A Disputable Labor Code

The bill of amendments to the Labor Code aims to restore the lost balance between employees and employers, and pull Georgian business and the economy toward modern standards, the author of the bill, Dimitri Tskitishvili told the BusinessPartner TV Program. 

The balance in labor relations was violated in 2006, when, under the pretext of labor market deregulation, the Labor Inspection was abolished, and employers were left to control the whole process. Consequently, the bill of amendments to the Labor Code aims to restore the lost balance, he noted. 

“The abolition of Labor Inspection disrupted the balance and the labor market was entirely deregulated. This was an unprecedented decision in, not only Georgia, but worldwide. Our system became one of the most deregulated systems in the world. As a result, employers lost all legal guarantees in legislation, and the balance was shifted on behalf of employers”, Dimitri Tskitishvili said. 

Market liberalization has not brought any efficient results in terms of either investments or employment, as predicted initially. On the contrary, according to the statistics, in 2007-2008 unemployment rose to 15%. As for investments, the inflow increased in certain segments, but no breakthrough was recorded. In turn, the number of work accidents has increased dramatically, he said. 

“Market deregulation has not brought a real breakthrough, while labor rights and labor safety deteriorated, and the number of work accidents rose significantly, and, finally we have a dramatic situation. Now, this bill is meant to restore the balance, and move  Georgian business and the economy to a new level of development, to which Georgia has been aspiring. The European Union is not only a geopolitical option. It is the choice of our society to follow regulations that bring welfare, appreciate the job of each person”, Dimitri Tskitishvili said. 

In response to the question of whether the planned changes may increase shadowy employment and surge prices, because the business sector will have to compensate with increased costs through prices, Tskitishvili noted that these amendments are only meant to improve working conditions, because the existing legislation gives a competitive advantage to a dishonest business, on the one hand, and legalizes slave labor, on the other hand. 

“These amendments are not intended to either increase or decrease the unemployment rate. They are to ensure the creation of worthy jobs and improve working conditions. Regretfully, the legislation allows dishonest bodies to maintain advantages over the honest organizations, because if the dishonest business saves money on staff development, human capital development, ensuring safe and respectful working conditions, while the honest business takes similar costs anyway, the dishonest actors may obtain a competitive advantage. These amendments are to prevent dishonest actors from legalizing slave labor. I am making a very strict statement, but the current legislation allows us to legalize slave labor”, Dimitri Tskitishvili told BusinessPartner.