A true European idea

In September 2020, the parliament of Georgia approved amendments to the labor code. At its core, the bill served to refine and improve labor rights protection standards. One of the legislative package initiators, former MP Dimitri Tskitishvili, explains the challenges in modern labor relations and labor culture and discusses the fundamental changes updated legislation will bring.

How healthy is the business environment in Georgia, both for the employee and the employer?

I do not have a radical answer to this question. There are some cases of healthy relations between businesses and employees. However, there are absolutely cases of the opposite, in which these relations are similar to those of the first phase of the industrial revolution, when the misuse of labor resources was maximized. In general, the existing norms at the legislative level did not push companies to improve their business environment, in terms of labor relations. Consequently, I think the legislative changes are crucial and, to some extent, even too late. Businesses must agree on certain systematic rules. Everyone must follow the basic standards. Gaining a competitive advantage at the expense of exploiting labor resources is neither morally nor economically justified and, in any case, harms the company.

How developed are labor relations at an institutional level? What achievements would you highlight? What shortcomings affect employees’ quality of life?

Modern labor is characterized by the harmonious relationship between the employee and the employer, as well as the mechanisms developed to avoid conflicts. Strikes and other cataclysms are not in anyone’s interest. In modern economics and business, human capital is the most important value, because in most cases, it is human capital that creates modern business. Consequently, if the legislation helps the employee and the employer establish a harmonious relationship, most problems will be solved automatically. Nor will active state intervention be needed. This will be a way to establish a culture of modern labor relations.

What is the main achievement of the renewed legislation? In what specific areas will these changes improve labor culture?

Discrimination is often invisible. Consequently, enhanced mechanisms to combat discrimination are a meaningful achievement as they broadly formulate the notion of discrimination. In terms of regulating working hours, certain standards have emerged – for example, the concept of leisure, which until now was classified as a “break.”

One of the main components is labor relations, the cooperation between the employee and the employer – consultation processes, which will uniquely determine the structure of a healthy labor relationship. The employer will have an obligation to listen to the employee and elect an employee representative. In case of a conflict, the employee will know what strategy the company has and develop their requirements based on that strategy. An agreement will be set up between the employee and the employer. A solution will be found with the involvement of both parties. This method has been tested in Europe. In Germany, for example, every large company has an employee representative on its board of directors. This component is vivid in our law, and I think its implementation will help us avoid controversies that are no good for the employee, the company, and the country.

The internship mechanism is no less important. Interns will be granted all labor rights that may qualitatively and substantively apply to them. The company will be required to draw up a written agreement to determine what activities the intern is needed for, to avoid confusion in terms of job responsibility, and not to use the intern as a freelancer. It will be forbidden to use an intern in a position where the company has paid staff.

For this law not to remain merely a law and to be actually enforceable, we have clearly described sanctioning mechanisms and a flexible system. These will apply to the public sector as well. There will be institutional mechanisms for enforcement control inspections, that are very strong in terms of mandate and rights, but not large in numbers. Approximately 100-150 people will be identified. They will have the right to inspect any company at any time. Companies must be ready for monitoring at any time, and should not only prepare for a planned inspection. The main point of a preventive labor inspection tool is its strength, independence, and element of surprise.

As we know, the work on this project took a year and a half. International organizations were also involved in the process. What specific mechanisms does this legislation ensure in adapting Georgian labor law to European legislation and international labor standards?

There are key issues we need to address that stem from the DCFTA Agreement in terms of the commitments that Georgia has made. There are European directives regarding these obligations, which offer basic frameworks on the standards that need to be set. In some respects, we have already gotten close to setting these standards, and in other respects, we are lagging behind. One such issue is overtime. I cannot say that we have fully complied with the EU’s directive in this regard.

According to this directive, there should be an upper limit on the number of hours a person works per week. By standard, this is 48 hours, 40 + 8 hours (overtime.) At this stage, it is impossible to determine this in Georgia, as it is difficult to get business support on this issue. It is also difficult to get support from an employee, who works much more than 48 hours, to earn a living wage.

The Association Agreement helps us create a legal framework, not exactly in line with the EU standard, but in line with the Association Agreement Standard. This is the way to the European legal system.

I should also mention the current trade structure with the US, the system of generalized preferences, and the precondition of free trade, which also requires establishing certain labor rights and standards. We had intense communications with US structures to bring our legislation in line with their standards.

One of the main actors that both the US and the EU rely on is the International Labor Organization and its recommendations. International and local experts of this organization were fully involved in the work on legislative processes.

What additional problems did the pandemic cause? Is the severity of these problems identifiable? What can human rights defenders and business organizations, and government agencies, do to alleviate labor problems caused by the pandemic crisis?

The first socio-economic effect of the pandemic is a sharp rise in unemployment. Many sectors in Georgia have been affected, especially tourism and services.

The Labor Code is not the answer to this challenge; however, the tendency to violate labor rights is growing, especially when unemployment is rising. Therefore, having a more targeted state policy regarding protecting employees’ rights in the event of increased unemployment is imperative.

Businesses and the state must have a vision of creating jobs and diversifying economic sectors in times of crisis. It turns out that putting an emphasis on tourism alone, puts us at a greater economic risk. In some cases, the state should subsidize job creation, not unemployment; this is a more reasonable and economically justified step. In this case, the right policy and market-oriented employment policy will help us overcome economic problems. The legislation will help us protect those employees who have retained their jobs in times of crisis. 

The duty of the state is to create decent jobs. The purpose of the state is the adherence to the aforementioned standards. This is not an ultra-leftist approach, it is simply, a true European idea.