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Social Dialogue in Georgia

MARINA MUSKHELISHVILI

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

Social Dialogue in Georgia


MARINA MUSKHELISHVILI
1. Brief overview 2. Social Dialogue - Issues, Agenda and Dynamics
2.1 The Concept of Social Dialogue 2.2. 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 Sectoral and Company Level

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3. Parties involved in the Social Dialogue


3.1. 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

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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

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4. Individual Sectors and Cases


4.1. EducatorsandScientistsFree 4.2. Trade Union of Railway Workers of Georgia 4.3. Metallurgical,Mining and Chemical IndustryWorkers 4.4. Poti Port 4.5. Khelvachauri, BTM Textile 4.6. Communications: Silknet and Post of Georgia

3.3. State/Government

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5. Summary and Conclusions

1. Brief overview
The study of Social Dialogue in Georgia, presented in this research paper, describes and analyses developments that are linked to the policy of institutionalization of Social Dialogue in Georgia. It aims to analyse the existing experience and to foster further development in the regard of Social Dialogue. The study is conducted for the practitioners, involved in a process of dialogue, as well as for the broader auditory, interested in a transformation of labour relations in Georgia. Institutionalization of Social Dialogue in Georgia is one of the most important components within the countrys policy of convergence with the EU standards. Social Dialogue is, in its essence, based on values that have played a crucial role in forming modern democratic Europe. Social Dialogue, in a broader sense, is based on that model of pluralism, which has produced European-styled representation, parliamentarism and civil society. With these institutions it provides for a non-antagonistic coexistence and sustainable development of diverse interests. From this perspective, promotion of Social Dialogue is regarded as an element of Georgias European integration policy. However, the need for it has arisen from a real conflict. 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 international Conventions ratified by Georgia. The new Code was aimed at creating a business-friendly environment in Georgia. The code has been sharply criticized by Trade Unions, civil society and international organizations for doing this at the expense of an adequate protection of workers rights. Moreover, it restricted the Trade Unions potential for protecting these rights, thereby invoking protest from Georgian Trade Union Confederation (GTUC). This character of the Georgian Labour Code is only a part of a government policy prevailing in all directions since the Rose Revolution. In order to stimulate economic development the Government is clearing the road for foreign capital investment by applying a whole complex of measures aimed at creating an investment-friendly climate, including the establishment of a flexible labour market and cheap labour. Despite a proclaimed course of European integration the authorities are pursuing an active policy of deregulation, which heads into a quite different direction from the European-styled regulated economy. By the time when the new Labour Code was adopted reforms had started in the Georgian Trade Unions as well, initiated by leaders who advocated a new approach in the functioning of the Trade Unions. Against the background of the extreme tension between employers and employees resulting from a practice of deregulation and a policy of flexible labour relations, the Trade Unions had no choice but to switch to a pro-active working mode and affirm their autonomous position by opposing Governments labour policy. Thereby the initiation of Social Dialogue, which resulted in establishing a Tripartite Commission in 2009, is not an artificial, prescriptive institutional innovation dictated by the wish to imitate Europe. On the contrary, it is a complex mixture of diverse vital interests and strategies. Having evolved in an extremely antagonistic environment of Georgias political climate, it hides, beneath a surface of declared dialogue approach, an explosive confrontation that is as yet far from reaching any form of compromise. By the end of 2011, the Tripartite Commission has been working on a regular basis for almost two years.

