fes_social dialogue in georgia_eng

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MARINA MUSKHELISHVILI

Social Dialogue

in Georgia


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The Publication is funded by the European Union and implemented by the Friedrich-Ebert-Stiftung.

The opinions expressed are not necessarily those of the EU and the Friedrich-Ebert-Stiftung.

The author is solely responsible for the content of the publication.

Copyright 2011, European Union and Friedrich-Ebert-Stiftung

ISBN 978-9941-0-4116-7

Tbilisi 2011


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SocialDialogue inGeorgiaMARINA MUSKHELISHVILI

1. Brief overview

2. Social Dialogue - Issues, Agenda and Dynamics2.1 The Concept of Social Dialogue2.2. Georgias Political and Economic Context

2.3. Legal Environment

2.4. Trade Unions and International Institutions

2.5. Social Dialogue: Dynamics of Recent Years

2.5.1. At the National Level

2.5.2. At the Sec toral and Company Level

3. Parties involved in the Social Dialogue3.1. Trade Unions GTUC

3.1.1. Functional Transformation

3.1.2. Organizational Structure and Finances

3.1.3. Action Strategy and Tactics

3.1.4. Trade Unions and Political Parties

3.2. Business Associations

3.2.1. The Georgian Employers Association

3.2.2. Business Association of Georgia

3.2.3. American Chamber of Commerce in Georgia

3.2.4. Business and Social Dialogue in General

3.3. State/Government

4. Individual Sectors and Cases4.1. Educators and Scientists Free

4.2. Trade Union of Railway Workers of Georgia

4.3. Metallurgical, Mining and Chemical Industry Workers

4.4. Poti Port

4.5. Khelvachauri, BTM Textile4.6. Communications: Silknet and Post of Georgia

5. Summary and Conclusions

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1.Brief overviewThe study o Social Dialogue in Georgia, presented in this research paper, describes and analyses develop-

ments that are linked to the policy o institutionalization o Social Dialogue in Georgia. It aims to analyse

the existing experience and to oster urther development in the regard o Social Dialogue. The study

is conducted or the practitioners, involved in a process o dialogue, as well as or the broader auditory,

interested in a transormation o labour relations i n Georgia.

Institutionalization o Social Dialogue in Georgia is one o the most important components within the

countrys policy o convergence with the EU standards. Social Dialogue is, in its essence, based on values

that have played a crucial role in orming modern democratic Europe. Social Dialogue, in a broader sense,

is based on that model o pluralism, which has produced European-styled representation, parliamenta-

rism and civil society. With these institutions it provides or a non-antagonistic coexistence and sustain-

able development o diverse interests.

From this perspective, promotion o Social Dialogue is regarded as an element o Georgias European

integration policy. However, the need or it has arisen rom a real conict. In 2006, a New Labour Code

has been adopted, which, according to the International Labour Organization (ILO), does not comply

with internationally recognized labour principles and internati onal Conventions ratied by Georgia. The

new Code was aimed at creating a business-riendly environment in Georgia. The code has been sharply

criticized by Trade Unions, civil society and international organizations or doing this at the expense o an

adequate protection o workers rights. Moreover, it restricted the Trade Unions potential or protecting

these rights, thereby invoking protest rom Georgian Trade Union Conederation (GTUC).

This character o the Georgian Labour Code is only a par t o a government policy prevailing in all direc-

tions since the Rose Revolution. In order to stimulate economic development the Government is clearing

the road or oreign capital investment by applying a whole complex o measures aimed at creating an

investment-riendly climate, including the establishment o a exible labour market and cheap labour.

Despite a proclaimed course o European integration the authorities are pursuing an active policy o de-

regulation, which heads into a quite dierent direction rom the European-styled regulated economy.

By the time when the new Labour Code was adopted reorms had started in the Georgian Trade Unions as

well, initiated by leaders who advocated a new approach in the unctioning o the Trade Unions. Against

the background o the extreme tension between employers and employees resulting rom a practice

o deregulation and a policy o exible labour relations, the Trade Unions had no choice but to switch

to a pro-active working mode and afrm their autonomous position by opposing Governments labour

policy.

Thereby the initiation o Social Dialogue, which resulted in establishing a Tripartite Commission in 2009,

is not an articial, prescriptive institutional innovation dictated by the wish to imitate Europe. On the

contrary, it is a complex mixture o diverse v ital interests and strategies. Having evolved in an extremely

antagonistic environment o Georgias political climate, it hides, beneath a surace o declared dialogue

approach, an explosive conrontation that is as yet ar rom reaching any orm o compromise.

By the end o 2011, the Tripartite Commission has been working on a regular basis or almost two years.

Nevertheless, it is still too early to speak o any sustainable institutional progress. Much remains to be

done or establishing Dialogue as a means or approaching problems in labour relations.

The eorts o the EU, the ILO, and other international actors, to establish international labour standards

and ensure adequate protection o workers rights in Georgia do not remain unnoticed by the Georgian

authorities. Consequently, it seems likely that the process called Social Dialogue will be kept continuing,

albeit without signicant changes i n the existing balance o powers. However, as long as Social Dialogue

exists only at the expense o maintaining the balance o powers the sustainability o its institutionaliza-

tion and the real benet it might bring remain questionable. Even small progress indicating a possibility

o bringing closer the positions o the parties would be crucial to turn this process into reality.

The urther development o Social Dialogue has to be seen in a wider context o Georgias transormation.

I the policy o encouraging business would prevail over laying the oundations or democratic pluralism,

the development may become one-sided, thus delaying the prospects o Georgias European integration

or an indenite period o time.

To come closer to Europe Georgia has to share values o the European pluralism and to implement them

in practice. Labelling institutes, ideas and movements, associated with Trade Unions and labour protec-

tion as remnants o Soviet times and making this an excuse or hindering their development might lead

not towards Europe, but towards an oligopolic economy with high inequalities and nar row middle class.

Contrary to this, a true Social Dialogue might help to combat the worst Soviet letovers as it works against

radicalism in decision-making and abandons absolutist, one-sided approaches in policy-making prac-

tices.

The paper is structured in a ollowing way. Chapter 2 overviews the concept o Social Dialogue, the politi-

cal and legislative environment, against which it develops, actors and actors that have a major i nuence

on it; it describes the recent events and dynamics o the process and the progress that was reached as o

2011 year.

In Chapter 3 is given more detailed analyses o social partners, involved in the Dialogue: Trade Unions,

business associations and Government.

Chapter 4 provides more detailed inormation on specic cases, Sectoral unions and events. By h ighlight-

ing the most typical and/or pressing problems and patterns it aims to complete the picture o labour rela-

tions in Georgia, which was presented in a relatively condensed orm in previous chapters.

In the last chapter readers will nd an overview o ndings and the nal analyses, which aims at urther

ostering o the Social Dialogue.

The study was prepared by the request and with the support oFriedrich-Ebert-Stitung. It is based on the

ollowing sources: actual inormation gathering, documents analyses, and interviews with the represen-

tatives o Trade Unions, business associations, Government and international organizations, conducted

during March-July in Tbilisi, Georgia. The author would like to thank all respondents or the kind assis-

tance in the course o the study.


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2. Social Dialogue - Issues,Agenda and Dynamics

2.1. The concept of Social Dialogue

Social Dialogue is one o the oundations o the European Social Model.

The term Social Dialogue is used to describe a wide range o practical realities1. In some countries, espe-

cially in continental Europe, this dialogue is based on centuries-long experience and combines naturally

with other components o the political system. In other counties, it is still beginning to establish itsel and

plays a less important role.

Social Dialogue is dened by the International Labour Organization to include diverse processes and prac-

tices such as all types o negotiation, consultation or simply exchange o inormation between represen-

tatives o governments, employers and workers, on issues o common interest relating to economic and

social policy. 2

Social Dialogue plays a key role in achieving the ILOs objective o promoting opportunities or women

and men to obtain decent and productive work in conditions o reedom, equality, security and human

dignity. 3 The Strategy or achieving this goal is to regulate labour relations by seeking consensus between

the parties. This is what a Dialogue means: moving rom conrontation towards a mutually benecial co-

operation.

Social Dialogue can exist as a tripartite process, with the Government as an ofcial part to the dialogue or

it may consist o bipartite relations only between labour and management (or Trade Unions and employ-

ers organizations). In the latter case the Government may play only a minor role or be indirectly involved

in the process.

An agreement, reached among parties can be inormal or institutionalized, and oten it is a combination

o the two.

Social Dialogue can take place at the national, regional or enterprise level. It can be inter-proessional,Sectoral or a combination o all o these.

