Labour Clauses (Public Contracts) Convention, 1949 (No. 94) - Israel (Ratification: 1953)

Observation (CEACR) - adopted 2024, published 113rd ILC session (2025)

Article 2 of the Convention. Inclusion of labour clauses and application of the Convention in practice. Responding to the previous comments of the Committee, the Government continues to refer to the Public Bodies Transaction Law 1976, the Mandatory Tenders Law 1992, the Mandatory Tenders Regulations 1993, and the Financial and Economic Regulations (Takam), as the legislation implementing the Convention. It also indicates the adoption of Regulations for the Increase of the Enforcement of Labour Laws, including: (i) Regulation No. 5783/2023 on wage components comprising contract workers’ hourly wages, in force since 1 January 2024, which imposes obligations on service recipients and service contractors in the cleaning, catering and security guard sectors to ensure the payment of the minimum hourly wage to service contractors’ employees; and (ii) Regulation No. 5777/2017 on certified wage inspectors, signed on 9 July 2017, which provides that service recipients who conduct periodic inspections through wage inspectors may be protected from prosecution. Furthermore, the Government states that, pursuant to the Law for Increased Enforcement of Labour Laws, No. 5772/2011, the Accountant General’s Division at the Ministry of Finance has been operating, since 2012, the system that centralizes audits of direct contracts between government ministries and service providers that provide services in the cleaning, catering and security guard sectors. Each service provider, after the audit, receives a score reflecting its compliance with labour laws, which accounts for 40 per cent of the overall score in the evaluation of its bid in government tenders. Lastly, the Government reports that, in December 2012, the Minister of Finance and the Chairman of the New General Federation of Labour signed a collective agreement with the aim of improving the wages and employment conditions of workers employed by providers of cleaning, catering and security guard services.

While noting this information, the Committee once again observes with regret that the public procurement legislation referred to by the Government only partially ensures application of the basic requirements of the Convention. It therefore once again recalls that the Convention applies to all public contracts involving the expenditure of funds by a public authority and the employment of workers by the other party to the contract, and includes contracts for construction, manufacture of goods, or supply of services. Moreover, the Convention calls for bidders to be informed in advance by means of standard labour clauses included in tender documents that, if selected, they would be required to apply, under the contract, wages and working conditions (including but not limited to working hours) not less favourable than the highest minimum standards established locally by law, arbitration or collective agreement, particularly given that in many cases minimum standards set by national legislation regarding wages and conditions of work may be exceeded under collective agreements. The Committee observes that no progress has been made with regard to the implementation of the Convention in either law or practice. Moreover, the legislation concerning the protection of rights of workers employed by service contractors in the cleaning, catering and security guard sectors, as referenced in the Government’s report, is not comprehensive in scope and does not fully reflect the core requirement of Article 2 of the Convention on the inclusion of labour clauses in public contracts. The Committee once again draws the Government’s attention to its 2008 General Survey on labour clauses in public contracts, paragraph 40, which states that the essential purpose of the Convention is to ensure that the 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, whether they are established by collective agreement or otherwise, in the locality where the work is done. Recalling that it has been highlighting the need to give full effect to the core requirements of the Convention for many years, the Committee hopes that the Government will take all necessary measures without further delay to bring the national legislation and practice into conformity with the Convention. The Committee once again requests the Government to provide all available information on the practical application of the Convention, including statistical information on the number and nature of public contracts established by different public bodies, samples of public contracts or standard contract forms, and extracts from reports of the inspection services showing the number and nature of any infringements detected and sanctions imposed. It also requests the Government to provide copies of official publications or studies on matters relevant to the Convention, such as reports of the activities of the Industrial Cooperation Authority (ICA), the enforcement agency under the public procurement legislation.

