Labour Clauses (Public Contracts) Convention, 1949 (No. 94) - Netherlands (Ratification: 1952)

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

The Committee takes note of 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 proceeded with the examination of 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.

The Committee notes the observations of the Netherlands Trade Union Confederation (FNV), the National Federation of Christian Trade Unions (CNV) and the Trade Union Federation for Professionals (VCP), received on 29 October 2019. The Committee requests the Government to provide its comments in this respect.

Articles 1 and 2 of the Convention. Insertion of labour clauses in public contracts. For a number of years, the Committee has been requesting the Government to provide information on progress made in ensuring effective application of the core requirements of the Convention. The Committee also requested the Government to provide updated information on the Code of Responsible Market Conduct (the Code) and its impact, as well as on the number and type of sanctions imposed by the sectoral committees authorised to examine complaints alleging inefficient or inadequate application of the Code. The Government indicates that the Code provides a set of principles that call for adequate working conditions, correct payment of wages and other conditions of work and employment. It adds that, while the Code is not legally binding, it makes a moral appeal to commissioning parties, contractors, hirers, trade unions, and intermediaries to describe, accept, and carry out assignments in a socially responsible manner. The Committee notes the Government’s indication that the Code was signed by almost 1,500 parties in 2019. It further notes the information provided by the Government indicating that some 50 complaints are received annually and that such complaints can lead to sanctions. In their observations, the workers’ organizations express their concern at the position of the Government that no further adjustments are necessary regarding the implementation of the Convention. They point out that the Netherlands has never specifically implemented the Convention, but that the Public Procurement Act of 2012, as amended in 2016, provides a general legal framework for public procurement that implements the European public procurement directives but does not give effect to Article 2 of the Convention. The Committee further notes the observations made by the Dutch trade unions with regard to the provisions of section 2.115 of the Public Procurement Act, in which they express the view that this provision is purely permissive and does not ensure the application of Article of the Convention. The workers’ organizations also refer in their observations to the Wet Aanpak Schijnconstructies (WAS) of July 2015, which introduces a civil-law “chain of liability” for payment of wages owed to workers engaged under public contracts. The Committee notes that neither the Dutch Public Procurement Act 2016 (as amended), nor the WAS contain any provisions giving effect to the Convention. In relation to the Code, the FNV, CNV and VNP indicate that the application of the Code is limited to its signatories, pointing out that the Code itself is a voluntary guide to prompt more responsible market behaviour, but which does not contain any legally binding provisions. The Dutch trade unions express their disagreement with the Dutch Government’s reference to the Code as demonstrating the material implementation of Convention No. 94 in the Netherlands, observing that the Government’s own institution, the Netherlands Authority for Consumers and Markets (ACM) takes the position that the inclusion of wage standards in the Code would infringe on (EU) competition law. The workers’ organizations consider that, notwithstanding the importance of the Code, it is irrelevant to the issue of material implementation of the Convention, as it contains no provisions requiring implementation of Article 2. Therefore, the workers’ organizations consider that, notwithstanding its repeated statements to the contrary, the Government of the Netherlands has no intention of complying fully with the requirements of Convention No. 94. While noting the importance of the Code of Responsible Market Conduct as a voluntary code of conduct, the Committee nevertheless wishes to draw the attention of the Government to its 2008 General Survey on labour clauses in public contracts (paragraph 128), in which the Committee stressed that the insertion of labour clauses in the specifications or general conditions of tender documents, even though it is a means of making persons tendering for contracts aware of the terms of such clauses in line with Article 2(4), does not suffice to give effect to the basic requirement of the Convention set out in Article 2(1), which requires that the labour clause be included as an integral part of the contract actually signed by the public authority and the selected contractor. Noting once again that it has been commenting for a number of years on the Government’s failure to give effect to the Convention, the Committee trusts that the Government will take all necessary measures without further delay to bring its national legislation into full conformity with the core requirements of the Convention. In this regard, it recalls that the inclusion of appropriate labour clauses in all public contracts covered by the Convention does not necessarily require the enactment of new legislation, but can also be realised by administrative instructions or circular.

Part V of the report form. The Committee requests the Government to communicate concrete, up to date information on the practical application of the Convention in its next report. In particular, the Committee requests the Government to provide examples of public contracts issued during the reporting period containing labour clauses within the meaning of the Convention, as well as extracts of reports by the inspection services showing the number and nature of any violations and the sanctions imposed, information on the number of public contracts awarded during the reporting period, the approximate number of workers involved in their execution, and any other particulars bearing on the practical application of the Convention.