Inormation exchange is the simplest orm o Social Dialogue. The obligatory exchange o inormation

is a minimal way o cooperation enabling the parties to avoid being unprepared or possible develop-

ments. Starting with inormation exchange, the parties could then move on to a higher level o coopera-

tion, namely to consultations. In the process o consultations the parties not only exchange inormation,

but also try to understand each others attitudes towards the decisions they are planning to make.

Collective negotiations and agreements on strategic issues are still higher levels o cooperation. Collective

1 This paragraph is mainly based on the book: Junko Ishikawa. Key Features o National Social Dialogue: A Social Dialogue Resource

Book. Geneva, International Labour Ofce, 2003

2 Ibid, page 3.

3 Social Dialogue, ILO. http://www.ilo.org/public/english/dialogue/themes/sd.htm

negotiations usually concern wages and working conditions and may result in collective agreements i

successul.

Agreements on strategic issues are, as a rule, much more comprehensive. Their objective is to seek social

consensus on the essence o economic and social policies determining the countrys development. The

readiness or such a dialogue depends, primarily, on the Government. A successul strategic dialogue may

result in signing a social pact.

Sometimes a clear distinction is made between Social Dialogue and Bargaining since a dialogue is based

on the idea o partnership and implies the wish to detect common interests. In the process o a dialogue

the parties seek to reconcile their visions and reach a position in which it would be possible to reconcile

diverse social and economic interests. In other words, cooperation and competition coexist in the process

o problem solving among social partners; it is important, though, that the parties recognize the necessity

o partnership relations.

Apart rom the traditional par ties to Social Dialogue, such as the State, the Trade Unions and employers

organizations, other social groups may be involved in the process. For instance, NGOs, representatives

o small business, cooperatives, consumers associations, and armers associations, can also par ticipate. In

this case the Dialogue is reerred to as tripartite plus.

The content o the dialogue is closely related to who is involved in it. For example, Tripartite Plus dia-

logue is most likely to have a so-called broad agenda, i.e. to deal with issues like macroeconomic policy

and stimulating economic growth, structural economic reorms, regional economic integration, educa-

tion, social policy, taxes, etc.

Social Dialogue, hence, may be not restricted to regulating disputes arising between employers and work-

ers. Disputes o this kind could be the topic o bilateral negotiations, e.g. within the company. Tripartite

negotiations may go beyond the scope o labour relations and address a broader context o basic eco-

nomic issues. However, the involvement o other actors in the dialogue implies interest in securing a

model o economic development that would be benecial or dierent social groups, including those

that are relatively vulnerable.

Successul Social Dialogue in countries that are in the process o democratization depends directly on

the broader political context o creating a democratic environment. Democracy can be considered as a

precondition or Social Dialogue, as well as being partly a result o the latter. Social Dialogue implies de-

centralizing o governance and sharing the governance responsibility by society. Participation o this kind

is only possible within a ree society that gains inuence through ensuring representation and reedom

o association.

Successul Social Dialogue increases popular consent and adds legitimacy to political decisions. Successul

Social Dialogue ensures respecting the interests o all social groups and thereby alleviates social inequal-

ity and strengthens the resources or public participation in the democratic process.

Moreover, Social Partnership is an integral part o European integration and Europeanization o the coun-

try. Social Partnership is a traditional and essential element or European democracies. In countries like

Germany, Austria or the Netherlands Social Dialogue is a natural component o the political culture to a

degree that makes ormal provisions less important.


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2.2. Georgias Political and Economic Context

20 years ater gaining independence and starting reorms Georgia still can be hardly called an established

political and economic model. Political, economic and social institutions still are not nally established.

In some aspects Georgia resembles other post-soviet countries, though there are signicant dierences

as well; these distinctive eatures determine the special character o Social Dialogue issues i n the country.

The collapse o Georgian economy has been one o the most grievous throughout the post-soviet space,

and the political climate one o the most polarized and, at the same time, unstable.

Jon Elster once described the process o post-communist institutional reorms as rebuilding the ship

at sea4. Building an independent state, establishing a democratic political system and creating a neo-

liberal, globalized economy these are the most large-scale projects o this transition that determined

the agenda o the last twenty years.

This transition process can be divided into stages according to the major driving ideas and transition ten-

dencies. Till 2003 it was Democratization, which resulted in establishing a hybrid regime that provided

much more reedom to the population than it had been possible in Soviet times, but ailed to ensure ac-

countability o the Government to the people and public participation in the execution o governance.

Increasing popular dissatisaction with non-efcient governance resulted in a change o regime in 2003.

President Shevardnadze resigned and Saakashvili came to power.

Ater the Rose Revolution o 2003 the new government declared a policy o convergence with Europe to

be its main priority. The European ag was erected on state buildings side by side with the Georgian state

ag. Although very soon the NATO integration policy became more dominant than European aspirations,

still the course o European convergence and creating closer ties with the European Union was continued.

In 2006, Georgia and the EU signed an agreement within the European Neighbourhood Policy. In ac-

cordance with this agreement, Georgia undertook the obligation to achieve progress in various spheres,

including the regulation o labour relations. Despite the controversies and drawbacks, Europe, along with

the USA, remains a geopolitical partner o crucial importance or the country s uture.

In many aspects, however, the abovementioned strategic orientation appeared to be declarative, rather

than substantial. Such values as pluralism, dialogue with opponents, and public participation came in

contradiction with the reormist stances o the post-revolutionary government. This contradiction caused

increasing problems with media reedom, judicial independence, electoral process, etc.5 The gap between

the authorities and the society widened gradually, and the arising tensions ound no reconciliation within

the existing institutions. Massive protests in 2007 resulted in a political crisis, which deepened in theatermath o the 2008 August war. The opposition accused the Government in a systematic violation o

civil rights and liberties and abuse o power. The atmosphere o mistrust instead o dialogue brought on

a deep polarization in Georgian society. It is clear that the transition rom this polarized situation to Social

Dialogue must go beyond the scope o mere regulation o labour relations and poses a serious challenge

or those actors who are willing to cooperate.

Meanwhile, poverty and unemployment have established themselves as the most prominent social prob-

4Elster, Jon, Claus Oe and Ulrich K Preuss. 1998. Institutional Design in Post-communist Societies: Rebuilding the Ship at Sea.Cambridge: Cambridge University Press. p p.26-27.

5 For more details on post-revolutionary dynamics o democracy development, see Nations in Transit 2011, http://www.reedomhouse.org/template.cm?page=678http://www.reedomhouse.org/template.cm?page=678 and M.Muskhelishvili,

G.Jorjoliani. 2009. Georgia's ongoing struggle or a better uture continued: democracy promotion through civil society development,

Democratization.Volume 16, Issue 4. pp. 682 - 708.

lem o the society and the subject o daily concern or a vast majority o the population. 6 The economy,

having collapsed at the very beginning o the transition, is in need o investments in order to create

jobs. Deindustrialization caused a dramatic increase o unemployment rates in a country where, ormerly,

unemployment virtually did not exist. A great part o the population lost their jobs due to closing down

enterprises or sta reduction at their working place.7 Workers are under continuous threat o losing their

job in a situation where chances o employment are low. Sel-employment has increased pronouncedly.

At present, about 30% o workorces are wage labourers, more than a hal are sel-employed, and 16% are

unemployed.8

The high rate o sel-employment can be attributed to hidden unemployment, rather than to eectively

unctioning small entrepreneurship. A greater part o the sel-employed is made o individuals who earn

sustenance or their amilies by arming on a small piece o land. These individuals are considered to be

agricultural workers. At their expense the rate o agricultural labour has doubled since Soviet times rom

25% to more than 50%.9

It is also important to take into account the structural eatures o unemployment: new jobs oten requirequalications or which there is a shortage within the country. Some part o the population is tr ying to an-

swer this demand or retraining by inormal education while others ail to attain the necessary sk ills and

competences. The deregulated education system is unable to provide the labour market with proession-

als or which there is high demand, whereas, at the same time, there is an overow o university graduates

in those proessions, which are considered to be more prestigious (like oreign relations). In addition, the

principle o equal pay is not guaranteed: the wages or the same work conducted by equally qualied

individuals dier dramatically depending on the employer. The dierence between high and low salary

within the same organization is extremely high. Recruitment depends on personal relationships, rather

than on qualication. Complaints within the society ag ainst political discrimination during recruitment or

dismissal are widespread, increasing the politicization o the employment phenomenon.

All this makes employment a privilege, rather than a right. Within a polarized society the issue o labour

and employment also becomes a part o antagonistic relations.