Direct Request (CEACR) - adopted 2016, published 106th ILC session (2017)

Article 2 of the Convention. Inclusion of labour clauses and practical application of the Convention in practice. The Committee notes the information provided by the Government in its report regarding measures taken to implement the Convention. It recalls that, in its previous and current reports, the Government has referred to the Public Bodies Transaction Law, 1976, the Mandatory Tenders Law, 1992, the Mandatory Tenders Regulations, 1993, and the Financial and Economic Regulations (Takam) as legislation implementing the requirements of the Convention. The Government indicates that these regulations establish strict conditions to ensure that the minimum core requirements of the Convention are met. The Government also refers to additional measures being taken for the protection of workers employed under public contracts, including the development of regulations under the new Law for Increased Enforcement of Labour Laws, as well as pricing regulations (components of wage pricing per hour) and wage inspector regulations. The Government indicates that these regulations are being developed together with the social partners. The Committee recalls its previous comments that the public procurement legislation referenced by the Government applies the basic requirements of the Convention only partially. It is once again compelled to note that the Convention applies to all public contracts involving the expenditure of funds by a public authority and the employment of workers by the other party to the contract, and includes contracts for construction, manufacture of goods, or supply of services. Moreover, the Convention calls for bidders to be informed in advance by means of standard labour clauses included in tender documents that, if selected, they would be required to apply, under the contract, wages and working conditions (including working hours) not less favourable than the highest minimum standards established locally by law, arbitration or collective agreement, particularly given that in many cases minimum standards set by national legislation regarding wages and conditions of work may be exceeded under collective agreements. The Committee therefore reiterates its request that the Government take all appropriate legislative or other measures to ensure that the core requirements of Article 2 of the Convention are fully implemented in all public procurement activities covered by this Convention. It also invites the Government to provide information regarding the development and adoption of the regulations referenced in its report. The Committee once again requests the Government to provide all available information on the practical application of the Convention, including statistical information on the number and nature of public contracts established by different public entities, samples of public contracts or standard contract forms, extracts from reports of the inspection services showing the number and nature of any infringements observed and sanctions imposed, and information, including copies of official publications or studies on matters relevant to the Convention, such as reports of the activities of the Industrial Cooperation Authority (ICA), the enforcement agency under the public procurement legislation.

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

Article 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes the Government’s reference to the Public Bodies Transaction Law, 1976, the Mandatory Tenders Law, 1992, and the Mandatory Tenders Regulations, 1993, as being the legislation implementing the requirements of the Convention. The Committee therefore understands that the Treasury Order No. 109/62 of 20 August 1962 which previously gave effect to the Convention is no longer in effect.

Having reviewed the public procurement legislation, the Committee considers that it applies only partially the basic requirements of the Convention. The Committee recalls, in this regard, that under the terms of the Treasury Order No.109/62, every contract entered into by the State, the carrying out of which involved the employment of employees by the other party to the contract, and the subject of which was the production, assembly, handling, or transportation of materials, goods or equipment, or supply, or the rendering of a service, had to stipulate that the party to the contract should pay wages to the employees employed by it in carrying out the work, and should maintain conditions of employment, in accordance with the collective agreement applying to the other party to the contract, in respect of the employees employed as aforesaid or, in the absence of such collective agreement, in accordance with the collective agreement applying to the greatest number of employees in the State, in the industry in which the aforesaid employees were employed. In the Committee’s view, such provision satisfactorily complied with the Convention in that it covered all public contracts and ensured wage levels and working conditions not less favourable than those fixed for similar work in the same area by the trade union representing the greatest number of workers in the country in the respective branch.

In contrast, the Rules of the Accountant General for the protection of rights of workers employed by services contractors in the guarding, security and cleaning sectors, a copy of which was attached to the Government’s last report, is not comprehensive in scope and does not fully reflect the core requirement of Article 2 of the Convention. These Rules apply only to contracts for guarding, security and cleaning services, while section 4.5.1.1 requires the contractor to pay the employees any payment or entitlement due to them under any law, collective agreement or extension order that applies to them. The Committee is obliged to point out that the Convention applies to all public contracts involving the expenditure of funds by a public authority and the employment of workers by the other party to the contract, whether these are contracts for construction, manufacture of goods or supply of services. It also recalls that the Convention requires wages and working conditions to be aligned to the best local practice, which in practice means collectively agreed standards covering a substantial proportion of employers and workers, even though the specific collective agreement containing such standards may not be applicable to the workers in question.

