European Trade Union Institute, ETUI.

Rüffert C-346/06

  • The facts

A German company won the tender with the Land Niedersachsen which involved construction work in a prison. The public procurement law of that Land states that “the contracts for building services shall be awarded only to undertakings which, when lodging a tender, undertake in writing to pay their employees, when performing those services, at least the remuneration prescribed by the collective agreement in the place where those services are performed …”. The German company subcontracted the work to a Polish company and it turned out that the 53 Polish workers actually only earned 46,57 % of their German colleagues on the site. Therefore the Land Niedersachsen applied the contractual penalties and annulled the contract and imposed financial penalties on the company.

  • The judgement

Again the ECJ produced a judgement along the lines of the Posting of Workers Directive. In its view the situation in Niedersachsen did not fulfil the criteria to fix pay as set out in the Directive as the law does not itself fix any minimum rate of pay and the collective agreement in question had not been declared universally applicable. Again the Court argued that the Posting of Workers Directive outlines the maximum level of protection for posted workers and that in a collective agreement, as in this case, a higher level of protection cannot be laid down.

Again the Court underlines the need for justifying the restriction of the freedom to provide services. The ECJ sees no justification in protecting workers in this particular case, as the legislation only applies to the public and not private sector. The ECJ also rejected the following arguments: the financial sustainability of social security systems or ensuring the freedom of collective bargaining and the freedom of association.

Read the judgement

Read the opinion of Advocate General BOT