In a judgment handed down on September 18, 2014, the ECJ ruled that the condition for awarding a public contract in one Member State that requires the tenderer to pay its personnel a fixed minimum wage even when the contract service is to be carried out in a different Member State, breaches the principle of freedom of service provision. At one level the decision shouldn't come as a surprise because social rights never come out on top in conflicts between fundamental rights the EU. More interesting is however the fact that the judge based the decision on the fact that companies in Member States that pay low salaries should not be impeded from using this competitive advantage when tendering for public contracts. The court’s decision raises questions especially given that the EU has taken on new regulations covering the content of public contracts that are intended include social and environmental clauses.
The city of Dortmund called for tenders for a public contract relating to the digitalization of documents and the conversion of data for its urban-planning service. Specific conditions required the tenderer to guarantee payment to their employees of a minimum wage of 8.62 euros per hour. The tenderer was also required to insist that any subcontractor workers also be paid the minimum wage level of 8.62 euros per hour.
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