Posted: 7 months ago

Changes to Labor Code

In his interview with the BusinessPartner TV Program, Shalva Tskhakaia, head of the legal committee of the Employers Association has talked about coming amendments to the Labor Code.

As is commonly known, this bill has caused controversy over the past 2 months. The bill proposed by MP Dimitri Tskitishvili was criticized by the Business Ombudsman’s Office and some analysts, too. 

Businesspersons and field experts with critical positions assert that the bill in its current form risks promoting the shadow sector of the labor market and damaging the employers interest too. The bill’s authors offers the business sector the ability to submit specific remarks. 

Over the past 15-20 years, the business environment was shaped by two radically different positions. The business sector remembers a period characterized by full deregulations and it did not like that time. Today, we have a situation where the authorities want to make the labor market in Georgia one of the more regulated in the region. The most difficult aspect for the business sector is that the regulations do not reflect long-term interests, Tskhakaia said. 

According to a statement by the legal committee of the Employers’ Association, it is not reasonable to impose so many regulations on the business sector in such a short period. 

Tskhakaia pointed out that the part of regulations that deal with the bill under dispute is stricter than is needed, assumed under the Georgia-EU association agreement. Therefore, initiated changes must be examined and harmonized with EU instructions, Tskhakaia said. 

“First of all, I believe that we should comprehensively explore the issue, and determine what will result from this bill. For example, the bill talks about a minimum wage. This bill does not determine a minimum wage, but introduces an obligation for the government to determine the size of a minimum wage. In general, what does this obligation mean for the budget and specific business? What results will we have at public or private sectors and how much will the budget expenditures increase? Moreover, will the budget balloon under these regulations, leading to job losses and increase unemployment rate? Some organization should prepare and submit  a similar report to know what effects these regulations will have. Secondly, we should work to harmonize regulations to the EU instructions as part of the association agreement. Nobody will object to this process. If we reduce all these issues to a minimum, this will be the only road to introduce additional regulations, stage by stage”, Tskhakaia said. 

The introduction of regulations, without their examination, may lead to the  necessity of their revision, again, and similar unforeseeable risks complicate the business process, he said. 

“The business sector remembers a time of near-full deregulations, and the sector was not content with the situation. Today, we have a situation, where the government plans to make the Georgian labor market one of the most regulated in the region. Over the past 15-20 years, two radically different positions have emerged. Who needs this? We know that in the future, a new government will come and try to change the situation. And this is the most problematic and serious moment for the business sector, when regulations are not foreseeable”Tskhakaia said. 

The Employers Association has consulted with a related bill from the very beginning, and it will not withdraw from the process, Tskhakaia said. 

“We will never turn back on this process. On the contrary, we have very strong arguments. We want them to listen to us, on the one hand, and we back some aspects of this document, on the other hand. For example, everybody agrees on changes to the  maternity leave policies”, Tskhakaia noted.