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

The Committee notes the observations of the Netherlands Trade Union Confederation (FNV), the National Federation of Christian Trade Union and the Trade Union Federation for Professionals (VCP), received on 31 August 2017. The Committee requests the Government to provide its comments in this respect.

Articles 1 and 2 of the Convention. Insertion of labour clauses in public contracts. In its previous comments, the Committee requested the Government to provide additional explanations with regard to the nature, scope and content of the Code for responsible market behaviour in the cleaning industry and its possible impact on the practical application of the Convention. The Government indicates that the pilot version of the Code from 2011 was applied only in the cleaning sector, but that the Code is now more widely applied beyond the cleaning industry, and is now also used for movers, as well as in the security and contract catering sectors. The Government also indicates that, by signing the Code, the parties (commissioning parties, contractors, trade unions and intermediaries) undertake to apply a set of principles regarding working conditions, including the correct payment of wages. The Government adds that the Code assists the parties to describe, accept and carry out assignments in a socially responsible manner, with respect for the quality of the services being provided. To monitor the implementation of the Code, each sector has a specific committee, composed of the social partners and contractors for each sector, which is authorized to examine complaints alleging inefficient or inadequate application of the Code. After hearing both parties, the committee decides whether a sanction should be imposed for non-compliance. In this respect, the Committee notes the observations of the workers’ organizations, in which they point out that the Code is a private initiative which does not contain any legally binding provisions implementing the requirements of the Convention. The Committee notes that, in accordance with Article 1(1)(c), the Convention applies not merely to a specific sector, but to all public contracts, whether for works (construction, alteration, repair or demolition of public works); goods (the manufacture, assembly, handling or shipment of materials, supplies or equipment); or services (the performance or supply of services). The Government reports that, to improve social conditions for workers, it has put in place a so-called “chain of liability for wages”, which makes all legal entities in the chain (the main clients, contractors, subcontractors and employers) jointly responsible for payment of wages of the workers hired under the contract. If the workers do not get paid or are underpaid, they can hold each link in the chain liable for payment of their wages. The workers’ organizations note in their observations that the “chain of liability” procedure is too unwieldy because each link has to be addressed separately and each claim must be fully examined before the employee can move up to the next link in the chain. The workers’ organizations underline that this requirement makes the process too long, especially for foreign workers that often leave the country before even the first link in the chain is fully addressed. In their observations, the workers’ organizations once again express concern regarding the non-application of the Convention, indicating that the Public Procurement Act, which entered into force on 1 April 2013 and provides a general legal framework for public procurement regulations, implements the public procurement European Directives without ensuring the application of the Convention. In this regard, they note that section 2.115, paragraph 1, of the Public Procurement Act essentially reproduces section 26 of the Order of July 2005 on procedures for the award of public works, supply and service contracts implementing the EU Public Procurement Directive of 2004 and does not ensure the application of Article 2 of the Convention. The workers’ organizations point out that section 2.115, paragraph 1 of the Act is drafted as a purely permissive provision, as it authorizes the contracting authority to require the contractor to observe certain social, environmental and/or innovation criteria, but does not require the contracting authority to require the contractor to adhere to such criteria. As the Committee has noted in previous comments, the core requirement of the Convention concerns the inclusion of labour clauses of the type provided for in Article 2. The Committee therefore requests the Government to provide information on progress made in ensuring effective application of the core requirements of the Convention. The Committee also requests the Government to provide updated information on the Code and its impact, and on the number and type of sanctions imposed by the sectoral committees in cases of non-compliance.

Direct Request (CEACR) - adopted 2013, published 103rd ILC session (2014)

Article 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes the Government’s statement that there is no specific reason for further adjustments as regards the implementation of the Convention, as the Government is of the view that it complies in a material way to the two core requirements of the Convention, namely guaranteeing to the workers concerned working conditions at least equal to those in legislation and in universally binding collective agreements, and ensuring that non-compliance has consequences for the provision of further services. The Committee also notes the Government’s indications that a “Code for responsible market behaviour in the cleaning industry” has recently been developed and tested by a few ministries for the procurement of cleaning services and its use should be extended to public procurement of postal, security and catering services. The Government further adds that an administrative committee is currently examining legal options for using the Code in public procurement in general. The Committee requests the Government to provide additional explanations on the nature, scope and content of the Code and its possible impact on the practical application of the Convention. The Committee also requests the Government to transmit a copy of the Code currently applicable to the cleaning sector and to keep the Office informed of the outcome of the work of the administrative committee that examines ways of promoting socially responsible public procurement operations based on non-binding codes of conduct.

