The Georgian Parliament passes a historic labor law reform package

Georgia has steadily risen in the rankings of the World Bank's Ease of Doing Business Index, reaching 7th place in 2020, up 93 places from 2006. This position was achieved as a result of a program of privatization and liberalization of the economy as well as strengthening of politics and social stability and overcoming corruption. However, this came at the expense of protecting workers' rights.

In 2006, the then government of Georgia adopted a new labor law based on the assumption that deregulation of labor law would automatically attract investment and create jobs. In addition to abolishing existing laws governing collective bargaining, labor disputes, and conditions of employment, the Code also dissolved the Labor Inspectorate and the Employment Agency and dissolved the Georgia Labor Administration. As a result of this and the economic policy of labor market deregulation, virtually all protection of workers' rights was eliminated.

The current government, elected in 2012 and 2016, has committed to the gradual restoration of labor market institutions and has taken a number of encouraging steps in this regard, including legislative reform and steps to restore a labor inspectorate. However, in early 2019, it was Parliament that gave a decisive impetus to promoting a better balance between the rights and interests of workers and employers by implementing comprehensive reforms of the Labor Code and the development of a law on labor inspection services.

Between May 2019 and September 2020, the ILO provided comprehensive support to the development of the reform package by providing comparative legislative information, drafting amendments, organizing consultations with the government, social partners and other stakeholders, and participating in parliamentary hearings. The main aim of the reform was to improve the compliance of Georgia's labor laws with relevant ILO Conventions and EU Directives within the framework of the EU-Georgia Association Agreement, to which Georgia is committed to harmonize its legislation.

Dimitri Tskitishvili, the main sponsor of the reforms, stated: “[w]While there are still legislative challenges, the scale of current reforms for Georgia is unprecedented. It addresses almost all of the key challenges that workers currently face in their workplace, and as a result of the reform we expect the establishment of a strong, independent and fully-fledged labor inspectorate as well as a fundamental improvement in the protection of workers' rights. This is an important step forward to avoid polarization between workers and employers and create a strong partnership for decent work and a healthy economic environment. I would like to thank the ILO for its indispensable support in the reform process, allowing us to make informed decisions taking into account international labor standards.”

The reform package, approved unopposed by Georgia's parliament on September 29, consists of a law on labor inspection services and extensive changes to the labor law, including provisions on discrimination and equal pay, restrictions on oral employment contracts and overtime. Night work, compulsory weekly rest period, part-time work, mass layoffs and transfer of undertakings. Crucially, the Labor Inspection Services Act extends the inspectorate's mandate to cover labor rights and conditions, whereas it was previously limited to issues of safety and health at work.

Tamila Barkalaia, the Deputy Minister of Internally Displaced Persons from the Occupied Territories, Labor, Health and Social Affairs of Georgia, emphasized the importance of implementing the reforms, noting that “…adequate protection of labor rights is of significant importance.” Government of Georgia. With the support of the ILO, the Georgian Parliament passed amendments to the Labor Code that noticeably increase the standard of human and labor rights in Georgia. We express our readiness and willingness to direct all our efforts to ensure the protection of labor rights in Georgia by establishing an effective and transparent enforcement mechanism together with our partner, the ILO.”

Lejo Sibbel, senior specialist in international labor standards and labor law at the ILO Office for Eastern Europe and Central Asia, welcomed the reforms, saying: “[t]The adoption of the reforms reflects the growing recognition in Georgia that economic development and respect for labor rights must go hand in hand to ensure that economic development occurs not for its own sake, but to improve the lives of all Georgians. Although gaps remain, the adoption of the Law on Labor Inspection Services and the amendments to the Labor Law represent a major step forward in bringing Georgia's labor legislation into line with relevant ILO international labor standards. We thank the sponsors of the reforms for their trust in the ILO and commend them for their persistence in implementing the reforms.”

The ILO's support for the reform process took place within the framework of the United States Department of Labor-funded project “Improving Compliance with Labor Laws in Georgia” and the Danish Government-funded project “Inclusive Labor Markets for Job Creation”. (Danida).