Against a background o economic hardship, it was the capital that became the main and principal con-

cern o the governmental economic strategy ater the Rose Revolution. Attracting oreign direct invest-

ments (FDI) became a priority. In order to increase the countrys attractiveness to investors, reorms were

undertaken with the aim to raise Georgias rating by the World Banks Ease o Doing Business Index (EDBI).

Within just a ew years, Georgia made an impressive leap in this regard and secured a reputation o a

leading reormer state.10 Up till 2010, exibility o labour relations simpliying recruitment and dismissal

procedures was one o the components required or increasing the EDBI index. Accordingly, the ultra-

liberal Labour Code adopted by the parliament in 2006 should be regarded as a part o a strategy aimed

at attracting direct investments.

6 In all surveys conducted since 1995 these problems are reported, in one or another ormulation, as the most serious concerns o

individuals. See, as an example, surveys on http://www.iri.org/explore-our-resources/public-opinion-research/public-opinion-

polls.

7The level o wage employment is at present 3 times lower than in the 1980-ies. c. Soso Archvadze Current demographicsituation in Georgia as a victim o political and economic circumstances. (in Georgian) http://european.ge/?id=215

8By 2010; National Statistics Ofce o Georgia, http://www.geostat.ge/?action=page&p_id=145&lang=geo

9 Cordonnier, Christophe. 2010. EU Export Market Conditions or the Realisation o the Competitive Advantages o Georgian

Agricultural Products.Tbilisi, GEPLAC. 19 p. http://www.geplac.ge/eng/Reports.php.

10During the last 5 years (2006-2010) Georgia is at place 1 by the World Banks Ease o Doing Business Index, c. Doing Business

2011: Making a Dierence or Entrepreneurs. WB, p. 5.


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Benchmarking (measuring against a universal standard) is a tool used by many countries attempting to

attract investments; however, in this regard, Georgia has demonstrated exceptional commitment to the

EDBI standards. This is clearly visible rom the act that, as opposed to most other countries, Georgias eco-

nomic climate ratings according to the EDBI index and the World Economic Forum Global Competitiveness

Index (GCI) are very dierent. This latter has not increased as a result o the 2005-2009 reorms (in 2009,

Georgia rated 90th o 133 countries).11 In 2010-2011 the GCI overall rating o Georgia ell even urther to

93rd place out o 139, within which labour market efciency rating comprises the highest (37th) and the

macroeconomic environment the lowest (130 th) component.12

Stressing the dierence between these two ratings is important to avoid the impression the reader might

get, that the undertaken reorms succeeded in establishing a new institutional environment, in which lib-

eral regulations are created or business, whereas superuous deregulation o labour relations is just a by-

product desirable or undesirable o establishing these regulations. In act, the macro institutional en-

vironment in Georgia continues to be an obstacle or business development. In this environment, issues

like the Supremacy o Law, independence o the judiciary, property protection, or air competition remain

problematic. Some businesses are closely linked to the Government and enjoy privileges provided by the

elite corruption, while some hide in a shadow economy in order to avoid ri sks. The high scale o shadow

economy in Georgia that aects not only labour relations, but also a greater part o economic activity

is evidence or the gravity o these risks.13 The abovementioned circumstances are a serious handicap

or the representation o the interests o the business sector; they weaken the potential o business as a

strong and autonomous party in the Social Dialogue.

Given that businesses, as well as the Trade Unions, are interested in the lobbying or better established

rules o the game, it would be possible to strengthen their partnership, instead o conrontation within

the ramework o a broad, rather than narrow Social Dialogue. However, opportunities o such broad dia-

logue are restricted because o the legislative environment, introduced by the Government. The course

o liberalization o economy and attraction o investments declared by the Government was legalized by

constitutional amendments and legislative acts in 2010-2011. The Liberty Act initiated by the President

in 2009 oresees stipulating the character o the countrys economic policy at the constitutional level.

Although the preamble to the constitution still reers to Georgia as a Social State, ater the constitutional

amendments o 2010 this statement looks more like a letover rom the 1995 constitution.

The constitutional amendments o 2010 th at were a par t o the Liberty Act in act contradict this de-

clared Social State principle. According to these amendments, introducing or increasing state taxes is only

possible by reerendum that can be initiated only by the Government. Taking into account that theres a

at rate o income tax in Georgia today and there is no separate social tax, any institutionalization o social

solidarity seems unlikely in the near uture.

The Organic Law on Economic Freedom adopted in June, 2011, is the second part o the Liberty Act.

According to this law, the consolidated budget may not exceed 30% o GDP, the budget decit may not

exceed 3% o GDP, and the total state debt may not exceed 60% o GDP. In his address to the Georgian

11Schueth, Sam. 2011. Assembling International Competitiveness: The Republic o Georgia, USAID, and the Doing Business Project.

ECONOMIC GEOGRAPHY, Vol. 87 No. 1 pp.51-77

12The Global Competitiveness Report 20102011. World Economic Forum 2010. Geneva.

13 According to some calculations, in 2007 the scale o shadow economy in Georgia was the highest in the world (more than

70%). c. Friedrich Schneider, Andreas Buehn and Claudio E. Montenegro. Shadow Economies All over the World: New Estimates or

162 Countries rom 1999 to 2007. Policy Research Working Paper 5356. The World Bank Development Research Group. Poverty and

Inequality Team & Europe and Central Asia Region Human Development Economics Unit. July 2010.

Parliament while presenting the Liberty Act at October 6, 2009, President Saakashvili clearly stated the

priorities o the countrys economic policy:

Our ambition must be to turn Georgia into a agship o worldwide liberal economic ideology and

thereby create a comparative advantage relative to other countries. This is the goal, the great mission

that the Liberty act serves.

Today, while waves o indistinct and disoriented socialist and populist ideas are ooding the world

shaken by global economic and fnancial crisis, it is even more important, even more possible, even

more imperative, to attain this goal.

We believe that, in the long term, a sustainable answer to economic crisis i s only more liberalism and

not state regulation o economy.

Georgia is a part o global economy and our eorts must be not to lock ourselves up in a shell, but to

open our economy and try to become more competitive on the global market.14

An economic policy o this kind, coupled with erosion o Democracy, arouses questions regarding the

sincerity o Georgias declared strategy o European integration. To say the very least, it makes it very

problematic to bring labour relations in Georgia in compliance with European Standards, as will become

evident rom the processes described in the subsequent chapters.

2.3. Legal Environment

The main documents providing a legal ramework or labour relations are the Georgian Constitution, rati-

ed international conventions, the Labour Code and the Law on Trade Unions.

Georgia has ratied the Freedom o Association and Protection o the Right to Organize Convention, 1948

(No. 87, ratied 1999) and the Right to Organize and Collective Bargaining Convention, 1949 (No. 98, rati-

ed 1993), as well as other Conventions on labour.

The ILOs Committee o Experts on the Application o Conventions and Recommendations (CEACR) yearly

assesses the compliance with international Conventions and related guidelines by dierent countries

including Georgia. Other international organizations rely on the ndings o this committee in their as-

sessment o labour regulating legislation.15 The ILO repeatedly recommended the Georgian Government

to amend the Labour Code and other legal acts in order to bring them in compliance with the 87 th and

98th Conventions.

In addition to these earlier obligations, ater the Rose Revolution Georgia signed the European Social

Charter, and (partly) ratied it in 2005. Moreover, reedom o labour is declared in the Georgian Constitution

which, at the same time, obligates the State to regard labour rom the human rights point o view: pro-

tection o labour rights, air wages and a secure, healthy working environment, working conditions or

juveniles and women are regulated by the Organic Law.16

14Mikheil Saakashvili, President o Georgia, presented an economic package to the Georgian Parliament. http://www.president.

gov.ge/ge/PressOfce/News/SpeechesAndStatements?p=2237&i=1

15 c., e.g., GEORGIA LABOR SECTOR ASSESSMENT. USAID, SEPTEMBER 2009, Conclusions 2010 (GEORGIA) and European S ocial

Charter (revised). Articles 2, 4, 5, 6, 26 and 29 o the Revised Charter. December 2010, European Committee o Social Rights.

Council o Europe.

