Labour Clauses (Public Contracts) Convention, 1949 (No. 94) - Austria (Ratification: 1951)

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

Articles 1 and 2 of the Convention. Legislative framework and application of the Convention in practice. The Committee welcomes the information contained in the Government’s report. In particular, the Government indicates that the 2016 amendments to the Federal Law on Public Procurement provide explicitly that collective agreements, national legislation for the protection of workers, working and rest time, and legislation on equality of opportunity and treatment must be taken into account in the context of public contracts. The Committee notes with interest the information provided by the Government in relation to the decisions issued by the federal administrative and administrative appeals courts during the reporting period, particularly a decision issued by the administrative appeals court holding that tender bid winners are required to adhere to Austrian labour and social laws, even where the tender documents do not contain an explicit reference to this legal framework. The Committee requests the Government to provide updated information on the manner in which the Convention is applied in practice, including available statistics on the number of public contracts awarded per year and the approximate number of workers protected by the federal legislation giving effect to the provisions of the Convention. Please also provide sample copies of public contracts containing labour clauses, as well as extracts from inspection reports of the competent services showing the number and nature of violations and the sanctions imposed.

Direct Request (CEACR) - adopted 2007, published 97th ILC session (2008)

The Committee notes the information provided by the Government in its report, especially the enactment of the new Federal Law on Public Procurement (BGB1 I No. 17/2006) (Bundesvergabegesetz 2006) to implement directives 2004/18/EG and 2004/14/EG of the European Parliament. The Committee notes in particular that section 84(1) of the new legislation essentially reproduces section 71(1) of the previous Federal Law on Public Procurement of 2002, making an express reference to ILO Convention No. 94 and to all ILO fundamental Conventions, as being applicable in the process of bidding for, or executing, public contracts. The new legislation applies to contracts involving an expenditure of more than 40,000 euros (or 60,000 euros in certain sectors like electricity, water and traffic). Public procurement continues to be controlled at the national level by the Federal Public Procurement Office (Bundesvergabeamt, BVA) and at the level of the regions and municipalities by autonomous assemblies.

The Committee would be grateful if the Government would supply up to date information on the practical application of the Convention including, for instance, available statistics on the number of public contracts awarded per year and the approximate number of workers protected by the federal legislation implementing the Convention, sample copies of public contracts containing labour clauses, activity reports of the BVA or other official studies on matters related to the labour conditions applicable in the execution of public contracts, extracts from inspection reports of the competent services showing the number and nature of violations and the sanctions imposed, etc.

Finally, the Committee seizes this opportunity to refer to this year’s General Survey which contains an overview of public procurement practices and procedures in so far as labour conditions are concerned and makes a global assessment of the impact and present-day relevance of Convention No. 94.

Direct Request (CEACR) - adopted 2001, published 90th ILC session (2002)

The Committee notes the information provided by the Government in its report, and particularly Federal Act No. 56/1997 on the conclusion of contracts (BvergG), as amended by Act No. 120/1999, Amendment No. 199/1999 to Act No. 218/1975 respecting the employment of aliens, and Act No. 459/1993 adapting the legislation on employment contracts, as amended by Act No. 179/1999.

The Committee notes that, as a result of Amendment No. 120/1999, Federal Act No. 56/1997 on the conclusion of contracts allows for subcontracting to "affiliated enterprises", which are defined in section 15(6) as those over which the adjudicating authority, the applicant or the tenderer can exercise directly or indirectly a "determining influence", which is assumed to exist where an enterprise possesses, directly or indirectly, the majority of the capital subscribed by another enterprise or the majority of voting rights related to shares in another enterprise or can designate over half the members of the management board, board of directors or bodies controlling another enterprise.

The Committee also notes Ruling No. G462/97 of 24 June 1998 of the Constitutional Court, under which, in the event that sanctions have been imposed on tendering enterprises under the Act respecting the employment of aliens, there are no objective grounds for the automatic elimination of these tendering enterprises from the adjudication procedure, which would be contrary to the constitutional provisions respecting equality, without the enterprise concerned having had the opportunity to explain why it should still be considered to be trustworthy despite the sanctions imposed upon it. The Committee notes that, according to the Government’s report, an accumulation of sanctions under the Act respecting the employment of aliens always results in elimination from the adjudication procedure, since section 52(3) of the Federal Act on the conclusion of contracts sets out the presumption (which may be challenged) that, where an investigation conducted under section 28(b)(1) of the Act respecting the employment of aliens reveals legally valid sanctions, the trustworthiness of the tenderer is not proven, and the latter must therefore provide proof to the contrary  by demonstrating that it has taken the measures envisaged by section 52(4) and (5) of the Federal Act on the conclusion of contracts in order to prevent new violations liable to give rise to sanctions under section 28(1)(1) of the Act respecting the employment of aliens.