Nevertheless, it is still too early to speak of any sustainable institutional progress. Much remains to be done for establishing Dialogue as a means for approaching problems in labour relations. The efforts of the EU, the ILO, and other international actors, to establish international labour standards and ensure adequate protection of 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 significant changes in the existing balance of powers. However, as long as Social Dialogue exists only at the expense of maintaining the balance of powers the sustainability of its institutionalization and the real benefit it might bring remain questionable. Even small progress indicating a possibility of bringing closer the positions of the parties would be crucial to turn this process into reality. The further development of Social Dialogue has to be seen in a wider context of Georgias transformation. If the policy of encouraging business would prevail over laying the foundations for democratic pluralism, the development may become one-sided, thus delaying the prospects of Georgias European integration for an indefinite period of time. To come closer to Europe Georgia has to share values of the European pluralism and to implement them in practice. Labelling institutes, ideas and movements, associated with Trade Unions and labour protection as remnants of Soviet times and making this an excuse for hindering their development might lead not towards Europe, but towards an oligopolic economy with high inequalities and narrow middle class. Contrary to this, a true Social Dialogue might help to combat the worst Soviet leftovers as it works against radicalism in decision-making and abandons absolutist, one-sided approaches in policy-making practices. The paper is structured in a following way. Chapter 2 overviews the concept of Social Dialogue, the political and legislative environment, against which it develops, factors and actors that have a major influence on it; it describes the recent events and dynamics of the process and the progress that was reached as of 2011 year. In Chapter 3 is given more detailed analyses of social partners, involved in the Dialogue: Trade Unions, business associations and Government. Chapter 4 provides more detailed information on specific cases, Sectoral unions and events. By highlighting the most typical and/or pressing problems and patterns it aims to complete the picture of labour relations in Georgia, which was presented in a relatively condensed form in previous chapters. In the last chapter readers will find an overview of findings and the final analyses, which aims at further fostering of the Social Dialogue. The study was prepared by the request and with the support of Friedrich-Ebert-Stiftung. It is based on the following sources: factual information gathering, documents analyses, and interviews with the representatives of Trade Unions, business associations, Government and international organizations, conducted during March-July in Tbilisi, Georgia. The author would like to thank all respondents for the kind assistance in the course of the study.

2. Social Dialogue - Issues,


Agenda and Dynamics
2.1. The concept of Social Dialogue
Social Dialogue is one of the foundations of the European Social Model. The term Social Dialogue is used to describe a wide range of practical realities1. In some countries, especially in continental Europe, this dialogue is based on centuries-long experience and combines naturally with other components of the political system. In other counties, it is still beginning to establish itself and plays a less important role. Social Dialogue is defined by the International Labour Organization to include diverse processes and practices such as all types of negotiation, consultation or simply exchange of information between representatives of governments, employers and workers, on issues of common interest relating to economic and social policy. 2 Social Dialogue plays a key role in achieving the ILOs objective of promoting opportunities for women and men to obtain decent and productive work in conditions of freedom, equality, security and human dignity.3 The Strategy for achieving this goal is to regulate labour relations by seeking consensus between the parties. This is what a Dialogue means: moving from confrontation towards a mutually beneficial cooperation. Social Dialogue can exist as a tripartite process, with the Government as an official part to the dialogue or it may consist of bipartite relations only between labour and management (or Trade Unions and employers 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 informal or institutionalized, and often it is a combination of the two. Social Dialogue can take place at the national, regional or enterprise level. It can be inter-professional, Sectoral or a combination of all of these. Information exchange is the simplest form of Social Dialogue. The obligatory exchange of information is a minimal way of cooperation enabling the parties to avoid being unprepared for possible developments. Starting with information exchange, the parties could then move on to a higher level of cooperation, namely to consultations. In the process of consultations the parties not only exchange information, 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 of cooperation. Collective
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negotiations usually concern wages and working conditions and may result in collective agreements if successful. Agreements on strategic issues are, as a rule, much more comprehensive. Their objective is to seek social consensus on the essence of economic and social policies determining the countrys development. The readiness for such a dialogue depends, primarily, on the Government. A successful 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 of partnership and implies the wish to detect common interests. In the process of 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 of problem solving among social partners; it is important, though, that the parties recognize the necessity of partnership relations. Apart from the traditional parties 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 of small business, cooperatives, consumers associations, and farmers associations, can also participate. In this case the Dialogue is referred to as tripartite plus. The content of the dialogue is closely related to who is involved in it. For example, Tripartite Plus dialogue 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 reforms, regional economic integration, education, social policy, taxes, etc. Social Dialogue, hence, may be not restricted to regulating disputes arising between employers and workers. Disputes of this kind could be the topic of bilateral negotiations, e.g. within the company. Tripartite negotiations may go beyond the scope of labour relations and address a broader context of basic economic issues. However, the involvement of other actors in the dialogue implies interest in securing a model of economic development that would be beneficial for different social groups, including those that are relatively vulnerable. Successful Social Dialogue in countries that are in the process of democratization depends directly on the broader political context of creating a democratic environment. Democracy can be considered as a precondition for Social Dialogue, as well as being partly a result of the latter. Social Dialogue implies decentralizing of governance and sharing the governance responsibility by society. Participation of this kind is only possible within a free society that gains influence through ensuring representation and freedom of association. Successful Social Dialogue increases popular consent and adds legitimacy to political decisions. Successful Social Dialogue ensures respecting the interests of all social groups and thereby alleviates social inequality and strengthens the resources for public participation in the democratic process. Moreover, Social Partnership is an integral part of European integration and Europeanization of the country. Social Partnership is a traditional and essential element for European democracies. In countries like Germany, Austria or the Netherlands Social Dialogue is a natural component of the political culture to a degree that makes formal provisions less important.

