Action brought on 24 June 2008 — Commission v Germany

(Case C-271/08)

(2008/C 223/43)

Language of the case: German

Parties

Applicant: Commission of the European Communities (represented by: G. Wilms and D. Kukovec, Agents)

Defendant: Federal Republic of Germany

Form of order sought

Pleas in law and main arguments

In Germany, employees have the right to demand that part of their future earnings — up to 4 % of the relevant contribution assessment ceiling for the statutory pension fund — are paid into their occupational pension schemes through the conversion of earnings into pension contributions (Entgeltumwandlung). According to the Tarifvertrag zur Entgeltumwandlung für Arbeitnehmer/-innen im kommunalen öffentlichen Dienst (Collective agreement on the conversion of earnings into pension contributions for local authority employees — ‘the collective agreement’) the conversion of earnings into pension contributions is the responsibility of local authorities or, as the case may be, local authority undertakings. The conversion of earnings into pension contributions has to implemented through public bodies offering supplementary private pensions or, as the case may be, undertakings that are part of the Sparkassen finance group or local authority insurance companies (Kommunalversicherer). As a general rule, local authorities or, as the case may be, local authority undertakings enter into group insurance contracts for all their employees, under which the conversion of earnings into pension contributions is agreed with one of the organisations mentioned above.

According to information available to the Commission, local authorities or, as the case may be, local authority undertakings awarded those public service contracts relating to occupational pension schemes directly to the organisations and undertakings mentioned in the collective agreement, without first issuing a European call for tenders.

Public services relating to occupational pension schemes fell within the scope of Annex I A, category 6 of Directive 92/50/EC and, since 1 February 2006, have come under Annex II Part A of Directive 2004/18/EC. They constitute insurance and pension fund services that do not fall within the scope of the statutory social security system. Therefore, the service contracts at issue, which were awarded by local authorities — in other words, contracting authorities — constitute public contracts for pecuniary interest concluded in writing within the meaning of the abovementioned directives. In addition, according to the case-law, Article 1(a) of Directive 92/50/EC does not make a distinction between contracts that a contracting authority awards in the context of carrying out its general interest functions and contracts that are not connected to those functions. Therefore, the Court of Justice rejected the idea that the nature of a contracting body can be determined by its function. The objection raised by Germany that, as regards occupational pension schemes, public authorities or, as the case may be, local authority undertakings do not — for the purposes of procurement law — carry out the functions of contracting authorities, could not be upheld.

Further, the Commission takes the view that the contracts at issue exceeded the relevant thresholds by a significant amount. Contrary to the view taken by the defendant, that calculation does not have to be done for every single contract. What matters is the duration of the framework agreement since, for the purposes of Community law on public procurement, the public contract does not concern individual agreements between the employee and the employer. Accordingly, the value of a framework agreement to be taken into account is equivalent to the estimated total value — net of value added tax — of all contracts whose implementation is envisaged throughout the entire duration of the framework agreement. According to calculations undertaken by the Commission, at least 110 cities in the Federal Republic of Germany exceeded the threshold.

Local authorities and local authority undertakings should not have awarded public service contracts relating to occupational pensions schemes to organisations and undertakings mentioned in the collective agreement, but rather after issuing a European call for tenders. This finding is not affected by the fact that continued payment of remuneration has been agreed under a collective wage agreement. First, the case-law of the Court of Justice clearly shows that Community law does not make general provisions for collective bargaining autonomy and, second, the Commission cannot see how, if contracting authorities were to fulfil their obligation to put contracts out to public tender, this would limit the application of the principle of collective bargaining autonomy enshrined in the German Basic Constitutional Law.

(1)  OJ 1992 L 209, p. 1.

(2)  OJ 2004 L 134, p. 114.