The Committee notes that Amendment No. 179/1999 to Act No. 459/1993 adapting the legislation on employment contracts establishes a system of sanctions in the event of illegal subcontracting, under which the principal subcontractor is held responsible as guarantor in the eyes of the law in relation to the adjudicating authority for the payment of the wages of workers employed by a secondary subcontractor located in a member country of the European Economic Area (EEA).

The Committee also notes that, in reply to its previous comments concerning the application of Article 5, paragraph 1, of the Convention, the Government refers in its report to Administrative Decision No. 1/98 of 19 January 1998 of the Federal Office for the Conclusion of Contracts, which confirms the fact that enterprises which do not comply in their tenders with the working conditions and standards of the labour legislation in force in Austria are excluded in practice from the adjudication procedure. In practical terms, in the case in point, a tender was excluded by reason of failure to comply with the labour legislation in the calculation of the payment of overtime hours in the tender.

The Committee requests the Government to continue providing information on the application of the Convention in practice.

Observation (CEACR) - adopted 1997, published 86th ILC session (1998)

In its previous observation, the Committee noted the information supplied by the Government with regard to the scope of the Federal Act on the Award of Contracts (B Verg G) BGBI No. 462/1993. It also noted in its earlier observation, the comments of the Federal Chamber of Labour, according to which: (i) the criteria established for the conduct required of employers in connection with the award of public contracts are too narrow (only illegal employment of foreigners, non-payment of taxes and other levies and failure to meet levels of pay set out in collective agreements are penalized, but not the violation of other labour law provisions, such as the right to vacation); and (ii) mandatory penalties are laid down only for repeated violations of regulations governing the employment of foreigners, while for the other offences, the contract-awarding authorities are granted a broad discretion on the award of contracts.

The Government indicates in its communication that section 44, paragraph 1, item (4) of the Act gives no restrictive list of acts constituting "serious" misconduct, and that any breach of law may be grounds for elimination from tendering procedure. The Government further states, regarding the practical application, that the Federal Ministry of Economic Affairs has immediately eliminated from its adjudications companies which have prepared and submitted their tenders on a basis which does not meet the working conditions and social law standards in force, and that this has been applied to tenders from firms in the States undergoing reform and tenders involving substantial subcontracting of services to companies from those States (e.g. the conducting of chemical analyses).

The Committee notes this information. With reference to Article 5(1) of the Convention which calls for the application of adequate sanctions for failure to observe the labour clauses in public contracts, the Committee requests the Government to continue to supply information on the practical application of the provisions of the Act.

Observation (CEACR) - adopted 1995, published 82nd ILC session (1995)

1. Further to its previous observation, regarding the comments made by the Austrian Congress of Chambers of Labour, the Committee notes the information supplied by the Government which refers to two cases (both concerning Lower Austria Autobahn Agency in 1992), in which point 4.50 of the rules concerning the adjudications for the order of public workers was applied: in the first case, the lowest bidding company, which had been suspected and partially convicted of the violation of some labour laws, was dropped pursuant to the said provision; in the second case, the offer of a consortium including the same company was similarly dropped.

2. The Committee also notes the new Federal Act on the Award of Contracts (B Verg G) BGBI No. 462/1993. The Act provides in section 22 paragraphs 9 and 10 that, in respect of public contract-placing authorities as defined under its section 6, the tender documents must include provisions concerning compliance with the obligations arising out of ILO Conventions Nos. 94, 95 and 98 and that the tenderer must, in making the bid, commit himself to observing those provisions in the implementation of the contract. The Committee requests the Government to indicate whether the above-mentioned rules concerning the adjudications and other statutes that it has so far noted as regards the application of this Convention are still in force under the new Federal Act and, if not, to provide the new texts that replace them. It also asks the Government to continue to supply information on the enactment of similar acts by Laender authorities.

