As Georgia strives to recover from the global economic crisis, the government is struggling to find a balancing point between the protection of workers' rights and the need for employers to boost output. President Mikheil Saakashvili's administration is hearing it from both sides. Labor union leaders claim that the government's overriding interest in attracting foreign investment is encouraging businesses to trample on workers' rights. Employers, meanwhile, are worried that potential changes to the labor code could turn off outside investors.
Georgia replaced its Soviet-era labor code with a new legislative framework in 2006. Minister of Labor, Health and Social Affairs Aleksandre Kvitashvili has described the existing code as "modern" and "close to [the] Danish - a liberal approach." But representatives of the Georgian Trade Unions Confederation (GTUC) contend that the ongoing economic crisis has exposed flaws in the system.
Union leaders take particular issue with two articles in the code (Articles 37 and 38), which allow for dissolution of employee contracts without cause. The statutes also require employers to pay only one month's severance pay to a laid-off worker. With some estimates of Georgian unemployment running well over 30 percent (official rates reach 13.3 percent), Articles 37 and 38 have become a wellspring of economic anxiety for workers, GTUC representatives say.
"The right to bargain collectively and organize is written into the law, but what does this mean when employers can fire people without a reason?" argued GTUC Vice-President Gocha Aleksandria.
Georgian companies have used the two articles to block unionization, Aleksandria claimed. In 2008, nine employees at BTM Textile, a subsidiary of a leading Turkish textile firm, were fired after holding a union-related meeting, according to union representatives. The year before, the company fired 11 people who agitated for the right to collectively bargain a contract. The dismissals were challenged in court, but upheld. Overall, BTM Textile has about 600 employees, according to the company's website.
Knowledge of such dismissals makes Georgian employees reluctant to contact unions for help in disputes with management, added GUTC President Irakli Petriashvili.
Employees at Gzamsheni II, a Tbilisi road construction company, took nearly a year to ask for help in their effort to secure 11 months of back wages from the company, Petriashvili asserted. "They were afraid," he said. One Tbilisi city garbage department employee, who spoke on condition of anonymity, told EurasiaNet that he has been working seven-day weeks for months and would be fired if he complained.
Kvitashvili, the minister of labor, countered that worker welfare problems lie not with the labor code, but with the fact that workers do not understand their rights. It's a problem that can be considered a legacy of Communism, he claimed. The government is conducting a public information campaign to make sure employees understand relevant labor code provisions, Kvitashvili added. "The more people know, the better protected they will be," he said.
The government has been in talks with unions and employer associations about various union complaints and "hope[s] that in a few months we'll have our own non-partisan mediator to deal with labor disputes before they hit the courts," Kvitashvili said.
Meanwhile, the GTUC, which claims a membership of over 259,000, is trying to diversify its pressure tactics. Confederation leaders hope to use the European Union's Generalized System of Preferences (GSP+) to push the government to amend the labor code. Specifically, the confederation wants to implement a new requirement that would enable employers to fire workers only with a viable cause.
The GSP+ provides for tariff reductions on Georgian exports to the EU so long as Georgia enacts "core human and labor rights, good governance and environmental conventions." The EU currently accounts for 22 percent of Georgia's exports, according to the Georgian National Investment Agency. Kvitashvili insisted that Georgia is in no danger of losing its GSP+ status and is following recommendations by the International Labor Organization, of which Georgia is a member.
At present Georgian labor unions appear to be making significant inroads in utility and public transportation companies. Tbilisi's electricity distributor, Telasi, has significant union representation, as does Tbilisi Water, Batumi Water and the Tbilisi Metro, which agreed to a union in 2008 after a brief hunger strike by workers.
Business associations are steadfastly opposed to tinkering with the labor code. The main stated concern is that changing provisions could risk scaring investors away from Georgia, thus hindering efforts to revive economic growth. Hard hit by the global economic downturn and the 2008 war with Russia, Georgia registered an 11.6 percent decrease in its Gross Domestic Product (8.1 billion lari or about $4.8 billion) for the first six months of 2009.
Some leading employers are open to exploring changes down the road, but not under current conditions. While the GTUC has "a point" that Georgia's labor code is "weak," commented American Chamber of Commerce President David Lee, "this is a bad time to change it."
"The overriding problem is unemployment," continued Lee, who heads the cellular communications company Magticom. "We all need to work together to get investment first, then discuss the labor law."
Zviad Kvlividze, executive director of the Business Association of Georgia, which has 40 members, is more adamant in his opposition to labor-law reform. The GTUC's demands unfairly favor workers' rights and are "socialist," he claimed.
Citing high demand for skilled labor in Georgia, Lee suggested that market forces would help protect workers' rights. But one labor law specialist, Ketevan Jeladze, countered that market forces alone could not ensure justice on labor issues. It's faulty logic to assume that businesses will operate responsibly toward workers, she said.
Paul Rimple is a freelance reporter based in Tbilisi.
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