Direct Request (CEACR) - adopted 2022, published 111st ILC session (2023)

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

The Committee notes the observations of the Central Organization of Finnish Trade Unions (SAK), the Confederation of Unions for Professional and Managerial Staff in Finland (AKAVA) and the Finnish Confederation of Professionals (STTK), communicated together with the Government’s report. The workers’ organizations refer to their joint statement of 2006 and 2016, in which they underlined the lack of clarity in relation to whether municipalities could be considered central authorities within the meaning of Article 1(1) of the Convention. Moreover, they observe that there are cases of underpayment in municipal contracts, particularly in those for the provision of construction and cleaning services. To avoid this discrimination, especially of immigrant workers in sub-contracting, it should be also obligatory for the municipalities to inform tenderers about labour clauses and include collective agreements as one part to the public contracts. The Committee requests the Government to provide its comments in this respect.

Articles 1(1) and 2(1) and (3) of the Convention. Scope of application. Contractual provisions. Determination of clauses after consultations with social partners. The Government indicates that, following the adoption of the EU Directives on public procurement in April 2014, Finnish public procurement legislation has undergone an extensive reform. Overall, the reform aims, among other things, to simplify and improve procurement procedures and practices. In this context, the Committee notes with interest the amendments introduced to public procurement legislation beginning in 2015. These include amendments to the Act on Public Procurement and Concession Contracts (1397/2016), the Act on the Contractor’s Obligations and Liability when Work is Contracted Out (1233/2006), reformed in 2015, and the new Act on Posting Workers (447/2016), amended in 2020 (Amendment 743/2020) to improve supervision and to ensure that companies posting workers comply with Finland's terms and conditions of employment. With respect to the inclusion of clauses ensuring workers’ rights in public contracts, the Government indicates that section 98 of the Act on Public Procurement and Concession Contracts (1397/2016) contains provisions on special terms and conditions of a procurement agreement. The Committee notes that under section 98, subsections 2 and 3 of the Act on Public Procurement and Concession Contracts (1397/2016), a condition shall be included in a procurement agreement concluded between a central government authority and the successful tenderer in competitive tendering requiring compliance with at least the minimum terms and conditions of employment governing work of the same nature under the law and collective agreements of Finland in work that forms part of a procurement agreement to be implemented in Finland. The Committee further notes that this provision is based on Articles 1 and 2 of the Convention. With regard to the observations made by SAK, AKAVA, and STTK, the Government acknowledges in its response, that the provisions of section 98 subsection 2 of the Act (1397/2016) are not applied to municipalities unless the procurement agreement concerns public work. The Government indicates, however, that under subsection 3 of section 98, the provisions of subsection 2 concerning the duty of a central Government authority also apply when another contracting entity, for example, a municipality, concludes a procurement agreement concerning a public work. The Committee notes that, under section 98, subsection 1, the contracting entity may impose special terms and conditions on the implementation of a procurement agreement, provided that the said terms and conditions are linked to the procurement in the manner referred to in section 94. The Committee further notes that the reform of procuration legislation was prepared in a working group, where employers and workers were represented by the social partner’s organizations. The Committee requests the Government to communicate copies of model documents used in procurement procedures that contain labour clauses within the meaning of the Convention, to enable it to assess the manner in which the Convention is applied in law and in practice.

Article 2(4). Ensuring that tenderers are aware of labour clauses. The Committee has previously requested the Government to provide information on the manner in which it is ensured that tenderers have prior knowledge of the terms of the labour clauses. The Committee notes the indication of the Government that sections 13 and 14 of the Act on Confirmation of the General Applicability of Collective Agreements (56/2001) provide for the publication of decisions of the Confirmation Committee and Collective Agreements that have been confirmed as generally applicable. The Committee notes, however, that the Government does not provide any information on measures taken by the competent authorities to advertise the specifications of “labour clauses” to ensure that persons tendering for contracts are aware of the terms of these clauses. The Committee draws the Government’s attention to paragraph 125 of its 2008 General Survey on labour clauses in public contracts, which clarifies with respect to Article 2(4) of the Convention that “the purpose of this provision is certainly to ensure that the requirements of the labour clauses are respected, as well as to ensure that the resulting costs are properly factored into the bid”. The Committee requests the Government to provide detailed information on the manner in which it is ensured that labour clauses are brought to the attention of bidders and tenderers at the pre-selection stage, as required by the Convention.

Article 4. Posting of notices. Notification of all persons concerned. The Committee notes the information provided by the Government in reply to its previous request concerning the application of this Article of the Convention.

Article 4(b)(ii) and 5. System of inspection. Penalties. The Committee notes that section 2 of the Act on Public Procurement and Concession Contracts (1397/2016) repeals the Act on Public Contracts (348/2007), and sets out provisions in its section 154 on sanctions imposed by the Market Court. With regard to the inspection system, the Committee notes the information and statistics provided by the Government on the number of inspections, the number and type of infringements detected, and the sanctions imposed during the reporting period. In particular, the Committee notes that public administration actors, including municipalities, have been subject to monitoring projects related to the supervision of a contractor’s obligations and liability. For instance, it notes that in 2019-2020, a monitoring project targeting joint municipal authorities was implemented. During the project, 107 inspections were carried out from 1 January 2019 to 31 March 2020. A total of 187 guidelines were issued during the inspections. Guidelines for obtaining pre-contractual clarifications were issued in 74 cases, for the validity of clarifications in 23 cases, and the retention of clarifications in 25 cases. The negligence fee process was initiated in four cases, all due to non-compliance with the obligation to check. The Committee requests the Government to continue to provide up-to-date statistics on the number of inspections conducted, the number and type of infractions detected, and the sanctions applied.

Part V of the report form. Application of the Convention in practice. The Committee notes the information provided by the Government in reply to its previous request concerning the application of the Convention in practice.