This paragraph is mainly based on the book: Junko Ishikawa. Key Features of National Social Dialogue: A Social Dialogue Resource Book. Geneva, International Labour Office, 2003 Ibid, page 3. Social Dialogue, ILO. http://www.ilo.org/public/english/dialogue/themes/sd.htm

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2.2. Georgias Political and Economic Context


20 years after gaining independence and starting reforms Georgia still can be hardly called an established political and economic model. Political, economic and social institutions still are not finally established. In some aspects Georgia resembles other post-soviet countries, though there are significant differences as well; these distinctive features determine the special character of Social Dialogue issues in the country. The collapse of Georgian economy has been one of the most grievous throughout the post-soviet space, and the political climate one of the most polarized and, at the same time, unstable. Jon Elster once described the process of post-communist institutional reforms as rebuilding the ship at sea4. Building an independent state, establishing a democratic political system and creating a neoliberal, globalized economy these are the most large-scale projects of this transition that determined the agenda of the last twenty years. This transition process can be divided into stages according to the major driving ideas and transition tendencies. Till 2003 it was Democratization, which resulted in establishing a hybrid regime that provided much more freedom to the population than it had been possible in Soviet times, but failed to ensure accountability of the Government to the people and public participation in the execution of governance. Increasing popular dissatisfaction with non-efficient governance resulted in a change of regime in 2003. President Shevardnadze resigned and Saakashvili came to power. After the Rose Revolution of 2003 the new government declared a policy of convergence with Europe to be its main priority. The European flag was erected on state buildings side by side with the Georgian state flag. Although very soon the NATO integration policy became more dominant than European aspirations, still the course of 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 accordance with this agreement, Georgia undertook the obligation to achieve progress in various spheres, including the regulation of labour relations. Despite the controversies and drawbacks, Europe, along with the USA, remains a geopolitical partner of crucial importance for the countrys future. 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 reformist stances of the post-revolutionary government. This contradiction caused increasing problems with media freedom, judicial independence, electoral process, etc.5 The gap between the authorities and the society widened gradually, and the arising tensions found no reconciliation within the existing institutions. Massive protests in 2007 resulted in a political crisis, which deepened in the aftermath of the 2008 August war. The opposition accused the Government in a systematic violation of civil rights and liberties and abuse of power. The atmosphere of mistrust instead of dialogue brought on a deep polarization in Georgian society. It is clear that the transition from this polarized situation to Social Dialogue must go beyond the scope of mere regulation of labour relations and poses a serious challenge for those actors who are willing to cooperate. Meanwhile, poverty and unemployment have established themselves as the most prominent social prob4