3. The Committee notes that the Government's report also includes the comments of the Federal Chamber of Labour, which, while welcoming the enactment of the new Act, points out that: (i) the criteria established for employer conduct in connection with the award of public contracts are too narrow (only illegal employment of foreigners, non-payment of taxes and other levies and failure to meet levels of pay set out in collective agreements are penalized, but not the violation of other labour law provisions, such as the right to vacation); and (ii) mandatory penalties are laid down only for repeated violations of regulations governing the employment of foreigners, while for the other offences, the contract-placing authorities are granted a broad discretion on the award of contracts. The Committee asks the Government to provide its observations in respect of these points, as well as information on the application in practice of the new Act.

Observation (CEACR) - adopted 1995, published 83rd ILC session (1996)

1. Further to its previous observation, the Committee notes the information supplied by the Government with regard to the present scope of the Federal Act on the Award of Contracts (B Verg G) BGBI No. 462/1993 and to its extension to contracts for building, which is in preparation. It also notes the information supplied by the Government on the enactment of similar acts by Laender authorities. The Committee requests the Government to continue to supply information on developments in legislative and other measures concerning the application of the Convention.

2. The Committee noted in its previous observation, the comments of the Federal Chamber of Labour, according to which: (i) the criteria established for employer conduct in connection with the award of public contracts are too narrow (only illegal employment of foreigners, non-payment of taxes and other levies and failure to meet levels of pay set out in collective agreements are penalized, but not the violation of other labour law provisions, such as the right to vacation); and (ii) mandatory penalties are laid down only for repeated violations of regulations governing the employment of foreigners, while for the other offences, the contract-placing authorities are granted a broad discretion on the award of contracts.

The Government indicates in response that the specific provision regarding infringements of the legislation on the employment of foreigners is included in the above Act (section 10, paragraph 3) because it was expressly called for in a National Council resolution, and that under section 44, paragraph 1, item (4) of the Act, infringements of working time and other provisions of labour law would also constitute a reason for exclusion from tendering procedure. In addition, the Government considers it difficult to establish a clear, exhaustive and comprehensible definition of misconduct deserving exclusion, given the range of labour and social provisions and the multitude of possible offences.

The Committee notes this information. It recalls that Article 5(1) of the Convention calls for the application on adequate sanctions for failure to observe the labour clauses in public contracts. The Committee would point out that, to ensure the application of this provision of the Convention in practice, it is not enough just to stipulate possible measures of sanction in legislative provisions, but it is necessary to implement in practice such provisions of sanction. It therefore requests the Government to supply information on measures taken to ensure the practical application of the provisions of the Act, and in particular on cases in which its section 44, paragraph 1, item (4), was actually applied to infringements of provisions concerning labour conditions (such as wages, working hours, safety and health).

Observation (CEACR) - adopted 1992, published 79th ILC session (1992)

The Committee takes note of the information supplied by the Government in its latest report and, in particular, the comments made by the Austrian Congress of Chambers of Labour.

The Austrian Congress of Chambers of Labour expresses its view in relation to Article 5 of the Convention that there are many public authorities which order public works without applying the procedure of refusal of contract for infringement of the provisions of labour clauses or which let themselves be persuaded by interventions and give order again to the enterprises known for the non-observance of the labour clause. It also maintains that the application of other sanctions is not ensured either, because of the lack of personnel in labour inspection, because of the type of organisations bound to take the sanctions, i.e. the local authorities, and because of the provisions of the penal law. It refers, in this connection, to its own comments made on the application of Convention No. 6 which the Committee noted in its direct request of 1990 on the said Convention.

In reply to these comments, the Government indicates the increase of labour inspection personnel by 15 persons and refers to the Code of ethics in the construction industry and, in particular, to the rules made thereunder. Point 4.50 of these rules concerning the adjudications for the orders of public works provides for the refusal of offer made by tenderers whose observance of the social laws of protection is not absolutely certain. The text of the said Code and point 4.50 of the rules as well as the statutes of the committee for the control of adjudications are supplied by the Government with its report.

The Committee notes this information and would be grateful if the Government would provide information on the cases in which point 4.50 of the above-mentioned rules is actually applied and on the practical application of other measures to ensure the observance of labour clauses in public contracts, including, for instance, extracts from official reports, in accordance with Article 5 and point V of the report form.