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Tuesday, 28 November 2017 08:31

New Law on public contracts

The new Law on Public Contracts promises to improve the quality of employment in Spain. Its majority approval in Congress demonstrates the rejection of any regressive amendment that seeks to relax working conditions. Next, we summarize what changes and what remains with the new measures.

CONTRACT LAW OF PUBLIC CONTRACTS: WHAT IS AND WHAT DETERMINES

The agreements between the Spanish Public Administration and private management have been frequent in recent decades. Currently, about 18% of the Spanish administrative revenue corresponds to these contracts.

These agreements involve the interest of numerous workers and make necessary modifications to cover their employment situation. For this reason, the new Contract Law was proposed.

The purpose of this law is to translate the Council's decisions of February 26, 2014 and the European Parliament Directives. Specifically, it involves reducing administrative taxes and accelerating the procedures in these contracts, eliminating considerable bureaucratic burden.

It will be applied in most public liability activities that are carried out under concessions to private companies.

Its approval was applauded by the unions, because it allows to advance in the protection of labor rights. With it, Spanish workers and workers will be able to feel more and more closer to social justice.

This conquest comes late if we compare with the public procurement updates that take place in Europe since 2014.

ELECTRONIC INVOICE AND CONTRACT SUPERVISION OFFICE

The new Law on Public Sector Contracts establishes the obligatory nature of the electronic invoice. It also provides for the creation of an independent office whose function is exclusively to control contracts and guarantee free competition.

The intention is to establish limits on what regulates, with respect to the modifications of contracts with private companies. It is intended to prevent them from exceeding 20% of the amount contracted.

On the other hand, the objective is to take the companies to finance the relationship with the Administration in relation to the development of works and services.

THE NEW LAW ON PUBLIC CONTRACTS: LABOR INCLUSION AND SOCIAL RIGHTS

The new law is also marked by the presence of labor inclusion clauses, social rights and environmental preservation.

The initiative to reserve a certain percentage of the contracts for the labor insertion of people with disabilities stands out. In addition, new parameters of economic development that aim to preserve the fauna and flora native to Spain are established.

PROMOTION TO PYMES

Spanish PYMES also have reasons to celebrate. The new Law on Public Contracts obliges to dedicate a certain percentage of private contracts exclusively to their development.

The main objective is to make PYMES get easier access to public procurement. These new companies would not have to check previous jobs with the Administration to access said benefit.

OTHER BENEFITS OF THE NEW LAW ON PUBLIC CONTRACTS

Another important advance is that workers can directly terminate their contracts due to unpaid wages. The intention is to diminish the bureaucracy and break the hegemony of the contracting company.

In addition, it aims to increase the transparency of minor contracts, whose intention is to lower wages and reimburse for dismissals.

Public administrations will now have the obligation to check that the companies with which they have contracted meet the payment deadlines with their subcontractors, being able to establish penalties in contracts exceeding five million.

The new Public Contracts Law also obliges the Public Administration to inspect the companies and their subcontractors. The objective is to guarantee that the deadlines to pay workers are respected, being able to establish economic penalties and judicial charges.

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