are already established within the locality, and that labour costs are thus removed from competition between bidders.

The Committee notes that under section 2 of the Public Procurement Act, this legislation seeks to promote fair competition in public procurement operations, equal treatment and non-discrimination among economic operators, transparency and integrity in awarding public contracts, and rational and efficient utilization of funds in contract award procedures. 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 accordingly requests the Government to submit a detailed report on the state of law and practice and to transmit copies of any relevant bidding documents, which may have been adopted in accordance with existing public procurement legislation.

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

Articles 1 and 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes the Government’s reference to the Public Procurement Act (Official Gazette No. 136/07), as amended, and the indication that the Public Procurement Act is fully aligned with relevant European Union legislation. The Committee notes, however, that the Government’s report is silent on the specific provisions implementing the basic requirements of this Convention. The Committee recalls that when submitting the first report following the entry into force of a ratified Convention, a government is expected to collect and communicate to the ILO full particulars on each of the provisions of the Convention and on each of the questions contained in the report form to enable the Committee to assess the extent to which the provisions of the Convention are given effect both in law and in practice.

Under the circumstances, the Committee considers it useful to draw the Government’s attention to the core requirements of the Convention which may be summarized as follows: (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 workplaces 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 to refer to its General Survey of 2008 concerning labour clauses in public contracts (paragraphs 2 and 40), 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 minimum conditions for the contract standards that are already established within the locality, and that labour costs are thus removed from competition between bidders.

The Committee notes that under section 2 of the Public Procurement Act, this legislation seeks to promote fair competition in public procurement operations, equal treatment and non-discrimination among economic operators, transparency and integrity in awarding public contracts, and rational and efficient utilization of funds in contract award procedures. 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 accordingly requests the Government to submit a detailed report on the state of law and practice and to transmit copies of any relevant bidding documents, which may have been adopted in accordance with existing public procurement legislation.

Finally, the Committee attaches herewith a copy of a Practical Guide on Convention No. 94 which was prepared by the Office in September 2008 based on the conclusions of the aforementioned General Survey in order to help member States better understand the requirements of the Convention, and in so doing, promote its implementation.