lem of the society and the subject of daily concern for a vast majority of the population.6 The economy, having collapsed at the very beginning of the transition, is in need of investments in order to create jobs. Deindustrialization caused a dramatic increase of unemployment rates in a country where, formerly, unemployment virtually did not exist. A great part of the population lost their jobs due to closing down enterprises or staff reduction at their working place.7 Workers are under continuous threat of losing their job in a situation where chances of employment are low. Self-employment has increased pronouncedly. At present, about 30% of workforces are wage labourers, more than a half are self-employed, and 16% are unemployed.8 The high rate of self-employment can be attributed to hidden unemployment, rather than to effectively functioning small entrepreneurship. A greater part of the self-employed is made of individuals who earn sustenance for their families by farming on a small piece of land. These individuals are considered to be agricultural workers. At their expense the rate of agricultural labour has doubled since Soviet times from 25% to more than 50%.9 It is also important to take into account the structural features of unemployment: new jobs often require qualifications for which there is a shortage within the country. Some part of the population is trying to answer this demand for retraining by informal education while others fail to attain the necessary skills and competences. The deregulated education system is unable to provide the labour market with professionals for which there is high demand, whereas, at the same time, there is an overflow of university graduates in those professions, which are considered to be more prestigious (like foreign relations). In addition, the principle of equal pay is not guaranteed: the wages for the same work conducted by equally qualified individuals differ dramatically depending on the employer. The difference between high and low salary within the same organization is extremely high. Recruitment depends on personal relationships, rather than on qualification. Complaints within the society against political discrimination during recruitment or dismissal are widespread, increasing the politicization of the employment phenomenon. All this makes employment a privilege, rather than a right. Within a polarized society the issue of labour and employment also becomes a part of antagonistic relations. Against a background of economic hardship, it was the capital that became the main and principal concern of the governmental economic strategy after the Rose Revolution. Attracting foreign direct investments (FDI) became a priority. In order to increase the countrys attractiveness to investors, reforms were undertaken with the aim to raise Georgias rating by the World Banks Ease of Doing Business Index (EDBI). Within just a few years, Georgia made an impressive leap in this regard and secured a reputation of a leading reformer state.10 Up till 2010, flexibility of labour relations simplifying recruitment and dismissal procedures was one of the components required for increasing the EDBI index. Accordingly, the ultraliberal Labour Code adopted by the parliament in 2006 should be regarded as a part of a strategy aimed at attracting direct investments.

In all surveys conducted since 1995 these problems are reported, in one or another formulation, as the most serious concerns of individuals. See, as an example, surveys on http://www.iri.org/explore-our-resources/public-opinion-research/public-opinionpolls. The level of wage employment is at present 3 times lower than in the 1980-ies. cf. Soso Archvadze Current demographic situation in Georgia as a victim of political and economic circumstances. (in Georgian) http://european.ge/?id=215 By 2010; National Statistics Office of Georgia, http://www.geostat.ge/?action=page&p_id=145&lang=geo Cordonnier, Christophe. 2010. EU Export Market Conditions for the Realisation of the Competitive Advantages of Georgian Agricultural Products. Tbilisi, GEPLAC. 19p. http://www.geplac.ge/eng/Reports.php. During the last 5 years (2006-2010) Georgia is at place 1 by the World Banks Ease of Doing Business Index, cf. Doing Business 2011: Making a Difference for Entrepreneurs. WB, p. 5.

Elster, Jon, Claus Offe and Ulrich K Preuss. 1998. Institutional Design in Post-communist Societies: Rebuilding the Ship at Sea. Cambridge: Cambridge University Press. pp.26-27. For more details on post-revolutionary dynamics of democracy development, see Nations in Transit 2011, http://www. freedomhouse.org/template.cfm?page=678http://www.freedomhouse.org/template.cfm?page=678 and M.Muskhelishvili, G.Jorjoliani. 2009. Georgia's ongoing struggle for a better future continued: democracy promotion through civil society development, Democratization. Volume 16, Issue 4. pp. 682 - 708.

