Economic Effects of the Initiated Amendments to the Labor Code of Georgia

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Project Description:


The objective of the project was to identify the possible effects of the initiated amendments to the Labor Code of Georgia. We analyzed the attitudes of the business managers towards these changes. The analysis was based on international empirical studies, experiences of other countries and a survey of business leaders’ attitudes to the proposed amendments in Georgia’s Labor Code.

Target Groups: Business Leaders, Ministry of Justice, Ministry of Economy, General Public

Project Outcomes: The research findings show that respondents perceive the initiated amendments to the Labor Code of Georgia to negatively impact the creation of new jobs. The respondents also believed it would increase the possibility of a shadow economy and political corruption. In addition, respondents stated that in case of an economic crises, it would be difficult for the country’s economy to adapt.

Recommendations: Based on the research findings, the following recommendations were made:

  • Restrictions on fixed term contracts should be reduced or abolished;
  • Freedom of starting and ending labor relations for both employer and employee, and the equality in the event of termination of the labor contract should be ensured;
  • The level of freedom to draw up collective agreements should increase, meaning that the trade unions should not have monopoly conditions provided by the law to proceed with collective bargaining on behalf of employees;
  • The participation of the Minister of Labor, Health and Social Affairs in the resolution of collective dispute processes should be fully excluded.

Background information:

The East West Management Institute (EWMI) Policy, Advocacy and, Civil Society Development in Georgia (G-PAC) is a four-year initiative funded by the United States Agency for International Development (USAID).
Its aim is to strengthen civil society’s role in advocating effective public policy reforms in Georgia. EWMI G-PAC provides grants and demand-driven capacity development assistance to civil society organizations.