The (In)Visible Third Party: De- and Re-regulation of Working Conditions through Public Procurement

The liberalisation and privatisation of public services implies a gradual transformation of the state from an ‘employer’ to a ‘customer’ buying products and services from private providers. This in turn changes its regulatory role in the realm of employment conditions. By transferring the operation of public tasks to private contractors, public authorities also lay on them the responsibility of determining wages and other working conditions for employees who carry out the (formerly) public tasks. But even though in these cases public authorities no longer act as social partners in bipartite collective negotiations (or as employers unilaterally defining working conditions for their own employees, as in the case of civil servants), they can still exert considerable influence on the employment conditions offered by their private contractors through a different set of policies: firstly, through general policies covering the entire workforce (such as labour market regulation and social policies), and, secondly, through policies and practices based on public authorities’ power of demand — for instance by making certain social standards a selection criteria in public procurement procedures. Job quality in the contracted-out segments of the public sector is therefore not out of reach of the public authorities; yet, to achieve job quality they have to redefine their role, becoming a third party in the definition of employment conditions, in addition to the two other parties involved, namely (the representatives of) the private contractors and their employees.