16 Constitution o Georgia, article 30, paragraph 4. http://www.parliament.ge/index.php?lang_id=GEO&sec_id=69&kan_

det=det&kan_id=23


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The Law on Trade Unions, adopted 1997, has been let almost unchanged since then, while the Law on

Collective Contracts and Agreements and the Law on Collective Labour Disputes, adopted in the same

time were later (2006) repealed, leaving a blank in the legislation. The law declares the reedom to cre-

ate proessional unions and to join such unions. Trade Unions are also allowed within public institutions,

with a ew exceptions (law enorcement agencies). The employer is obliged to negotiate with the Trade

Unions on collective labour contracts (article 12(2)). It is also the obligation o the employer to inorm the

Trade Unions on expected sta reduction and/or worsening o labour conditions at least two months in

advance (article 11(2)).

According to the Georgian legislation, a Trade Union can be registered as an independent legal body at

the request o at least 100 members (article 2(9)). Trade Unions are entitled to orm primary Trade Unions

at the enterprises, institutions and other places o work. The latter have to ollow the Trade Union Charter

and their own statute. A primary Trade Union with at least 15 members is entitled to elect a Trade Union

organizer who will have representative authority or this organization.

By setting a minimum Trade Union membership requirement o 100 members, the law, to a certain ex-

tent, limits the right o the employees o smaller enterprises to unite in autonomous Trade Unions. In

enterprises with less than 100 employees, a Trade Union can only exist as a division o a larger association.

It cannot be registered as an independent legal body and sign independent collective contracts. Instead,

such contracts can be signed only by the parent organization.

A restriction on the minimum membership o Trade Unions limits the potential o autonomous action o

the workers and contributes to the cultivation o hierarchical relations in the Trade Unions, thereby hin-

dering the development o internal democracy. According to CEACR17, the minimum Trade Union mem-

bership requirement o 100 members is discriminating and should be lowered.

The main document regulating labour relations is the Labour Code, adopted in May 2006. Ever since,

this Code has been repeatedly criticized or substantially narrowing the rights o workers and proes-

sional associations, and or being adopted without reaching agreement with the Trade Unions. Moreover,

the Code contradicts the Conventions ratied by Georgia. Despite requests rom the GTUC, the ILO, the

European Union and other institutions, to amend certain articles o the Labour Code, no changes have

been made to its provisions up till now. More than that, by an amendment to the Constitution o Georgia,

adopted 2010; the existing Labour Code was raised in status rom an ordinar y law to an organic law. This

means that improving it will be even more difcult, since it will require the votes o more than a hal o the

listed members o parliament to make any amendments to it.

The most disputed articles o the Labour Code are articles 37(d) and 38(3). Article 37(d) states that termi-

nation o a labour contract i s grounds or discontinuance o the relationship between the employer and

the employee. Article 38(3) stipulates that, in case o termination o a labour contract by the employer, the

employee must be paid an indemnity no less than a monthly salary. Articles 37(d) and 38(3) thereby en-

able the employer to terminate a labour contract without prior notice, with or without reason. This gives

the employer unlimited rights to terminate labour contracts without any explanation.

Moreover, according to article 5(8), the employer is not obliged to name a reason or reusing to employ

a worker or or his/her dismissal. Accordingly, in case o a legal dispute, burden o proo rests on the em-

17 CEACR: Individual Observation concerning Freedom o Association and Protection o the Right to Organise Convention, 1948 (No.

87) Georgia (ratication: 1999) Published: 2010. http://www.ilo.org/ilolex/english/index.htm

ployee and not on the employer. All this makes it possible or the employer to dismiss workers or their

Trade Union, social, or political activity a practice that has become requent during the last ew years.18

According to the ILO experts, all these articles taken together create the possibility o discrimination and

restrict the workers capability to protect their rights collectively: The Committee thereore trusts that

the necessary measures to revise sections 5(8), 37(d) and 38(3) o the Labour Code will soon be taken so

as to ensure that the Labour Code provides or an adequate protection against anti-union discrimination

taking into account the principles above. It requests the Government to provide inormation on the mea-

sures taken or envisaged in this respect.19

As or proessional associations and collective contracts, the Code provides the possibility o signing col-

lective contracts without mentioning proessional associations as such and without speciying in suf-

cient detail any procedures or regulating collective contracts.

According to the Code, a collective contract is dened as a contract between the employer and any group

o workers with at least two members. The employer has no obligation to negotiate on collective con-

tracts even at the request o the Trade Unions.

Collective and individual contracts are th ereby treated equally. This can be a disadvantage or the Trade

Unions. The role o the Trade Unions in collective contracts is not stipulated; in act negotiations can be

undertaken by any representative.

Due to this interpretation o collective contracts, the Labour Code contradicts article 4 o the ILO

Convention No 98. Accordingly, the ILO requests either to amend the articles on collective contracts or to

regulate them by additional legislative acts.20

Due to the incompleteness o the legislation on collective contracts, the employers oten reuse to enter

collective negotiations or to renew previously existing collective contracts. Misunderstandings regarding

this issue are requent, adding even more complications.

According to article 25, paragraph 3 o the Georgian Law on Trade Unions, employers, i.e. the administra-

tions o the enterprises, institutions or other places o work, are obliged to deduct the Trade Union mem-

bership subscriptions rom the monthly salary o the employees, and to transer it to the Trade Unions

account in accordance with the provisions o the collective contract. Unilateral termination o collective

contracts oten results in neglecting this obligation by the employer. The incompleteness o legislation

makes it complicated to ght against this practice that is becoming more and more requent, especially in

recent years. Blocking membership subscriptions oten is used by the employers to undermine the Trade

Unions nancially.

The Code substantially restricts the workers ri ght to strike. Although guaranteed by article 49 o the

Labour Code, this right is subject to various restric tions stipulated in article 51. For instance, strike is illegal

i the workers have been orewarned on possible dismissal due to sta reduction. Strike also becomes

illegal i the labour contract is terminated during a legal strike. A strike has to be preceded by a warning

strike, whereupon, within 14 days, the parties shall participate in the amicable settlement procedures

pursuant to the Labour Code.21 However, the Labour Code does not provide or such a procedure. I no

agreement has been reached within 14 days, the other party is entitled to apply to court or arbitration.

18 For such examples see chapter 4.

19CEACR: Individual Observation concerning Right to O rganise and Collective Bargaining Convention, 1949 (No. 98) Georgia

(ratication: 1993) Published: 2010. http://www.ilo.org/ilolex/english/index.htm

20 Ibid

21 Labour code, article 49. http://www.parliament.ge/index.php?lang_id=GEO&sec_id=69&kan_det=det&kan_id=4566


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12 13

The ILO considers that the legislation should establish specic mediation mechanisms, involving an inde-

pendent third party, to acilitate dispute settlement between t he parties.

The right o a party to apply to court or arbitration i no agreement is reached eectively means a restric-

tion o the right to call a strike. Although it does not ully exclude the possibility o star ting a strike, con-

tinuing to strike will become illegal as soon as there is a court decision to that end which is compulsory

or all parties.

It is illegal to continue a strike or more than 90 calendar days (article 49(8)). Strikes are also prohib-

ited wherever they might cause damage to the public interests. The ILO considers that the right to strike

should not be restricted through limitation on the duration imposed by the legislation. As or the pro-

tection o public interests, rather than the prohibition o strike, the minimum services provision may be

demanded.

Apart rom purely legal reasons, there are other handicaps to labour right protection resulting rom the

practical deregulation o governance. The dissolution o the labour inspection created a va cuum rom the

point o view o controlling labour conditions. There is no recording o unemployment, and no unemploy-

ment benets. No ministry is in charge o elaborating or implementing labour policy, or collecting and

analyzing relevant statistical data. There are no specialized courts or mediation institutions or the trial o

labour disputes.

The abovementioned shortcomings o the legislation create an obstacle or the declared policy o

European integration. Basing on the European Council Monitoring Report22 on the implementation o

articles 2, 4, 5, 6, 26 and 29 O the European Social Charter, ratied by Georgia, the European Commission

considers the Code contradictory not only to the ILO conventions, but also to EU standards and the

European Social Charter. According to the report, ar ticle 2(1) o this charter is violated because, according

to the Labour Code, the employed can agree to a contract that sets no upper limit to the n umber o work-

ing hours. Contrary to ar ticle 4(2) o the Charter, the Code a llows or an agreement between the employer

and the employee with no limit set to overtime work; moreover, the Labour Code does not provide or

extra remuneration o overtime work or additional vacation in compensation or such. Article 4(4) also

does not comply with the Charter because the employer has the right to dismiss employees without prior

notice; moreover, during a probation period the Code does not oresee any kind o orewarning o work-

ers in case o dismissal. Article 5 o the Charter is also violated by the minimum Trade Union membership

requirement o too many members; a labour contract may contain a clause on non-membership o Trade

Unions, there is no adequate protection against discrimination o Trade Union members during recruit-

ment or dismissal; in disregard o article 6(2), the employer can unilaterally ignore collective contracts,

and there are no provisions supporting collective contracts.