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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 from the fact that, as opposed to most other countries, Georgias economic climate ratings according to the EDBI index and the World Economic Forum Global Competitiveness Index (GCI) are very different. This latter has not increased as a result of the 2005-2009 reforms (in 2009, Georgia rated 90th of 133 countries).11 In 2010-2011 the GCI overall rating of Georgia fell even further to 93rd place out of 139, within which labour market efficiency rating comprises the highest (37th) and the macroeconomic environment the lowest (130th) component.12 Stressing the difference between these two ratings is important to avoid the impression the reader might get, that the undertaken reforms succeeded in establishing a new institutional environment, in which liberal regulations are created for business, whereas superfluous deregulation of labour relations is just a byproduct desirable or undesirable of establishing these regulations. In fact, the macro institutional environment in Georgia continues to be an obstacle for business development. In this environment, issues like the Supremacy of Law, independence of the judiciary, property protection, or fair 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 risks. The high scale of shadow economy in Georgia that affects not only labour relations, but also a greater part of economic activity is evidence for the gravity of these risks.13 The abovementioned circumstances are a serious handicap for the representation of the interests of the business sector; they weaken the potential of 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 for better established rules of the game, it would be possible to strengthen their partnership, instead of confrontation within the framework of a broad, rather than narrow Social Dialogue. However, opportunities of such broad dialogue are restricted because of the legislative environment, introduced by the Government. The course of liberalization of economy and attraction of 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 foresees stipulating the character of the countrys economic policy at the constitutional level. Although the preamble to the constitution still refers to Georgia as a Social State, after the constitutional amendments of 2010 this statement looks more like a leftover from the 1995 constitution. The constitutional amendments of 2010 that were a part of the Liberty Act in fact contradict this declared Social State principle. According to these amendments, introducing or increasing state taxes is only possible by referendum that can be initiated only by the Government. Taking into account that theres a flat rate of income tax in Georgia today and there is no separate social tax, any institutionalization of social solidarity seems unlikely in the near future. The Organic Law on Economic Freedom adopted in June, 2011, is the second part of the Liberty Act. According to this law, the consolidated budget may not exceed 30% of GDP, the budget deficit may not exceed 3% of GDP, and the total state debt may not exceed 60% of GDP. In his address to the Georgian
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Parliament while presenting the Liberty Act at October 6, 2009, President Saakashvili clearly stated the priorities of the countrys economic policy: Our ambition must be to turn Georgia into a flagship of worldwide liberal economic ideology and thereby create a comparative advantagerelative to othercountries. This is the goal, the great mission that the Liberty act serves. Today, while waves of indistinct and disoriented socialist and populist ideas are flooding the world shaken by global economic and financial 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 is only more liberalism and not state regulation of economy. Georgia is a part of global economy and our efforts 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 of this kind, coupled with erosion of Democracy, arouses questions regarding the sincerity of Georgias declared strategy of 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 from the processes described in the subsequent chapters.

2.3. Legal Environment


The main documents providing a legal framework for labour relations are the Georgian Constitution, ratified international conventions, the Labour Code and the Law on Trade Unions. Georgia has ratified the Freedom of Association and Protection of the Right to Organize Convention, 1948 (No. 87, ratified 1999) and the Right to Organize and Collective Bargaining Convention, 1949 (No. 98, ratified 1993), as well as other Conventions on labour. The ILOs Committee of Experts on the Application of Conventions and Recommendations (CEACR) yearly assesses the compliance with international Conventions and related guidelines by different countries including Georgia. Other international organizations rely on the findings of this committee in their assessment of 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 87th and 98th Conventions. In addition to these earlier obligations, after the Rose Revolution Georgia signed the European Social Charter, and (partly) ratified it in 2005. Moreover, freedom of labour is declared in the Georgian Constitution which, at the same time, obligates the State to regard labour from the human rights point of view: protection of labour rights, fair wages and a secure, healthy working environment, working conditions for juveniles and women are regulated by the Organic Law.16
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Schueth, Sam. 2011. Assembling International Competitiveness: The Republic of Georgia, USAID, and the Doing Business Project. ECONOMIC GEOGRAPHY, Vol. 87 No. 1 pp.51-77 The Global Competitiveness Report 20102011. World Economic Forum 2010. Geneva. According to some calculations, in 2007 the scale of shadow economy in Georgia was the highest in the world (more than 70%). cf. Friedrich Schneider, Andreas Buehn and Claudio E. Montenegro. Shadow Economies All over the World: New Estimates for 162 Countries from 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.

