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Article 2 of the Convention. Insertion of labour clauses in public contracts. The Committee notes the explanations provided by the Government in its report that by virtue of the Collective Labour Agreements (Declaration of Generally Binding and Non-binding Status) Act of 1936 (AVV Act), the Government can decide that a collective agreement is of general applicability for a whole economic sector, which means that employers who are not members of the employers’ organization that negotiated the collective agreement are also bound by it, and that by virtue of the Employment Conditions Cross-border Employment Act of 1999 (WAGA Act), foreign workers working in the Netherlands must be paid according to the applicable collective agreement. The Government states that the AVV and WAGA Acts minimize the risk of competition among bidders for public contracts and provide adequate protection to workers. It recognizes, however, that the Convention is not fully implemented and that it is currently examining means for improving implementation and compliance with the Convention. The Committee welcomes the Government’s statement that it intends to take action to give full effect to the requirements of the Convention. It asks the Government to keep the Office informed of any progress made in this regard.

The Committee notes the observations made by the Netherlands Trade Union Confederation (FNV) with regard to the Government’s position on the application of the Convention. The FNV disagrees with the view that the existing legislation offers the type of protection envisaged by the Convention and calls upon the Government to accelerate the process in order to ensure compliance. The FNV indicates, first, that section 26 of the Order of 16 July 2005, authorizing the contracting authority to require the contractor to observe certain conditions, is purely permissive, and therefore not consistent with the clear requirement of Article 2 of the Convention, which provides that labour clauses must be included in public contracts. Secondly, according to the AVV Act, only collective agreements declared universally binding by the Minister of Social Affairs and Employment apply to all workers engaged in the execution of public contracts, which implies that unless all sectoral collective agreements are declared universally binding, the requirements of the Convention cannot be fully met. In this regard, the FNV refers to the collective agreement for the construction sector which, in the period from 2000 to date, has been declared universally binding for only one and a half years. As regards the coverage of collective agreements, the FNV expresses particular concern about the situation of posted workers whose status is further weakened following the judgment of the Court of Justice of the European Communities in the Rüffert case (upholding that the legislation of a German Länder which required bidders to commit themselves to pay collectively-agreed wages to all workers, including posted workers, was not compatible with EU law). The FNV emphasizes that, contrary to Germany which has not ratified Convention No. 94, the Netherlands is bound by the Convention and therefore the Court’s narrow interpretation of the Posting of Workers Directive cannot affect its obligations arising out of the Convention. Thirdly, the FNV raises the question of the applicability of the Convention to contracts awarded by local authorities that the Government has not yet addressed since it has never fully implemented the Convention. In the FNV’s opinion, the Convention applies to local government in the same manner and to the same extent as to central government, as they both exercise public authority. The Committee requests the Government to transmit any comments it may wish to make in reply to the observations of the FNV.

The Committee is also addressing a direct request to the Government concerning certain other points.