22 http://www.coe.int/t/dghl/monitoring/socialcharter/Conclusions/State/Georgia2010_en.pd

2.4. Trade Unions and International Institutions

The GTUC and international institutions are those actors who actualised labour rights promotion and

Social Dialogue rst o all. The Business and the Government had to react on their pressure and thus are

ollowers, rather than initiators o the process. This chapter regards to the role o GTUC and international

institutions in labour rights promotion.23

Ater the Rose Revolution the institutional place and role o Trade Unions in social relations has signi-

cantly changed. Unlike many other post-soviet states Georgian Trade Unions started reorming and are

trying to redene their unction and operating principles and methods in order to achieve an adequate

place within market economy. As a result o this transormation, Georgia is the only post-soviet coun-

try where the Government has a pro-active policy with regard to Trade Unions; this policy, as Vakhtang

Lejava, Chie Advisor to the Prime Minister o Georgia, puts it, is aimed at separating the Trade Unions

rom the state: O all post-soviet countries, Georgia has undertaken the most radical reorms in labour

relations. On its own accord, without anybody orcing it to do so, the State tore the Trade Unions rom its

lap and told them to take care o themselves.24

The existence o powerul Trade Unions is important or a country in many regards. Firstly, workorce is

one o the main components o economy. Protected and decent work is a precondition or the successul

economic development o a country. The strengthening o Trade Unions is also one o the most impor-

tant elements o convergence with the EU and an indispensable component or the Europeanization o

Georgias economy and society. Powerul Trade Unions are also benecial or Georgian business. Having

a reliable partner on the other side makes it easier to conduct business. Trade Unions also acilitate the

implementation o government policy: shaping macroeconomic policy is more eective i an organiza-

tion representing the workers is involved in the process.

In Soviet times, the Trade Unions were a powerul organization. However, past traditions only partly help

them to react to the challenges they are acing at present. The Trade Unions are undergoing a complex

unctional transormation. Beore, their unction was merely a social one: rom the viewpoint o most o its

members, the distribution o sanatorium vouchers was the main activity o the Trade Unions. Today, the

Trade Unions have to become an equal partner in economic relations. Many o the issues ormerly regulated

by the State now are no longer within its area o responsibility. Equal and dignied participation o the workers

in economy cannot be guaranteed i these workers do not protect their own rights.

This unctional transormation is difcult both or the Trade Union leaders and or their rank-and-le

members. The members have to realize that the Trade Union is no longer organizing vacations and enter-

tainment. The benets they might now enjoy in exchange or paying their membership subscription are

those that were the guaranteed ones not so long ago. Moreover, just paying membership subscriptions

may not even sufce or getting these benets without personal involvement and active participation.

Passivity and distrust - the remaining o the previous period - may themselves be an obstacle or success.

The leaders, in their turn, have to revise out-dated bureaucratic methods o administration, meet the

people and seek new ways o communication with the State and the employers. All this implies that the

organization itsel has to change, starting with its structure up to the orms and methods o the services

it provides to its members.

The authorities and some representatives o the business sector also nd it difcult to understand these

unctional transormations. They, also, associate the Trade Unions only with the unctions they exercised

23 In more details the GTUC is described in a chapter 3.1., while the most important Sectoral Unions - in the chapter 4.

24 Interview with Vakhtang Lejava, Head o the Advisory Group (Service) or Governance and Economic Issues o the Prime

Minister o Georgia, Chie Advisor to the Prime Minister o Georgia.


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14 15

in Soviet times. From this out-dated point o view, they cannot appreciate the useulness o this institu-

tion. More than that, this perception hinders the progress o the Trade Unions and pulls them backward

into the past. As a result, they are orced to ght in an extremely antagonistic environment that not only

does not support proessional associations, but in which even the need or their existence is not realized.

By associating Trade Unions only with the protection o social benets, many libertarian representatives

o the Government and business sector view them as an obstacle or economic development, rather t han

its acilitator; they are raising the expenditures o economy, rather than contributing to the eectiveness

o production. Another reason or anti-trade-union attitudes is that the GTUC is at present the only politi-

cal and civil organization depending on broad membership and on membership subscriptions, in con-

trast to political parties and NGOs that do not have so many members paying membership subscriptions

and thereore nd it difcult to rely on a broad social basis.

This makes the Trade Unions a potentially powerul opponent to the Government, the more so, because

during recent years the GTUC managed to reverse the tendency o losing members. They also succeeded

in attracting the attenti on o international organizations. They induced the ILO to place Georgia on their

agenda, and have intense contacts with other Trade Unions worldwide. This creates problems or the

Government, which is not used to coordinating its economic policy with local organizations.

A broad social basis, international support, and possible inuence on economic policy are the three rea-

sons why the Trade Unions are now subject to strong political pressure. Cases o terminating collective

contracts, employers reusing to collect membership deductions, exerting pressure on and dismissing

Trade Union members have become requent. The only thing the authorities still grant the Trade Unions

is that their existence within public bodies, collective contracts and Trade Union activity is not directly

prohibited. As or any policy in support o Trade Unions development, this is completely out o the ques-

tion.25.

Open and hidden pressure, experienced by Trade Unions during 2010-2011 years rom the side o specic

public bodies and businesses, questions sustainability o their achievements. Trade Unions that have not

yet completed their unctional and organizational transormation, as a result o this pressure are presently

struggling or survival. Thus, they are vitally interested in overcoming this pressure and having a success-

ul Social Dialogue. Their allies in this regard are rather to be ound amongst international organizations,

than within the Georgian Government or business community.

The International Labour Organization has been working or years with the Government, the GTUC, and

the employers, in order to bring the Georgian labour legislation in line with international standards. In

Georgia, as well as in many other countries, this organization acts in its unction as an expert and consul-

tancy institution. Being the UN agency, responsible or drawing up and overseeing international labour

standards, the ILO unctions by uniting representatives o governments, employers and employees in a

tripartite ormat. Thus, Social Dialogue on a local level partly depends on the success o this dialogue on

a global scale.

Apart rom the ILO Conventions ratied, Georgia has undertaken various other obligations envisaging the

regulation o labour relations. The European Neighbourhood Policy Action Plan, a document enveloping

the main directions o Georgias European convergence, directly stipulates constant eorts or providing

the implementation o the standards set by the European Social Charter, providing adequate protection

25 Ibid

o the rights o proessional associations and complying with general labour standards in accordance

with the ILO conventions ratied by Georgia.26

Even stricter obligations are connected with including Georgia into the special incentive arrangement or

sustainable development and good governance the GSP+. The GSP+, o which Georgia is beneciary,

is conditional and implies that the country complies with the basic labour standards o t he ILO:

Georgia continued to beneft rom the special incentive arrangement or sustainable development

and good governance the GSP+ within the EU Generalized System o Preerences (GSP). These

enhanced preerences should help to diversiy Georgias export structure and improve its export per-

ormance. However, the above-mentioned, i unaddressed, put at risk Georgias inclusion in the GSP+

given that it i s conditional on the countrys Compliance with the core ILO and UN conventions.27

Another area, in which compliance with the core standards in a eld o labour relations is required, is the

Eastern Partnership (EaP) ramework. Negotiations concerning Deep and Comprehensive Free Trade Area

(DCFTA) would also raise labour issues and the correspondent legislation.

Georgia is also a beneciary to the US Generalized System o Preerences (GSP), which in its turn i s condi-

tional on bringing labour standards in Georgia in line with international ones. The American Federation o

Labor and Congress o Industrial Organizations ( AFL-CIO) has led a petition to this eect to the Ofce o

the United States Trade Representative (USTR), demanding to raise labour issues during the US-Georgian

2011 year negotiations on the prolongation o this agreement.

The abovementioned obligations, alongside with the ratied Conventions, constitute the ramework that

makes the EU, the ILO, the US Government and other international actors outside Georgia capable o

direct inuence on the process. Their involvement and commitment has been repeatedly maniested in

public statements as well as in practical ac tions.

The main recommendations received by the Georgian Government to this end in recent years concern

amendments to the legislation and aligning it with the abovementioned obligations. Already the European

Neighbourhood Policy Progress Report o 2007 states that The 2006 Labour Code, which was prepared

without prior consultation with Trade Unions, is not in line with the International Labour Organisation

(ILO) standards.28

The 2010 report reiterates a concern about the shortcomings in the Labour Code: despite an agreement

on minor amendments to the Code reached in the process o Social Dialogue, these amendments werenot implemented; moreover, pressure on the Trade Unions increased. Besides this, the Government has

no employment policy, neither an employment agency29.