Mikheil Saakashvili, President of Georgia, presented an economic package to the Georgian Parliament. http://www.president. gov.ge/ge/PressOffice/News/SpeechesAndStatements?p=2237&i=1 cf., e.g., GEORGIA LABOR SECTOR ASSESSMENT. USAID, SEPTEMBER 2009, Conclusions 2010 (GEORGIA) and European Social Charter (revised). Articles 2, 4, 5, 6, 26 and 29 of the Revised Charter. December 2010, European Committee of Social Rights. Council of Europe. Constitution of 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 left 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 freedom to create professional unions and to join such unions. Trade Unions are also allowed within public institutions, with a few exceptions (law enforcement agencies). The employer is obliged to negotiate with the Trade Unions on collective labour contracts (article 12(2)). It is also the obligation of the employer to inform the Trade Unions on expected staff reduction and/or worsening of 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 of at least 100 members (article 2(9)). Trade Unions are entitled to form primary Trade Unions at the enterprises, institutions and other places of work. The latter have to follow 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 for this organization. By setting a minimum Trade Union membership requirement of 100 members, the law, to a certain extent, limits the right of the employees of smaller enterprises to unite in autonomous Trade Unions. In enterprises with less than 100 employees, a Trade Union can only exist as a division of 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 of Trade Unions limits the potential of autonomous action of the workers and contributes to the cultivation of hierarchical relations in the Trade Unions, thereby hindering the development of internal democracy. According to CEACR17, the minimum Trade Union membership requirement of 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 for substantially narrowing the rights of workers and professional associations, and for being adopted without reaching agreement with the Trade Unions. Moreover, the Code contradicts the Conventions ratified by Georgia. Despite requests from the GTUC, the ILO, the European Union and other institutions, to amend certain articles of the Labour Code, no changes have been made to its provisions up till now. More than that, by an amendment to the Constitution of Georgia, adopted 2010; the existing Labour Code was raised in status from an ordinary law to an organic law. This means that improving it will be even more difficult, since it will require the votes of more than a half of the listed members of parliament to make any amendments to it. The most disputed articles of the Labour Code are articles 37(d) and 38(3). Article 37(d) states that termination of a labour contractis grounds fordiscontinuance of the relationship between the employer and the employee. Article 38(3) stipulates that, in case of termination of 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 enable 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 for refusing to employ a worker or for his/her dismissal. Accordingly, in case of a legal dispute, burden of proofrestson the em17

ployee and not on the employer. All this makes it possible for the employer to dismiss workers for their Trade Union, social, or political activity a practice that has become frequent during the last few years.18 According to the ILO experts, all these articles taken together create the possibility of discrimination and restrict the workers capability to protect their rights collectively: The Committee therefore trusts that the necessary measures to revise sections 5(8), 37(d) and 38(3) of the Labour Code will soon be taken so as to ensure that the Labour Code provides for an adequate protection against anti-union discrimination taking into account the principles above. It requests the Government to provide information on the measures taken or envisaged in this respect.19 As for professional associations and collective contracts, the Code provides the possibility of signing collective contracts without mentioning professional associations as such and without specifying in sufficient detail any procedures for regulating collective contracts. According to the Code, a collective contract is defined as a contract between the employer and any group of workers with at least two members. The employer has no obligation to negotiate on collective contracts even at the request of the Trade Unions. Collective and individual contracts are thereby treated equally. This can be a disadvantage for the Trade Unions. The role of the Trade Unions in collective contracts is not stipulated; in fact negotiations can be undertaken by any representative. Due to this interpretation of collective contracts, the Labour Code contradicts article 4 of 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 of the legislation on collective contracts, the employers often refuse to enter collective negotiations or to renew previously existing collective contracts. Misunderstandings regarding this issue are frequent, adding even more complications. According to article 25, paragraph 3 of the Georgian Law on Trade Unions, employers, i.e. the administrations of the enterprises, institutions or other places of work, are obliged to deduct the Trade Union membership subscriptions from the monthly salary of the employees, and to transfer it to the Trade Unions account in accordance with the provisions of the collective contract. Unilateral termination of collective contracts often results in neglecting this obligation by the employer. The incompleteness of legislation makes it complicated to fight against this practice that is becoming more and more frequent, especially in recent years. Blocking membership subscriptions often is used by the employers to undermine the Trade Unions financially. The Code substantially restricts the workers right to strike. Although guaranteed by article 49 of the Labour Code, this right is subject to various restrictions stipulated in article 51. For instance, strike is illegal if the workers have been forewarned on possible dismissal due to staff reduction. Strike also becomes illegal if 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 for such a procedure. If no agreement has been reached within 14 days, the other party is entitled to apply to court or arbitration.
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For such examples see chapter 4.