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

Article 2 of the Convention. Insertion of labour clauses in public contracts. For the last five years, the Committee has been drawing the Government’s attention to the fact that public procurement legislation does not contain any provisions giving effect to the specific requirements of the Convention. Over the same period, the Committee has been in receipt of a number of observations made by the Netherlands Trade Union Confederation (FNV) raising the same point. The Committee recalls that in its report submitted in 2008 the Government had admitted that the Convention was not fully implemented and had indicated that it was examining means for improving compliance with the Convention. In its latest report, however, the Government states that the Convention is fully complied with through existing measures, namely the system of universally binding collective agreements and the minimum requirements of the labour legislation which would apply if no universally binding collective agreements apply. The Government also states that its system of universally binding collective agreements is fully consonant with recent jurisprudence of the European Court of Justice, in particular the Rüffert case (C-346/06), and concludes that there is no specific reason for further adjustments of the implementation of Convention No. 94. The Committee notes that in a communication dated 31 August 2012, the Confederation of Netherlands Industry and Employers (VNO-NCW) has expressed its full support for the Government’s position in this matter.

In addition, the Committee notes the new observations of the FNV dated 30 August 2012 according to which the Government, although it has ratified Convention No. 94 a long time ago, has no intention whatsoever to fully comply with its requirements. The FNV points out that draft section 2.8 of the Public Procurement Bill, which is now before the Senate, essentially reproduces the purely permissive provision of section 26 of the Order of July 2005 implementing the EU Public Procurement Directive of 2004 and therefore does not ensure the observance of Article 2 of the Convention under which public contracts to which the Convention applies must include in all circumstances clauses ensuring to the workers concerned, wages, hours of work and other working conditions which are not less favourable than those established for work of the same nature in the same area by collective agreement, arbitration award or national laws or regulations. The FNV also reiterates earlier comments on the system of declaring collective agreements generally applicable under the Collective Labour Agreements Act and on the implications of the Rüffert case basically denouncing the Government’s contradictory statements and attitude on this subject.

While noting the latest exchange of views, the Committee feels obliged to recall that the manner in which the Convention is purportedly implemented through Order of 16 July 2005 on procedures for the award of public works, supply and service contracts, has been thoroughly examined in the comment that was addressed to the Government in 2007. As the Committee explained in that comment, section 26 of the Order of 16 July 2005 provides that the contracting authority may attach particular social or environmental conditions to public contracts, whereas the Convention requires the inclusion of labour clauses of the type provided for in Article 2 in all circumstances. The Committee further explained that, apart from this core requirement, the Convention also calls for other measures, including appropriate publicity to be given to the terms of labour clauses, the posting of notices at the workplace and adequate sanctions for failure to observe the provisions of labour clauses, as well as effective measures to enable workers who have been underpaid to recover any sums due to them. The Committee is, therefore, of the view that, as it currently stands, the national public procurement legislation is not consistent with the specific requirements of the Convention and accordingly the Government should consider appropriate steps in order to bring national law and practice in line with its provisions. The Committee firmly hopes that in the ongoing process of elaboration of the Public Procurement Bill, the Government will seize the opportunity to introduce the necessary provisions to ensure full compliance with the Convention. The Committee requests the Government to keep the Office informed of any progress made in this regard and to transmit a copy of the new public procurement legislation once it has been adopted.

Observation (CEACR) - adopted 2010, published 100th ILC session (2011)

Article 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes the observations made by the Netherlands Trade Union Confederation (FNV) concerning the application of the Convention. The FNV reiterates its view that the national legislation has never specifically implemented the Convention but rather the EU Public Procurement Directive of 2004 which is purely permissive. The FNV adds that the Government has initiated a process of privatization and liberalization of public services and public procurement has become an instrument in the Government’s privatization policy. The FNV also expresses its concern over a new legislative proposal for a Public Procurement Act (TK 2009-2010, 32 440), which was transmitted to the Parliament on 25 June 2010. The Committee invites the Government to transmit any comments it may wish to make in response to the observations of the FNV. It would also appreciate receiving a copy of the Public Procurement Bill referred to above.