The US Government considers decent labour relations and ull-righted Trade Unions to be indispens-

able components o a strong democracy and ci vil society. Accordingly, the US State Department closely

26 EU-Georgia European Neighbourhood Policy Action Plan.

http://eu-integration.gov.ge/index.php?que=geo/ofcial_documents

27 Implementation o the European Neighbourhood Policy in 2010. Country report: Georgia.

{COM(2011) 303}. European Commission. Brussels, 25/05/2011 SEC(2011) 649

28COMMISSION STAFF WORKING DOCUMENT.Accompanying the Communication rom the Commission to the Council and the

European Parliament Implementation o the European Neighbourhood Policy in 2007. Progress Report Georgia. Brussels, 3 April

2008. SEC(2008) 393

29 Implementation o the European Neighbourhood Policy in 2010 . Country report: Georgia.

{COM(2011) 303}. European Commission. Brussels, 25/05/2011 SEC(2011) 649


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16 17

watches their development in countries undergoing democratic transition. The US State Department

yearly Human Rights Report is unambiguously critical about the protection o labour rights and labour

legislation in Georgia30.

The activity o the international community is not conned to diplomatic measures, but also involves

practical development support or local Trade Unions and employers.

In 2007 the USAID decided Georgian Trade Unions needed development assistance and has nanced a

special program to this eect, implemented in Georgia by the Solidarity Center, ounded by the American

Federation o Labor and Congress o Industrial Organizations (AFL-CIO)31.

The mission o the Solidarity Center is to help build a global labor movement by strengthening the econom-

ic and political power o workers around the world through eective, independent, and democratic unions.

The Solidarity Center pursues this mission in many regions o the world including post-communist coun-

tries. The Solidarity Center had worked with th e Georgian Trade Union Amalgamation, the predecessor o

the GTUC, and with an independent teachers Trade Union rom 1998-2001. In late 2006, it again began work-

ing in Georgia with the GTUC, conducting train-the -trainer programs, unded by the National Endowment

or Democracy (NED). In early 2008, the Solidarity Center opened an ofce in Georgia and has continued

conducting seminars or GTUC-afliates members and provides consultancy services to assist Trade Unions

to reorm and become more proessional in playing its role in a pluralistic society with a market economy.

For years, the Friedrich-Ebert-Stitung (FES) has been providing development support to Trade Unions and

employers.

Another partner providing diverse and constant development aid to Trade Unions is the International

Trade Union Conederation (ITUC)32. For instance, with expert support rom the Conederation, the GTUC

reormed their organization structure in 2005-2009.

In addition to expert services, trainings and special programs, the partner organizations assist the Trade

Unions in lobbying activities. In June, 2011, the ITUC led a request to the European Commission to begin

an investigation on violations o Labour Conventions and discrimination o Trade Unions in Georgia. 33

This investigation was supposed to be conducted within the GSP+ ramework since the conditions o

this agreement imply assuring compliance with these Conventions. The Pan-European Regional Council

(PERC) o ITUC also addressed its member and observer organizations with an appeal to demonstrate

solidarity with the GTUC and support starting the abovementioned investigation in the nearest uture.

The PERC laid down the conditions the member states shall request rom the Government o Georgia:

The Labour Code o 2006 must be brought into line with ILO core labour standards Conventions iGeorgia is to live up to its international commitments to respect workers basic human rights. The

Labour Code needs to be modifed in close consultation with the ILO as well as workers and employers

organizations, on the basis o the Tripartite Agreement signed on 16 December 2008 to bring the na-

tional legislation into line with international labour standards and expand cooperation with the ILO.

All the attacks on GTUC structures and intererence into union aairs must be stopped. The govern-30 Country Reports on Human Rights Practices 2010, U.S. Depart ment o State. http://www.state.gov/g/drl/rls/hrrpt/2010/index.

htm

31 Web site: http://www.solidaritycenter.org/

32 http://www.ituc-csi.org/

33 Request or Investigation into violations o Core Labour Standards in Georgia under the provisions o t he GSP regulations No

732/2008 o 22 July 2008. ITUC/ETUC. Brusseles, 6 June 2011.

ment must intensiy its eorts to actively prosecute cases o anti-union discrimination and increase

the penalties to an adequate level.

The government must eectively promote collective bargaining in the public sector and ully recog-nize workers right to strike by allowing strikes also in conicts o interests.

The government should reinstate the labour inspection service to make certain that labour law ap-plies equally to all employers and workers.34

2.5. Social Dialogue: Dynamics of Recent Years

2.5.1. At the National Level

Relationships among Trade Unions and the authorities have been transorming over time. In 2005, when

the new leadership o Georgian Trade Unions Amalgamation was elected and they started to modernise,Georgian Government supported the process. Although later on the relationship between the authorities

and the GTUC became tense.

Initially the Governments economic and political reorms and the a ctivities o the Trade Unions, to a cer-

tain extent, developed in a parallel mode, without polarization.

At this stage the GTUC concentrated on reorming its own activit y, improving its public image, educating

new leaders and renewing its activity. A new eature o this policy was transparency and the attempt to

nd its own niche in public lie. Since 2006, the GTUC leaders did not hesitate to make public critical state-

ments on new labour legislation; they started organizing public May-Day demonstrations, and partici-

pating in civil society act ivities. This development was very dierent rom the previous period when this

kind o activity was only typical or NGOs and the newly established independent Trade Unions - those

grassroots organizations that emerged ater the soviet era.

Initially, the tactics o the GTUC public activity was advocacy, rather than pressure. So, the GTUC attempt-

ed to improve labour legislation by initiating dialogue with the Parliament. This was the rst time that the

Trade Unions relied on the great number o its members when in 2007 it init iated a bill in the Georgian

Parliament on introducing unemployment benets, signed by 40 thousand persons. 35 Later on, there

were several other cases o submitting bills to the Parliament by the Trade Unions, including an appeal

to revise the most discriminating articles o the Labour Code in 2009, this time with 100 thousand signa-

tures. All these initiatives ailed.

At the same time, the Trade Unions aced serious challenges. Ater the adoption o the new Labour Code,

bargaining with employers, including the renewal o collective contracts became more complicated.

Radical reorms undertaken in various spheres during this period brought on massive dismissal o per-

sonnel and revision o qualiying requirements. The motivation or recruitment or dismissal oten was

unclear or discriminating. Especially in the education sector where the Government reused to renew

collective contracts the situation became very difcult. The renewal o collective contracts was also con-

sidered unavourable or attracting potential investors to those state enterprises, which were identied

or privatization. All this required the ac tivity o Trade Unions, or which they were oten unprepared.

34 Ibid, appendix 4.

35At least 30 thousand signatures are required to initiate a bill.


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18 19

Under these circumstances improving o the Labour Code and the protection o workers rights as well as

strengthening the role and position o t he Trade Unions became a key issue by which the GTUC, with the

aid o international institutions and the European Union, attempted to clariy their relations with govern-

ment agencies. Placing the problems o Georgia on the agenda o international organizations rst o all,

on the ILO agenda meant going beyond a strategy o advocacy, and exerting pressure on th e Georgian

Government. At least this was how it was perceived by the authorities.

This strategy o pressure did not ail to bear ruit. Several appeals to the ILO resulted in activating this

organization with regard to Georgia and addressing a letter to the Ministry o Health, Labour and Social

Aairs.

Ater the ILOs appeal to the Ministry and the appointment o a new minister (A.Kvitashvili) in 2008, some

hope arose to nd a dialogue approach to the disagreements accumulated between the Trade Unions

and the authorities. A Tripartite Group was established in 2008. A Memorandum o Understanding under-

lying the creation o this Group was signed by the Ministry o Health, Labour and Social Aairs, the GTUC

and the Georgian Employers Association (GEA). The latter, at the time, was already closely cooperating

with the ILO, representing the interests o the employers in labour-related issues. The main topics on the

agenda o the Tripartite Group during 2009 were amendments to labour legislation, although the memo-

randum envisaged a possibility o considering other issues as well (such as pension reorm, insurance or

unemployed. etc.).