CEACR: Individual Observation concerning Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) Georgia (ratification: 1999) Published: 2010. http://www.ilo.org/ilolex/english/index.htm

CEACR: Individual Observation concerning Right to Organise and Collective Bargaining Convention, 1949 (No. 98) Georgia (ratification: 1993) Published: 2010. http://www.ilo.org/ilolex/english/index.htm Ibid 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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The ILO considers that the legislation should establish specific mediation mechanisms, involving an independent third party, to facilitate dispute settlement between the parties. The right of a party to apply to court or arbitration if no agreement is reached effectively means a restriction of the right to call a strike. Although it does not fully exclude the possibility of starting a strike, continuing to strike will become illegal as soon as there is a court decision to that end which is compulsory for all parties. It is illegal to continue a strike for more than 90 calendar days (article 49(8)). Strikes are also prohibited 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 for the protection of public interests, rather than the prohibition of strike, the minimum services provision may be demanded. Apart from purely legal reasons, there are other handicaps to labour right protection resulting from the practical deregulation of governance. The dissolution of the labour inspection created a vacuum from the point of view of controlling labour conditions. There is no recording of unemployment, and no unemployment benefits. No ministry is in charge of elaborating or implementing labour policy, or collecting and analyzing relevant statistical data. There are no specialized courts or mediation institutions for the trial of labour disputes. The abovementioned shortcomings of the legislation create an obstacle for the declared policy of European integration. Basing on the European Council Monitoring Report22 on the implementation of articles 2, 4, 5, 6, 26 and 29 Of the European Social Charter, ratified 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, article 2(1) of this charter is violated because, according to the Labour Code, the employed can agree to a contract that sets no upper limit to the number of working hours. Contrary to article 4(2) of the Charter, the Code allows for an agreement between the employer and the employee with no limit set to overtime work; moreover, the Labour Code does not provide for extra remuneration of overtime work or additional vacation in compensation for 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 foresee any kind of forewarning of workers in case of dismissal. Article 5 of the Charter is also violated by the minimum Trade Union membership requirement of too many members; a labour contract may contain a clause on non-membership of Trade Unions, there is no adequate protection against discrimination of Trade Union members during recruitment or dismissal; in disregard of article 6(2), the employer can unilaterally ignore collective contracts, and there are no provisions supporting collective contracts.

2.4. Trade Unions and International Institutions


The GTUC and international institutions are those actors who actualised labour rights promotion and Social Dialogue first of all. The Business and the Government had to react on their pressure and thus are followers, rather than initiators of the process. This chapter regards to the role of GTUC and international institutions in labour rights promotion.23 After the Rose Revolution the institutional place and role of Trade Unions in social relations has significantly changed. Unlike many other post-soviet states Georgian Trade Unions started reforming and are trying to redefine their function and operating principles and methods in order to achieve an adequate place within market economy. As a result of this transformation, Georgia is the only post-soviet country where the Government has a pro-active policy with regard to Trade Unions; this policy, as Vakhtang Lejava, Chief Advisor to the Prime Minister of Georgia, puts it, is aimed at separating the Trade Unions from the state: Of all post-soviet countries, Georgia has undertaken the most radical reforms in labour relations. On its own accord, without anybody forcing it to do so, the State tore the Trade Unions from its lap and told them to take care of themselves.24 The existence of powerful Trade Unions is important for a country in many regards. Firstly, workforce is one of the main components of economy. Protected and decent work is a precondition for the successful economic development of a country. The strengthening of Trade Unions is also one of the most important elements of convergence with the EU and an indispensable component for the Europeanization of Georgias economy and society. Powerful Trade Unions are also beneficial for Georgian business. Having a reliable partner on the other side makes it easier to conduct business. Trade Unions also facilitate the implementation of government policy: shaping macroeconomic policy is more effective if an organization representing the workers is involved in the process. In Soviet times, the Trade Unions were a powerful organization. However, past traditions only partly help them to react to the challenges they are facing at present. The Trade Unions are undergoing a complex functional transformation. Before, their function was merely a social one: from the viewpoint of most of its members, the distribution of sanatorium vouchers was the main activity of the Trade Unions. Today, the Trade Unions have to become an equal partner in economic relations. Many of the issues formerly regulated by the State now are no longer within its area of responsibility. Equal and dignified participation of the workers in economy cannot be guaranteed if these workers do not protect their own rights. This functional transformation is difficult both for the Trade Union leaders and for their rank-and-file members. The members have to realize that the Trade Union is no longer organizing vacations and entertainment. The benefits they might now enjoy in exchange for paying their membership subscription are those that were the guaranteed ones not so long ago. Moreover, just paying membership subscriptions may not even suffice for getting these benefits without personal involvement and active participation. Passivity and distrust - the remaining of the previous period - may themselves be an obstacle for success. The leaders, in their turn, have to revise out-dated bureaucratic methods of administration, meet the people and seek new ways of communication with the State and the employers. All this implies that the organization itself has to change, starting with its structure up to the forms and methods of the services it provides to its members. The authorities and some representatives of the business sector also find it difficult to understand these functional transformations. They, also, associate the Trade Unions only with the functions they exercised
23 24