In addition, the Committee notes that under section 4.4.1 of the Rules, the conduct of the bidder may be taken into account as a criterion in the selection process (e.g., the absence of a negative report from a Ministry with which the bidder has contracted during the three years preceding the submission with respect to compliance with labour legislation). It also notes that under section 4.2.2 of the Rules, bidders are requested to attach a pricing appendix and to sign a declaration specifying the minimum wage rate which will be paid to employees for an hour’s work on a normal working day. It further notes that Appendix C of the Rules contains a model statement that the contractor must sign declaring that he/she has regularly paid all employees a salary that is not lower than the minimum wage prescribed under the Minimum Wage Act 5747 of 1987.

The Committee observes that all these clauses also fall short of the requirements of Article 2 of the Convention, which requires bidders to be informed in advance, by means of standard labour clauses included in tender documents, that, if selected, they would have to observe in the performance of the contract wages and other labour conditions not less favourable than the highest minimum standards established locally by law, arbitration or collective bargaining. The Convention does not relate to some general eligibility criteria, or prequalification requirements, of individuals or enterprises bidding for public contracts, but requires a labour clause to be expressly included in the actual contract that is finally signed by the public authority and the selected contractor. Nor is certification sufficient as it offers some proof about tenderers’ past performance and law-abiding conduct but carries no binding commitment with regard to prospective operations as labour clauses do. Moreover, 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, in view of the fact that in many cases the provisions of the national legislation respecting wages, hours of work and other conditions of employment provide merely for minimum standards which may be exceeded by collective agreements. The Committee accordingly requests the Government to take all appropriate measures, legislative or others, to ensure that the core requirement of Article 2 of the Convention is fully implemented in all public procurement activities that are covered by this Convention.

Part V of the report form. Application in practice. The Committee notes the statistical information that the central Government has approximately 400 contractual arrangements with over 100 security, guarding and cleaning enterprises, the financial value of which is approximately ILS120 million (approximately US$33 million). The Committee requests the Government to provide all available information on the practical application of the Convention, including, for instance, statistical information on the number and nature of public contracts established by different public entities, samples of public contracts or standard contract forms, including the uniform versions of Tender Documents provided for in section 24(a)(4) of the Mandatory Tenders Regulations, 1993, extracts from reports of the inspection services showing the number and nature of any infringements observed and sanctions imposed, and copies of any official publications or studies on matters dealt with in the Convention, such as activity reports of the Industrial Cooperation Authority (ICA) which is the enforcement agency under the public procurement legislation.

Direct Request (CEACR) - adopted 2006, published 96th ILC session (2007)

The Committee notes that for the last 40 years the Government has been reporting that there has been no change in the implementing legislation. The Committee understands, however, that the legislation on state contracting is now basically embodied in the Mandatory Tenders Act of 1992, and the four sets of mandatory tenders regulations issued between 1993 and 1998. The Committee requests the Government to specify whether the Treasury Order No. 109/62 of 20 August 1962 which gave effect to the Convention, is still in force, or whether subsequent reforms in public procurement legislation have affected the application of the Convention in either law or practice. It also asks the Government to forward copies of all relevant legal texts which may not have been submitted in earlier reports.

Moreover, the Committee notes that, since the ratification of the Convention, the Government has never provided information regarding its application in practice. It therefore asks the Government to supply, in accordance with Part V of the report form, any available statistics concerning the number of contracts and workers covered by the relevant legislation, standard contract forms or standard labour clauses currently in use, inspection results showing the number and nature of the contraventions reported, extracts from official reports or studies addressing issues connected with the social dimensions of public procurement, as well as any other particulars which would enable the Committee to gain a full appreciation of the means by which and the extent to which the Convention is applied.