Direct Request (CEACR) - adopted 2008, published 98th ILC session (2009)

Article 1 of the Convention. Scope of application. The Committee notes the information provided by the Government in its report about the new policy on sustainable procurement, in particular the policy decision that by 2010 all procurement operations of central government and most procurement operations of local and provincial governments should be environmentally and socially sustainable. Under this initiative, the Government intends to request suppliers to monitor the whole production chain and ensure that the core labour standards contained in the eight ILO fundamental Conventions are fully adhered to. The Government adds that in special cases, such as the Fair Wear Foundation, where multi-stakeholder initiatives can verify compliance, the sustainable procurement policy may not be limited to core labour standards but may also involve other important ILO standards on wages, working hours and occupational safety and health. Moreover, the Government seeks some clarification as to whether the Convention, which was drafted long before the times of globalization, can be deemed to create obligations with respect to labour conditions prevailing outside the borders of the contracting authority.

In this respect, the Committee refers to paragraphs 269–280 of its 2008 General Survey on labour clauses in public contracts where it addressed the question of cross-border procurement and global supply chains in connection with the scope of the Convention. The Committee recalled that while the Convention is silent on this point, the dominant focus at the time of adoption was clearly work carried out within the borders of the State of the contracting entity. This does not mean, however, that all contracts with a transnational dimension are excluded from the coverage of the Convention; in the case of contracts involving the use of foreign workers brought for the purpose of the contract, labour clauses would apply. On the contrary, work done outside the contracting State is, in principle, not covered by the provisions of the Convention. The Committee also noted that the issue of labour standards applied in transnational supply chains finally comes down to the understanding given by national authorities to the idea of subcontractors and that, should a member State desire to do so, contractual labour clause obligations could be applied across borders. As regards the relationship between Convention No. 94 and the 1998 ILO Declaration on Fundamental Principles and Rights at Work, the Committee suggested that the two sets of principles are complementary and stressed the importance of Convention No. 94 as a possible mechanism for promoting core labour standards. As indicated in paragraph 314 of the General Survey, at a time when the ILO core labour standards and the 1998 ILO Declaration are gaining prominence in the field of international human rights law and international trade law, Convention No. 94 offers a unique opportunity and a normative platform with a view to building a comprehensive standard for the promotion of decent labour conditions in public contracts. The Committee would appreciate if the Government would continue to provide, in future reports, up to date information concerning the implementation of the new policy on sustainable procurement and the results obtained.

For all useful purposes, the Committee attaches herewith a copy of a Practical Guide, prepared by the Office principally on the basis of the General Survey of 2008 on Convention No. 94, to help better understand the requirements of the Convention and ultimately improve its application in law.

Observation (CEACR) - adopted 2008, published 98th ILC session (2009)

Article 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes the explanations provided by the Government in its report that by virtue of the Collective Labour Agreements (Declaration of Generally Binding and Non-binding Status) Act of 1936 (AVV Act), the Government can decide that a collective agreement is of general applicability for a whole economic sector, which means that employers who are not members of the employers’ organization that negotiated the collective agreement are also bound by it, and that by virtue of the Employment Conditions Cross-border Employment Act of 1999 (WAGA Act), foreign workers working in the Netherlands must be paid according to the applicable collective agreement. The Government states that the AVV and WAGA Acts minimize the risk of competition among bidders for public contracts and provide adequate protection to workers. It recognizes, however, that the Convention is not fully implemented and that it is currently examining means for improving implementation and compliance with the Convention. The Committee welcomes the Government’s statement that it intends to take action to give full effect to the requirements of the Convention. It asks the Government to keep the Office informed of any progress made in this regard.

The Committee notes the observations made by the Netherlands Trade Union Confederation (FNV) with regard to the Government’s position on the application of the Convention. The FNV disagrees with the view that the existing legislation offers the type of protection envisaged by the Convention and calls upon the Government to accelerate the process in order to ensure compliance. The FNV indicates, first, that section 26 of the Order of 16 July 2005, authorizing the contracting authority to require the contractor to observe certain conditions, is purely permissive, and therefore not consistent with the clear requirement of Article 2 of the Convention, which provides that labour clauses must be included in public contracts. Secondly, according to the AVV Act, only collective agreements declared universally binding by the Minister of Social Affairs and Employment apply to all workers engaged in the execution of public contracts, which implies that unless all sectoral collective agreements are declared universally binding, the requirements of the Convention cannot be fully met. In this regard, the FNV refers to the collective agreement for the construction sector which, in the period from 2000 to date, has been declared universally binding for only one and a half years. As regards the coverage of collective agreements, the FNV expresses particular concern about the situation of posted workers whose status is further weakened following the judgment of the Court of Justice of the European Communities in the Rüffert case (upholding that the legislation of a German Länder which required bidders to commit themselves to pay collectively-agreed wages to all workers, including posted workers, was not compatible with EU law). The FNV emphasizes that, contrary to Germany which has not ratified Convention No. 94, the Netherlands is bound by the Convention and therefore the Court’s narrow interpretation of the Posting of Workers Directive cannot affect its obligations arising out of the Convention. Thirdly, the FNV raises the question of the applicability of the Convention to contracts awarded by local authorities that the Government has not yet addressed since it has never fully implemented the Convention. In the FNV’s opinion, the Convention applies to local government in the same manner and to the same extent as to central government, as they both exercise public authority. The Committee requests the Government to transmit any comments it may wish to make in reply to the observations of the FNV.

