When tender turns tough: posted workers and the tendering regime in the Swedish construction industry

The outcome of the so-called Laval case and related judgments of the European Court of Justice (ECJ) has led to a debate about the future of the European social model. Although several analyses have focused on the downside of the judgments, in particular on the risk of ‘wage dumping’, one important but overlooked aspect is the connection to tendering regimes. This lacuna is crucial to labour recruitment practices in the construction industry because of the important role of public authorities as buyers of large construction services within the European Union. The research question is whether rigidity in how public authorities are required to tender contracts strengthens downward pressure on wages and induces a deterioration in working conditions. Case study material from Sweden is used in the context of extensive previous research and preliminary findings from an ongoing research project. Because of the short time span since the rulings of the ECJ there is only anecdotal evidence for establishing a mutually reinforcing connection between the system for awarding tenders in Swedish construction and the wider impacts of Laval on the labour market. Nevertheless, new evidence suggests that labour recruitment and human resource management practices are being shaped by a tendering regime governed by requirements of ‘cost flexibility’.