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Labor Code Amendments Passed with First Reading
Civil Georgia, Tbilisi / 20 Apr.'13 / 17:49

Parliament passed with 75 votes with its first reading on April 19 amendments to the labor code, which, the government says, aims at revamping existing “overly unfair” labor legislation.

Deputy Justice Minister, Alexander Baramidze, who presented the draft to lawmakers, said that amendments were a result of six-month long process, involving consultations with all the stakeholders from local trade unions, civil society organizations and business lobby groups to International Labour Organization.
“The goal was and is to secure reasonable balance in employer-employee relations,” he said. “The existing code, that we have now, disregards this balance completely; what we have now is actually non-labor code with employees having almost no rights and employers having all the rights; what we have now is abnormal and it was one of the pre-election campaign promises of the Georgian Dream coalition to amend this code.”

Lawmakers from the parliamentary minority group were absent during the discussions of the draft in the Parliament on April 19 as at the time they were at UNM’s outdoor rally in Tbilisi center.

Earlier this week American Chamber of Commerce (AmCham) in Georgia and International Chamber of Commerce (ICC) of Georgia released separate statements outlining those points of the proposed draft, which were source of their concern.

Some of those concerns, but not all of them, according to deputy justice minister, have been addressed in the revised draft.

One of those concerns was about obliging an employer to enter into a written contract for any labor relationship lasting more than three months. The business lobby groups were calling for allowing companies to make one-year term contracts, something that has not been shared by the authors of the draft.

The draft allows fixed-term contracts only in number of occasion, such as in case of fulfilling a concrete job; when hiring labor force for seasonal work or for replacement of temporarily absent employee; in case of temporary increase in workload. In other cases employers will be obliged to enter into unlimited term contracts.
The initial draft also had one clause according to which fixed-term contracts were also possible in case of “other objective circumstances.” In the revised draft, which was passed with its first reading, this wording has been amended in an apparent attempt to narrow down possible interpretation and it now reads: “other objective circumstances, which justify purpose of entering into fixed-term contract.”

Baramidze said that the draft was revised in respect of overtime work payments in order to address concerns of business lobby groups.

According to the draft, work performed by an employee for a duration that exceeds the weekly limit of 40 hours should be regarded as overtime work, which should be remunerated with a rate that exceeds rate of hourly base pay.

Business groups were calling for making this provision adjustable to those companies which require flexibility in number of hours worked per week; for example in specific types of jobs, the number of hours worked per week is more than 40 and the hours worked the next week may be much less than 40; some companies have a two week on/two week off schedule. AmCham Georgia was calling for making a legal for a company “to contract employees for more than 40 hours a week based on mutual agreement and governed by the requirements for equivalent rest time.”

Deputy Justice Minister Alexander Baramidze said that a new provision was added to this clause on overtime work, according to which if company’s operation requires shift work, employer and employee have the right to enter into a contract on shift work on the condition of providing an employee “adequate rest time.”
“I hope business representatives will appreciate adequately our acceptance of their demand” over this issue, Baramidze said.

AmCham also expressed concern that the draft code was not allowing companies to include a mutually agreed provision in their employment contracts which would prohibit employees’ to use confidential knowledge and information gained during the job for a defined period after leaving it, and providing sensitive information to competitors.

Baramidze said that to address this concern a provision was added to the draft according to which an employee will have no right to move to a new job in a competitor company for six months after terminating a contract with its previous employer on the condition that the latter would continue paying salary to its former employee for the six-month restriction period.

The draft lists more than dozen of circumstances which can become a reason for termination of contract; but the list no longer includes a clause, which is now in the existing labor code and which actually gives an employer right to sack an employee without any stated reason.

Among the reasons listed in the draft that may become a ground for termination of a contract are: “economic circumstances, technological or organizational changes that cause reduction of workforce that is necessary for operations”; lack of employee’s qualifications or skills with the position held and gross violation of obligations. as well as “other objective circumstances that justify termination of employment contract”; in the initial draft wording of this latter provision was simply “other objective circumstances.”

Among other amendments are provisions to prevent discrimination of any kind, to strengthen the mechanism allowing workers to gather information about job conditions and strengthening laws on child labor and employees’ safety.

The U.S. Department of States annual human rights country report on Georgia, released on April 19 and covering 2012, says that the government “interfered with workers’ fundamental freedom of association in several areas, including arbitrary dismissals, interference with collection of dues, and harassment and intimidation of labor activists, largely before the October elections.”

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