By Trilateral Agreement, in order to make the Tripartite Dialogue more eective, an a ction plan was elab-

orated according to which: The social partners meet biweekly in order to consider the current socio-

economic situation and solve arising problems; experts are invited to consider problematic issues arising

within the dialogue; concrete measures are taken in order to solve arising problems; legislative initia-

tives on social and economic issues are considered; both legislative and practical measures are elabo-

rated or ensuring progress in the eective application o association and collective bargaining rights,

including amendments to the Labour Code; cooperation and consultations with the International Labour

Organization shall be deepened in order to implement measures aimed at ensuring decent working con-

ditions and standard o living. The decisions made within the scope o t he dialogue would take the shape

o recommendations to be taken into account by th e Government.36

It was a result o this intensive work that, during a meeting with the executive director and the administra-

tion o the ILO at the ILO conerence in Geneva in June, 2009, the Georgian government representatives

agreed to make certain amendments to the Labour Code. These amendments were based on a list o 30

topics previously agreed upon by the parties.

Although, ater returning to Georgia the Government backed out and the agreement was not put into

practice. The promise given by the Minister was apparently not sufcient or the Georgian Government

to revise its position. In order to break the deadlock, on initiative o the GEA, the parties decided to lay

aside the Labour Code issue and engaged in institutiona lizing the Tripartite Commission and elaborating

its statute.

Thus, the decision o institutionalizing the Tripartite Commission, agreed upon within a Tripartite Round

Table meeting in Tbilisi, in October, 2009, should be considered a retreat (albeit temporary), rather than

the xation o achieved progress.

36Trilateral Agreement, October,31, 2008. htt p://gtuc.ge/ka/pressandpublications/88

The Tripartite Round Table, attended by the ILO representatives, agreed to carry on the cooperation be-

tween the ILO and the Government, and exchange ideas and opinions on labour legislation between the

Government, the employers and the GTUC, within the ramework o the Social Dialogue. Furthermore, it

was agreed to establish a Secretariat in order to ensure an eective conduct o the dialogue.

On November 12, 2009, a decree o the Prime Minister was issued on the establishment o a Tripartite

Commission. The elaboration o the statute o the Commission was then carried on within a working

ormat. The commission was established under the Ministry o LHSP and allocated with advisory powers.

On March 2, 2010, also by decree o the Prime Mini ster, the composition o the Tripartite Commission on

Social Dialogue was approved.

The Georgian Government was represented in the Commission by:

Alexander Kvitashvili,Minister of Labour, Health, and Social Protection of Georgia;

Vakhtang Lejhava, Chief Advisor to the Prime Minister of Georgia;

Dimitri Dzagnidze, Deputy Minister of Justice of Georgia;

Zurab Alavidze, Deputy Minister of Economic Development of Georgia;

Jambul Bakuradze,First Deputy Minister of Regional Development and Infrastructure of Georgia.

The representative Union of Employers was represented in the commission by:

Elgudja Meladze, President of the Georgian Employers Association;

Mikheil Kordzakhia, Executive Director of the Georgian Employers Association;

Mikheil Alkhanishvili, President of the Iberia Business Group;

Lasha Akhaladze, Head of the Committee of Employment and Business Relations of the Georgian Business Association;

David Koghuashvili, member of the Committee of Employment and Business Relations of the Georgian Business Association.

The Trade Unions were represented in the Commission by:

Irakli Petriashvili, Chairman of the Georgian Trade Union Confederation;

Johnny Janashia, President of the Free Trade Union of Healthcare, Social Protection, Medical and Chemical Industry Workers;

Lavrenti Alania, Chairman of the Trade Union of Motor Transport and Road Workers;

Suliko Mashia, Chairman of the Trade Union of Communication Workers;

Tamaz Dolaberidze ,Chairman of the Trade Union of Mining and Metal Industry Workers.

Several meetings o the Tripartite Commission were held under the Minister Kvitashvili and later under

his successor Minister Urushadze.

From the very beginning, there was disagreement on the agenda o the meetings. Despite the act that

the Commission was designed to bring on an agreement on the Labour Code and to ensure better repre-

sentation and more legitimacy o the ormat o work conducted in this eld, the main topic o discussion

on the agenda o the ver y rst meetings o the Commission were the appeals to the ILO and the European

Union led by the Trade Unions. The Government demanded to stop appealing to international organiza -

tions and consider all problems within the Commission.

Initially the chairman o the Commission indeed made some steps towards solving the most acute prob-

lems acing the Trade Unions. He acted as a mediator appealing to the Ministry o Education and tried

to settle the situation in the Georgian Railway.37 However, on the whole, the meetings o the Tripartite

Commission soon looked like senseless repetition o already declared positions. With ti me, the meetings

37 In more details about these Sect oral dialogues see in chapters 4.1. and 4.2.


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20 21

became less and less requent. According to the statute, the Commission should meet at least quarterly.

However, by the end o 2010 GTUC had been complaining that the process has been rozen. No such

meeting was held during the rst hal o 2011.

At the same time, as a response to Trade Unions activities ater 2010, the Government started exerting

pressure on the Trade Unions. In schools, where the number o Trade Union members was the h ighest, the

automatic deduction o Trade Union membership subscriptions was terminated. The inability to collect

membership subscriptions in this organization and in others a s well created serious economic prob-

lems or the Trade Unions. In many private, public and state-owned organizations and enterprises, local

Trade Union leaders had to collect member signatures several times in order to reach the completion o

a collective contract. In some cases, contrary to the legislation requirements, the employer attempted to

demand a notarization o the signatures.

Although the practice o collecting membership subscriptions by the employer has both positive and

negative sides to it,38 the reusal rom the employers side to automatically deduct Trade Union member-

ship subscriptions was a heavy blow to the Trade Unions. Collecting membership subscriptions via bank

transer is connected with very high operational costs apart rom being complicated rom the organiza-

tional point o view. Every transaction costs rom 50 Tetri to 1 Lari which in some cases is almost as much

as the membership ee itsel. Moreover, the membership subscription deducted rom the monthly salary,

in case o bank transer, is calculated not as 1% rom the salary, but rom the actual amount transerred to

the bank, i.e. rom net salary with income tax deducted.

To request transerring the membership subscription, every Trade Union member has personally to ll

in a request orm at the bank, and this has to be done every year. The banks are not able to deduct the

subscriptions automatically rom the transerred salary, so it sometimes happens that at the moment

when the membership subscription has to be deducted, there is no money let on the account. Dierent

organizations have contracts with dierent banks on the transer o salaries, so the Trade Unions have

to deal with many banks. Initially, the banks reused to transer membership subscriptions to the Trade

Unions under the pretence o not being equipped with the necessary sotware. Later on, this problem

was solved, but in many cases it is still not possible to organize th e transers.

By the middle o 2011 the situation seemed to stabilize. In June, 2011, the meetings were resumed ater

a hal-year break; since then they became even more requent (the eectiveness o these meeting nev-

ertheless remained questionable). Although, the August events in the metallurgical plant ,,Eurasia Steel

in Kutaisi once more put Social Dialogue perspectives under question. The role o local authorities and

police in the dissolution o the plants workers strike cannot be interpreted other way as one-sided and

illegal support to the employer against workers.39 The act that, despite the request rom the GTUC, the

Tripartite Commission ailed to provide its opinion on a law violation may cause urther erosion o trust

towards it.

Taking into account the present situation, it can be said that the establishment o the Tripartite Commission

should not be understood as a change rom a policy o mutual ignoring and conrontation to the dia-

logue between social partners. To date, these relations are based on the principle o the balance o pow-

ers rather than on a oundation o mutually benecial cooperation.

The main achievement o the Tripartite Dialogue is, maybe, the existence o the dialogue as such and the

38 This procedure o collection makes the names o Trade Union members known to the employers; exposure o the workers

personal data enables the employers to exert additional pressure on Trade Union members.

39 In more details about this events see in a ollowing sub- chapter and in a sub-chapter 4.3.

uture potential it may carry. The obligation undertaken by the parties to meet regularly, to exchange

opinions, and to argue, is, to some extent, reducing the risk o a worsening o the situation and its trans-

ormation into radical conrontation. On the other hand, the absence o positive results and the decel-

eration o the process indicate a danger o its ailure. Taking into account the dierent expectations and

strategic goals o the parties with regard to the dialogue, this danger becomes very real.

The Trade Unions are the party most interested in the success o the dialogue, which is o vital importance

or them. Although the Trade Unions have started the process o inner reorms and transormations, they

are, as yet, ar rom reaching a stable position, in which their institutional existence would not be endan-

gered. They are orced to play a difcult balancing game between the workers and the rigid employers

in an environment o extremely unavourable legal regulations and ill-wishing. To quote Jon Elster once

again, they have to rebuild the shipnot only at sea, but during a storm. The only alternative to i mproving

the legislation in the process o dialogue available to the Trade Unions would be adopting a more radical

approach; however, taking into account the existing polarized political context, their resources or doing

so are rather limited.

