Labour Clauses (Public Contracts) Convention, 1949 (No. 94) - Serbia (RATIFICATION: 2014)

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The Committee notes the observations of the Confederation of Autonomous Trade Unions of Serbia (CATUS), received on 7 November 2018 and the observations of the Serbian Association of Employers (SAE), received on 31 August 2017. The Committee requests the Government to provide its comments in this respect.

Articles 1 and 2 of the Convention. Application in practice. Part V of the report form. The Committee welcomes the Government’s first report on the application of the Convention and the legislative texts attached. With respect to implementation of the Convention’s provisions, the Government indicates that a working group was established and charged with preparing a preliminary register (a so-called white and blacklist) of companies and other organisations operating in the fields of design, construction and supervision of transport infrastructure (Decision: 119-01-00309/2014-01 of 2 October 2014). The working group has also established and developed a Scorecard, updated quarterly, which ranks the companies and other organisations on the register, on the basis of, among other things, their compliance with legal and contractual obligations towards their employees. In its observations, the CATUS maintains that the Convention is not applied in practice, indicating that certain businesses in the road transport industry and their subcontractors do not pay wages to their employees regularly and do not pay social insurance contributions. The CATUS also alleges that the regulations applicable to the construction sector governing working hours and working conditions on construction sites are not respected. The Committee notes that, in 2017, the CATUS organised and carried out unannounced labour inspections throughout Serbia, particularly with regard to employment relations and occupational health and safety on construction sites. The CATUS carried out some 247 inspections on construction sites in the country which found that, of 1,134 workers on the sites inspected, 181 (16 percent) of them were working without employment contracts or social insurance. The Confederation adds that, on certain construction sites, unregistered workers fled the workplace when the inspectors arrived, out of fear that they would lose their jobs. The CATUS indicates that the labour inspectors estimated that more than 100 persons fled the inspected construction sites. They found that some of the employers concerned do not respect working hours and do not pay taxes or contributions for social insurance. In its observations, the SAE expresses the view that, while the Convention provides for the protection of workers and suppliers its provisions penalise local companies. The SAE submits that, if local companies respect the provisions of the Convention, they will not be able to compete with foreign bidders, considering that the latter are frequently in a more advantageous position in tender procedures, as they are not necessarily bound by the same standards as those that apply to local companies. The SAE submits that, as a consequence, foreign bidders often prevail in the bidding process. It alleges that these foreign bidders then subcontract local companies and often blackmail them. In addition, on occasions, the foreign companies fail to pay the wages due, but rather take the profits and leave. The SAE further observes that the Convention, if fully applied, has the potential to protect not only workers, but also local businesses and companies by excluding certain “favoured” bidders from the bidding process, where they do not respect the social rights of workers. The SAE indicates, however, that the Government is not yet planning to apply the provisions of the Convention. The Committee notes that the Government provides no precise information regarding the manner in which the main provisions of the Convention are given effect. In this regard, the Committee draws the Government’s attention to its 2008 General Survey on Labour clauses in public contracts, paragraphs 19 to 22, in which the Committee noted that Convention No. 94 covers three main subjects: (i) the types of public contracts that should contain labour clauses; (ii) the content of labour clauses and the means for determining such content at the national level; and (iii) the methods for enforcing the terms of labour clauses. First, with regard to the types of contracts to which labour clauses should apply, the Convention establishes that labour clauses should be inserted in contracts awarded by central public authorities not only for certain construction works, but also for the manufacture of goods, shipment of supplies and equipment, or the supply of services. It provides that such labour clauses should also apply to subcontractors. Second, as regards the content of labour clauses, the Convention provides that they should ensure to the workers concerned wages, hours of work and other conditions of labour which are not less favourable than those established by collective agreement, arbitration award, or national laws, for work of the same character in the trade or industry concerned in the district where the work is performed. Third, in respect of enforcement measures, the Convention requires the establishment and maintenance of an adequate system of inspection, as well as the imposition of specific remedies and sanctions to ensure compliance with the terms of labour clauses. As the Committee pointed out in paragraph 176 of its 2008 General Survey, the Convention has a very simple structure, with all of its provisions being articulated around and directly linked to the core requirement of Article 2(1): the insertion of labour clauses ensuring favourable wages and other working conditions to the workers concerned. The Committee requests that the Government take all necessary measures to ensure that: (i) the public procurement legislation provides for the insertion of the labour clauses required under Article 2 of the Convention in all public contracts, whether these are contracts for construction works, the manufacture of goods or supply of services; (ii) the terms of the labour clauses are determined after consultation with the employers’ and workers’ organizations concerned; and (iii) the labour clauses are brought to the knowledge of tenderers by including them in tender documents. The Committee requests that the Government keep the Office informed of measures taken or envisaged to give full effect to the provisions of the Convention. The Committee recalls that the Government can avail itself of the technical assistance of the ILO in this regard, should it wish to do so.