The EFTA Surveillance Authority (ESA) have dropped their case against Norway alleging violations of EU regulations in labour clauses in public procurement contracts. The decision of the surveillance authority was announced in December 2012. Norway altered its regulations in 2011 to comply with European law on the free movement of services and the posted workers directive. There had been questions over Norwegian regulations since the controversial Rüffert case in 2008.
Background
The issue of labour clauses in public procurements has been subject to significant debate in Norwegian working life. The Norwegian regulations stipulate that public procurers must demand national wages and working standards for workers employed in supplier companies and/or subcontractors (NO0802049I).
In light of the ruling on the Rüffert case (C-346/06) by the European Court in 2008, the EFTA Surveillance Authority (ESA) decided to open a case against Norway. ESA monitors compliance with European Economic Area (EEA) rules in Iceland, Liechtenstein and Norway. ESA believed the Norwegian regulations violated existing European Union (EU) regulations on the free movement of services and the posted workers directive (96/71/EC).
Changes to regulation
As a result of criticism from the ESA, Norway altered the regulations in November 2011 in an attempt to make the rules more transparent for foreign service providers (NO0908049I, NO1201029I). The changes made sought to clarify the type of wages and working conditions that public procurers may demand. In addition, it also established that such clauses may only incorporate conditions already established in a collective agreement made generally applicable, or where no such agreement existed, in a nationwide collective agreement.
In December 2012, ESA decided to close the case against Norway. In its letter (425Kb PDF) to Norway, ESA wrote:
Taking into consideration the development of this case since its opening in June 2008, in particular the amendments adopted to Regulation No. 11212008 together with the increase in the number of universally applicable agreements, the scope of the infringement has significantly been reduced. The Authority considers it therefore appropriate, at the present stage, not to proceed further with this case.
ESA says, however, that it did not rule out the possibility of reopening the case at a later date under the same regulation. It further stated that this would depend on the manner in which the regulation was used, any new complaints received, and/or developments in EU law.
Reaction from social partners
The Norwegian Confederation of Trade Unions (LO) welcomed the ESA decision. It said it saw existing administrative procedures as important to ensure decent wages and working conditions for workers employed in, or working for, the state and local government.
The employer side was initially of the opinion that the changes made in 2011 were insufficient, and that the Norwegian regulations still contradicted the EEA agreement. The Confederation of Norwegian Business and Industry (NHO), the largest employer confederation in the private sector, said it found the ESA ruling curious. It pointed out that the number of collective agreements made generally applicable was no greater in 2012 than when the case was opened in 2008. It also underlined that the regulation only applied to public contracts, something which was regarded by ESA as one of the main problems when it first decided to open the case against Norway.
Alsos Kristin, Fafo