Contrary to the Trade Unions, the Government is interested in dragging out the dialogue without achiev-

ing tangible results. This strategy enables them to carry on with an ultra-liberal economic policy while

retaining dialogue relations with European and international institutions. As or Social Dialogue, the

Government regards it as a means to channel workers protest.

The Employers Association, representing the interests o the business community in the Tripartite

Commission, holds a relatively weak position as compared to the remaining two players, since it does

not have any real leverage over its opponents. Big companies and powerul business actors, are only

indirectly involved in the work o the Commission and represent interests that are, to a certain extent,

dierent rom those o the Employers Association. From the point o view o the latter, the Tripartite

Commission should not be primarily oriented on considering the regulations o the Labour Code; i nstead,

it should also engage in sorting out other problems as well like, or instance, the pension reorm, em-

ployment policy, proessional retraining, unemployment insurance systems, etc.40In their opinion, even

small progress in connection with any o these issues would be a clear demonstration o the useulness

o the Commission.

By the end o 2011 the prospect o continuing the Tripartite Dialogue seemed rather vague. Due to lack o

result in the dialogue, the issue was again transerred to the international level. The partner Trade Unions,

the ILO and other international actors tr y to achieve concrete results with regard to the improvement o

labour relations, stopping the discrimination o Trade Unions and increasing the eectiveness o Social

Dialogue. At the same time, Trade Unions o other countries provide nancial support to the GTUC till it

manages to sort out its nancial problems.

2.5.2. Social Dialogue at the Sectoral and Company Level

Although at the national level there has been no improvement o the legislation as a result o Social

Dialogue, at the level o companies some progress could be observed in 2010 with regard to concluding

collective contracts. Several collective contracts were signed; moreover, the conditions were better than

those o previous contracts. In 2011, however, it became clear that the progress was lacking a sustainable

oundation.

40Ch. V, Present State o Social Dialogue in Georgia, in the book: Social dialogue (in Georgian). Textbook. Saunje, Tbilisi, 2011, p. 141


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22 23

This progress was made possible by the well-balanced application o new tactics adopted by the Trade

Unions. The 2010 strike at the metal plant in Zestaoni resulted in signing a collective contract.41 This in-

duced other companies to take the issue more seriously and engage in a dialogue with the Trade Unions.

A strike called later on at the Tkibuli coal mines also was successul. As a result, some o other employers

also revised their position: or instance, this happened at the Tbilisi Water and the Azot Plant whose pro-

prietors initially reused to sign collective contracts. However, this improvement was mainly conned to

heavy industry companies.

From this experience, the Trade Unions learned two lessons: rstly, an eective strike is a part o the

Social Dialogue and not its alternative; and secondly, a large Trade Union operating in an out-dated ash-

ion might prove useless whereas a relatively small, but well-organized and motivated organization may

achieve its goal even i a greater part o the employees remains passive.

Combining strike and dialogue instead o regarding them as alternative solutions puts the relations be-

tween employers and employees in a totally dierent light, by replacing old Soviet stereotypes based onthe practice o democratic centralism, according to which the powerul state/employer would listen to

its citizens by its own good will, retaining, however, the sole authority o the nal decision. Protest and

autonomous action were regarded as insubordination and not as a part o the negotiation process.

Another lesson the Trade Unions learned was that a strike does not have to be spontaneous. Strikes called

without due preparation, as, or instance, the strike in Poti, ailed. 42 To induce the employer to change

his tactics and switch rom ignoring to dialogue, the Trade Unions must be able to carry out rational and

well-planned actions.

The successul strike at Zestaoni was the rst one to be conducted in ull accordance with the new labour

legislation. It started with a warning strike ollowed by a written proposal or a dialogue. The employers, in

their turn, made a tactical move: 2 days ater the calling o the strike the strike committee received a let-

ter with the warning that the plant management was planning a lockout. Since this was a real threat, the

strike committee proceeded to agree upon the decision on continuing the strike during a public meeting,

together with all the workers on strike. In the end, the management was orced to concede to negotia-

tions that ended by signing a compromise collective agreement.

The strikes have been successul only i they were just episodes o labour rights protection by Trade

Unions, rather than its main part or an end in itsel. For the employers, it was possible to avert them by

taking timely measures to start a dialogue. The strikes were preceded by negotiations on concrete issues

and their goals were also very concrete and down-to earth.

For the implementation o this kind o tactics old-ashioned and passive Trade Unions, who were used to

a conict-ree style o relations with the employer, might prove useless. Although such organizations are

usually more numerous, in a critical situation they tend to retreat, rather than to protect their interests.

This kind o a yellowTrade Union also existed at the Zestaoni plant, but a newly established and ar less

numerous organization was very efcient in competing with it.43

The success o the Zestaoni strike was predetermined by a number o actors. Firstly, the branch itsel has

41 About the strike see also chapter 4.3.

42See chapter 4.4.

43 It is important to make dist inction between yellowand independent Trade Unions. On this issue see also the research paper

"Trade Union Movement in Georgia ". Transparency International Georgia. February 2010.

a tradition o Trade Union activity. In heavy metal industry wages are low even or high-ski lled proession-

als; at the same time, a crucial role is played in the branch by high-skilled proessionals whom it would

not be easy to replace by strike-breakers. The strike coincided with the pre-election period so that the

Government did not want unnecessary tensions. The strike was conducted by well-prepared and trained

young leaders who were supported by the whole conederation and who received advice rom oreign

colleagues. Thus, this case might be considered an example o the efciency o proessional solidarity.

The success inspired Trade Unions to repeat the experience in August 2011 in Kutaisi, but this time they

aced quite a dierent response. Their tactics o strike, conducted with the scrupulous ollowing o the

law regulations, was conronted with mere violence. Workers o the metallurgical plant ,,Eurasia Steel ,

who ormed a Trade Union and went to strike, demanding better working conditions, were threatened

and many o them arrested by police.44 The Trade Unions leaders were dismissed rom their jobs. Some

o them were later returned to their working places in exchange to promise to rerain rom the Trade

Unionist movement. The police reportedly was involved in orcing workers to return to their working

places.

Such development pushed the process o dialogue back to the conrontational logics. It demonstrated

that even the restricted rights, provided by the Labour Code were not observed in eect. It also demon-

strated that without being strong enough to arrange mass solidarity strikes, Trade Unions may be unable

to keep enough bargaining power vis--vis the united alliance o authorities and employers. Apart rom

this, it brought to the ore the political considerations. Given the polarized political context, the political

environment may have decisive inuence on a success or ailure o GTUC eorts. It may be because the

strike in Zestaoni preceded the local elections o 2010 that the authorities rerained rom using vi olence.

I so, the GTUC has to revise its tactics accordingly.

The Sectoral level is a much emptiereld or Social Dialogue. This has both objective and subjective rea-

sons. At this intermediary level, there are almost no business associations who might represent the in-

terests o the business sector in the dialogue. Accordingly, except public sector, where the State is an

employer itsel, no Sectoral Trade Union has a vis--vis, representative or Sectoral i nterests o employers.

In addition, the State does not support tari policies, which would be impossible to implement anyway,

due to the absence o governmental Sectoral development policies. Thus, i Sectoral Trade Unions at-

tempt to enter a dialogue with th e corresponding ministry, this attempt is acing serious obstacles rom

the very beginning.

However, there are many issues outside the scope o tari regulations that require Sectoral dialogue.

For instance, in the Healthcare Sector, a structure which regulates a proession is subordinated to the

Ministry, so the Sectoral Trade Union that is seeking the possibility to protect the interests o healthcare

workers in arising disputes have to deal with the Ministry. The Sectoral Trade Union and the Ministry are

engaged in dialogue concerning various topics.

The teachers Trade Union was always and still is the most ac tive Sectoral union. 45 The public servants

Sectoral Trade Union has relatively constructive relations with regional sel-governance institutions, while

within the ministries there are no Trade Unions let. However, due to the absence o a relevant structure

within the Government and t he absence o proessional standards or public servants, the Trade Unions

have no partner or dialogue. As contrasted with these sectors, in branches like, or instance, the energy

sector which is completely commercialized, Sectoral Trade Unions are oriented enti rely towards dialogue

with the corresponding companies.

44See also chapter 4.4.

45 For more detail on the relations between the teachers Trade Union and the Ministry o Education see chapter 4.1.

fes_social dialogue in georgia_eng

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