Article 16 - Freedom to conduct a business
Article 52 - Scope and interpretation
Key facts of the case:
Reference for a preliminary ruling — Public procurement — Directive 2014/24/EU — Article 10(g) — Exclusions from its scope — Employment contracts — Definition — Decisions of public hospitals to conclude fixed-term labour contracts for the purposes of catering, the provision of meals and cleaning — Directive 89/665/EEC — Article 1 — Right to an effective remedy.
Outcome of the case:
On those grounds, the Court (Ninth Chamber) hereby rules:
19) It also asks whether Article 63 of Law 4430/2016, in so far as it allows such contracts to be concluded without using the procedures laid down in Directive 2014/24, infringes the provisions of that directive, those of the TFEU relating to freedom of establishment and freedom to provide services, Articles 16 and 52 of the Charter of Fundamental Rights of the European Union (‘the Charter’), and the principles of equal treatment, non-discrimination, transparency and proportionality. In that regard, the referring court considers that, in view of the purpose and estimated cost of the labour contracts, there can be no doubt that a public procurement procedure with the same purpose would be the subject matter of a cross-border interest.
21) In those circumstances the Symvoulio tis Epikrateias (Council of State) decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling:
‘(1) For the purposes of Article 10(g) of Directive [2014/24], is it sufficient ground, for the classification of a contract as an ‘employment contract’ under that provision, that it constitutes a contract with an employer-employee relationship or is it necessary that that contract have particular characteristics (for example with respect to the nature of the work, the contract terms, the qualifications of candidates, the procedural rules for their selection), so that the selection of each employee should be the result of an individualised judgment and subjective assessment of his or her personal qualities by the employer?
Can fixed term labour contracts which are allocated on the basis of objective criteria, such as the length of time the candidate has been unemployed, the candidate’s previous experience or the number of minor children he or she has, as the result of a formal check of supporting documents and a predetermined weighting of the above criteria, such as contracts under Article 63 of Law 4430/2016, be regarded as “employment contracts” within the meaning of Article 10(g) of Directive 2014/24?
(2) For the purposes of the provisions of Directive [2014/24] (Articles 1(4), 18(1) and (2), 19(1), 32 and 57, read in conjunction with recital (5) of that directive), of the Treaty on the Functioning of the European Union (Articles 49 and 56) and of the [Charter] (Articles 16 and 52), and the principles of equal treatment, transparency and proportionality, is it permitted for public authorities to have recourse to other means, including employment contracts, to the exclusion of public procurement contracts, in order to meet the same public interest requirements, and if so, on what conditions, when that recourse is not part of the recurrent organisation of the public service, but — as in the case of Article 63 of Law 4430/2016 — takes place for a defined period of time and to deal with extraordinary circumstances, as well as for reasons that relate to the effectiveness of competition or the legitimacy of the operations of undertakings which are active in the public procurement market?
Can reasons of that kind, as well as circumstances such as the weakness of the unhindered performance of public contracts or the realisation of greater financial benefit compared with a public contract, be regarded as overriding reasons in the public interest, which justify the adoption of a measure which leads to a serious restriction, in extent and duration, on business activity in the field of public procurement?
(3) For the purposes of Article 1 of Directive [89/665] … does the scope of that provision exclude judicial protection against the decision of a public authority, such as the contested decisions in the main proceedings, with respect to the award of contracts that are treated as not falling within the scope of Directive 2014/24 (for example, as an ‘employment contract’), when an action is brought by an economic operator which would have a legal right to be awarded a comparable public contract and which claims that Directive [2014/24] has been unlawfully not implemented on the ground that its non-implementation was permissible?’
34) By its second question, the referring court asks, in essence, whether the provisions of Directive 2014/24, Articles 49 and 56 TFEU, the principles of equal treatment, transparency and proportionality, and Articles 16 and 52 of the Charter preclude a decision of a public authority to make use of employment contracts such as those at issue in the main proceedings in order to perform certain tasks falling within its public interest obligations.
38) In the third place, as regards Articles 16 and 52 of the Charter, it should be recalled that, in accordance with Article 51(1), the provisions of the Charter are addressed to the Member States only when they are implementing EU law. Under Article 51(2), the Charter does not extend the scope of EU law beyond the powers of the Union, and it does not establish any new power or task for the Union, or modify powers and tasks as defined in the Treaties. Accordingly, the Court is called upon to interpret EU law, in the light of the Charter, within the limits of the powers conferred on it (judgment of 8 November 2012, Iida, C‑40/11, EU:C:2012:691, paragraph 78 and the case-law cited).
39) As is apparent from paragraphs 35 to 37 above, the public hospitals’ decisions to conclude the employment contracts at issue in the main proceedings do not fall within the implementation of EU law within the meaning of Article 51 of the Charter, so that the conformity of those decisions with fundamental rights cannot be examined by reference to the rights established by the Charter.
40) Consequently, the answer to the second question is that the provisions of Directive 2014/24, Articles 49 and 56 TFEU, the principles of equal treatment, transparency and proportionality, and Articles 16 and 52 of the Charter do not apply to a decision of a public authority to make use of employment contracts such as those at issue in the main proceedings in order to perform certain tasks falling within its public interest obligations.
48) Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.