The Committee is also addressing a direct request to the Government concerning certain other points.

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

The Committee notes the adoption of the Order of 16 July 2005 laying down rules concerning procedures for the award of public works, supply and service contracts. It notes that section 26 of the Order reproduces the substance of Article 26 of EU Directive No. 2004/18/EC of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts. Under this provision, contracting authorities may lay down special conditions relating to the performance of a public contract, provided that these are compatible with Community law and are indicated in the contract notice or in the specifications. These conditions may relate to social and environmental considerations. The Committee also notes that the Government refers in its report to paragraph 34 of the Preamble of the abovementioned Directive, which states that “the laws, regulations and collective agreements, at both national and Community level, which are in force in the areas of employment conditions and safety at work apply during performance of a public contract, providing that such rules, and their application, comply with Community law”. The Committee notes the Government’s indications that it is authorized under Community law to impose certain stipulations regarding the conditions of employment of workers in the context of the performance of public contracts, the contractor being obliged, moreover, to comply with the provisions of national law and of the relevant collective agreements.

The Committee draws the Government’s attention to the fact that section 26 of the Order of 16 July 2005 is purely permissive, inasmuch as it authorizes the contracting authority to require the contractor to observe certain conditions, particularly in the social field. Such a provision does not ensure the observance of Article 2 of the Convention, under which public contracts to which the Convention applies must include clauses ensuring to the workers concerned wages, hours of work and other conditions of labour which are 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.

With regard to paragraph 34 of the Preamble to Directive No. 2004/18/EC, the Committee recalls that the mere fact that the social legislation and the relevant collective agreements are applicable to workers engaged for the performance for public contracts in no way releases the Government from the obligation to provide for the inclusion of labour clauses in public contracts as required by the Convention. Even if workers employed for the execution of public contracts are covered by collective agreements, the whole point of implementation of the Convention is to ensure the specific protection that these workers need. Hence the Convention requires in particular the adoption by the competent national authority of measures such as the publication of a notice relating to the specifications to ensure that tenderers are aware of the terms of the labour clauses (Article 2, paragraph 4, of the Convention). Notices must be posted in conspicuous locations at workplaces in order to inform the workers of their conditions of work (Article 4(a)). In addition, the existence of penalties laid down by the Convention, such as the withholding of contracts or the withholding of payments due to the tenderer (Article 5), make it possible, in cases where labour clauses are violated, to impose penalties on the contractor which may be more directly effective than penalties applicable to breaches of general labour legislation.

Consequently, the Committee asks the Government to take all necessary measures to ensure the inclusion of labour clauses in all public contracts as required by the Convention and to keep it informed of all developments in this respect. The Committee also asks the Government to supply copies of the general conditions which are currently applicable to the execution of public contracts.

The Committee also draws the Government’s attention to the General Survey which it has undertaken this year on labour clauses in public contracts, which presents the law and practice of the member States in this field and also an evaluation of the impact and current 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)

Part V of the report form. The Committee notes that for many years the Government has been indicating that there are no major developments to be reported and consequently has not provided any information on the practical application of the Convention. In this connection, the Committee recalls that under Part V of the report form governments are requested to give a general appreciation of the manner in which the Convention is applied, including, for instance, extracts from official reports, information concerning the number of contracts and workers covered by relevant legislation, etc. This form, which was adopted by the Governing Body of the ILO, is the main channel through which the Committee may obtain all the necessary information in order to follow the evolution of national laws and practice in matters covered by the Convention. The Committee would therefore be grateful if the Government would provide in its next report detailed and up-to-date information on the practical application of the Convention, including copies of public contracts, the model text of the labour clause currently in use, information from inspection services on the supervision and enforcement of national legislation and any other particulars bearing on the application of the Convention.