Germany: Court rules on dispute over subcontractors paying the national minimum wage
Public bodies cannot force their subcontractors to pay the minimum wage to workers, a court has ruled.
On 18 September 2014, the European Court of Justice (ECJ) took a decision (C-549/13) against the public procurement legislation of the state of North Rhine-Westphalia (NRW) which, under the act on binding collective bargaining regulation in public procurement, stipulates that at least a minimum wage (currently €8.62per hour) must be paid by any tenderer and his subcontractors.
The court was ruling in the case of the city of Dortmund (NRW) which awarded a contract to the Federal Printing Establishment (Bundesdruckerei). The work was subcontracted to a Polish business operating in Poland.
Under the NRW legislation, the Bundesdruckerei was obliged to pay the minimum wage. The ECJ ruled that this legal requirement prevents subcontractors established in other Member State from deriving a competitive advantage from differences in the respective rates of pay. It ruled that NRW legislation goes beyond what is necessary to ensure that the objective of employee protection is met.