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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.