Decision of the Supreme Court, June 1, 2023, (Roj: STS 2758/2023 – ECLI:ES:TS:2023:2758), Spain
Article(s) in Directive 2014/24/EU: Art. 20
Topic: special employment centres; participation in public procurement procedures for ‘reserved contracts’; not-for-profit or entrepreneurial in nature
Member State: ES
Court/rev. board: Supreme Court
1. IMPLEMENTATION / RELEVANT NATIONAL LEGISLATION
Transposition of the rules for the reserved contracts in Art. 20 of Directive 2014/24/EU is in art. 43 of the General Law on the Rights of Persons with Disabilities and their Social Inclusion.
2. FACTS
An economic operator requests the recognition of its non-profit status by the Galician Register of Special Employment Centres.
This application is rejected by the Galician administration, because the economic operator is a stock company and, according to the Galician legislation of 2005, it does not meet the requirement of being a non-profit entity.
Subsequently, the High Court of Justice of Galicia confirmed the decision of the Galician administration.
The economic operator whose non-profit status was rejected lodged an appeal in cassation with the Supreme Court, which was joined by the National Confederation of Employment Centres (CONACEE).
3. JUDGMENT
The Supreme Court recalls that, in addition to the Galician legislation (social assistance), the Spanish State has passed a national law that establishes a definition of what is to be understood as a “special employment centre”. This law was passed under the exclusive competence of the State to regulate the basic conditions that guarantee the equality of all Spaniards in the exercise of their rights and the fulfilment of their constitutional duties, in accordance with Article 149 of the Spanish Constitution.
This definition, contained in art. 43 of the General Law on the Rights of Persons with Disabilities and their Social Inclusion, was incorporated by Law 9/2017, of 8 November, on Public Sector Contracts, which transposed, into Spanish law, the Directives of the European Parliament and of the Council 2014/23/EU and 2014/24/EU of 26 February 2014.
The Supreme Court states that, in transposing the European Procurement Directives into Spanish law, and in what is of interest here, Art. 20 Directive 2014/24 included a new definition of Special Employment Centres of Social Initiative, according to which: “(s)pecial Employment Centres of social initiative shall be considered to be those which, complying with the requirements established in sections 1 and 2 of this article are promoted and owned by more than 50 per cent, directly or indirectly, by one or more public or private more than 50 per cent, directly or indirectly, by one or more entities, whether public or private, which are non-profit-making or have their social nature recognized in their Articles of Association, whether they are associations, foundations, public law corporations, social initiative cooperatives or other entities of the social economy, as well as those whose ownership corresponds to commercial companies in which the majority of their share capital is owned by any of the above-mentioned entities, whether directly or directly or indirectly…”.
This definition, according to the Supreme Court, means that the basic characteristics of business-initiated Special Employment Centres can be adjusted to the provisions of section 2 of Article 43 of the Consolidated Text of the General Law on Disabled Persons.
The appellant is a stock company, which falls within the scope of Article 43(2) of the Consolidated Text of the General Law on Persons with Disabilities, making it possible to be considered a “social initiative” centre and, as such, access to the reservation of contracts referred to in Article 20 of Directive 24/2014.
The Supreme Court also mentions the Judgment of the CJEU of 6 October 2021, C-598/2019, regarding a question – referred for a preliminary ruling by the Higher Court of Justice of the Basque Country – about the Spanish regulation of the Special Education Centres and its compatibility with Article 20 of the Directive 2014/24/EU (CONACEE).
According to this case law and the above-mentioned regulation, the Supreme Court considers that the definition of the state law should prevail and, therefore, gives rise to the appeal, interpreting that the economic operator is entitled to be registered in the Galician Register of Special Employment Centres.
Link to the original decision: https://www.poderjudicial.es/search/AN/openDocument/75c2034dc666bebba0a8778d75e36f0d/20230630
