Court of Justice of the European Union (EuGH) strengthens social award criteria: higher wages can be an award criterion

The Court of Justice of the European Union (EuGH) has decided under what circumstances social award criteria are permissible under public procurement law.

The question of howsocial award criteriacan be integrated into procurement procedures has preoccupied public contracting authorities and bidders for years. In particular, the question arises of how far social objectives – such as improved working conditions – may be taken into account in the award decision without breachingcompetition, equal treatment and transparency.

The Court of Justice of the European Union (EuGH) has provided an important clarification on this matter withjudgment of 5 March 2026 (Case C-210/24): An award criterion that evaluates above-tariff wage increases for the personnel deployed in the performance of the contract can be permissible, provided that it is linked to the subject matter of the contract and the public procurement principles are respected.

The judgment concerns in particularsocial services, where the quality of the performance depends heavily on the personnel deployed. For public contracting authorities, the decision opens up scope in the design of quality and social criteria – while at the same time it sets clear public procurement limits.

Background: social award criteria in public procurement law

Pursuant to Art. 67 of thePublic Procurement Directive 2014/24/EUthe award shall as a rule be made to themost economically advantageous tender. This can be determined on the basis ofbest price-performance ratio. In doing so, in addition to economic considerationsqualitative, environmental or social aspectsmay be taken into account, provided that they arelinked to the subject matter of the contract.

Particularly in the field of social services, EU law emphasises the importance ofquality, continuity, accessibility and availability of services. In such labour-intensive sectors, social award criteria can therefore be relevant if they are directly related to the working conditions of the personnel deployed.

The central public procurement law question is, however:
May a contracting authority evaluatehigher wages as an award criterion?

That is precisely what this case was about

The Spanish municipality ofOrtuellacalled for tenders for ahome care service. The contract value was approximately€166,250and thus below the EU threshold for social services. Nevertheless, the provisions of Directive 2014/24 applied because national law extended them to such contracts.

The tender documentation provided for an award criterion that awardedup to 40 pointsfor anincrease in the wage bill of the personnel deployed above the tariff level.

Bidders could thus obtain additional points through social award criteria if they undertook to pay employees higher remuneration than provided for in the applicable collective labour agreement for the industry. Furthermore, the successful tenderer was to negotiate with employee representatives after award of the contract on the concrete implementation of the wage increase.

An industry association sued against this criterion. It argued, among other things:

• The wage increasedoes not have a sufficient link to the subject matter of the contract.
• The criterion coulddisadvantage smaller undertakingsthat could not afford to pay higher wages.
• Moreover, it couldinterfere with collective bargaining autonomy.

The competent Spanish public procurement authority referred these questions to the Court of Justice of the European Union (EuGH) for a preliminary ruling.

The legal reasoning of the Court of Justice of the European Union (EuGH)

Social award criteria are permissible in principle

The Court first clarifies that the directivedoes not contain an exhaustive list of award criteria. Public contracting authorities may therefore alsotake social award criteria into account, provided that these are linked to the subject matter of the contract.

Awage increase for the personnel executing the contract is by its nature a social aspect and may therefore in principle constitute a permissible award criterion.

Connection to the subject matter of the contract

The decisive factor pursuant to Art. 67 (3) of the directive is theconnection to the subject matter of the contract. This requirement is interpreted broadly.

The EuGH emphasizes that award criteria may also concern factors affecting theprocess of service provision, even if they are not part of the material service.

In the specific case, such a connection was evident:

• The contract concernedhighly labour-intensive social services.
• The quality of the service depends significantly on the personnel deployed.
• Better remuneration canimprove staff retention, motivation and qualifications.

Therefore, higher remuneration of the personnel deployed can promote thequality, continuity and availability of the service.

Equal treatment and competition

The Court also points out that award criteriamust not have a discriminatory effect.

In particular, they must not result in certain undertakings – such as SMEs –being systematically disadvantaged. Whether such an effect exists must be examined on a case-by-case basis according to market conditions.

Thus, the concrete application of the criterion remains subject to judicial review.

No infringement of collective bargaining autonomy

Finally, the EuGH examined whether the award criterion infringed theright to collective bargaining pursuant to Art. 28 of the EU Charter of Fundamental Rights.

The Court denied this. The criterion does not oblige the social partners to a particular outcome, but rathermerely promotes dialogue between employers and employee representatives. Collective bargaining autonomy is preserved.

Significance of the judgment for public procurement practice

The judgment confirms an increasingly important development in European public procurement law:quality and social aspects may play a central role in the award decision, particularly in personnel-intensive services.

At the same time, the EuGH clarifies that such criteria are only permissible if they

• are linked to the subject matter of the contract,
• are designed transparently,
• are objectively verifiable and
• are not discriminatory.

Particularly in the case of social services, theworking conditions of the personnel deployed can be a legitimate instrument for ensuring service quality.

Recommendation for public contracting authorities and bidders

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