22

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

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

12

Interview with Vakhtang Lejava, Head of the Advisory Group (Service) for Governance and Economic Issues of the Prime Minister of Georgia, Chief Advisor to the Prime Minister of Georgia.

13

in Soviet times. From this out-dated point of view, they cannot appreciate the usefulness of this institution. More than that, this perception hinders the progress of the Trade Unions and pulls them backward into the past. As a result, they are forced to fight in an extremely antagonistic environment that not only does not support professional associations, but in which even the need for their existence is not realized. By associating Trade Unions only with the protection of social benefits, many libertarian representatives of the Government and business sector view them as an obstacle for economic development, rather than its facilitator; they are raising the expenditures of economy, rather than contributing to the effectiveness of production. Another reason for anti-trade-union attitudes is that the GTUC is at present the only political and civil organization depending on broad membership and on membership subscriptions, in contrast to political parties and NGOs that do not have so many members paying membership subscriptions and therefore find it difficult to rely on a broad social basis. This makes the Trade Unions a potentially powerful opponent to the Government, the more so, because during recent years the GTUC managed to reverse the tendency of losing members. They also succeeded in attracting the attention of international organizations. They induced the ILO to place Georgia on their agenda, and have intense contacts with other Trade Unions worldwide. This creates problems for the Government, which is not used to coordinating its economic policy with local organizations. A broad social basis, international support, and possible influence on economic policy are the three reasons why the Trade Unions are now subject to strong political pressure. Cases of terminating collective contracts, employers refusing to collect membership deductions, exerting pressure on and dismissing Trade Union members have become frequent. 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 for any policy in support of Trade Unions development, this is completely out of the question.25. Open and hidden pressure, experienced by Trade Unions during 2010-2011 years from the side of specific public bodies and businesses, questions sustainability of their achievements. Trade Unions that have not yet completed their functional and organizational transformation, as a result of this pressure are presently struggling for survival. Thus, they are vitally interested in overcoming this pressure and having a successful Social Dialogue. Their allies in this regard are rather to be found amongst international organizations, than within the Georgian Government or business community. The International Labour Organization has been working for 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 function as an expert and consultancy institution. Being the UN agency, responsible for drawing up and overseeing international labour standards, the ILO functions by uniting representatives of governments, employers and employees in a tripartite format. Thus, Social Dialogue on a local level partly depends on the success of this dialogue on a global scale. Apart from the ILO Conventions ratified, Georgia has undertaken various other obligations envisaging the regulation of labour relations. The European Neighbourhood Policy Action Plan, a document enveloping the main directions of Georgias European convergence, directly stipulates constant efforts for providing the implementation of the standards set by the European Social Charter, providing adequate protection
25

of the rights of professional associations and complying with general labour standards in accordance with the ILO conventions ratified by Georgia.26 Even stricter obligations are connected with including Georgia into the special incentive arrangement for sustainable development and good governance the GSP+. The GSP+, of which Georgia is beneficiary, is conditional and implies that the country complies with the basic labour standards of the ILO: Georgia continued to benefit from the special incentive arrangement for sustainable development and good governance the GSP+ within the EU Generalized System of Preferences (GSP). These enhanced preferences should help to diversify Georgias export structure and improve its export performance. However, the above-mentioned, if unaddressed, put at risk Georgias inclusion in the GSP+ given that it is conditional on the countrys Compliance with the core ILO and UN conventions.27 Another area, in which compliance with the core standards in a field of labour relations is required, is the Eastern Partnership (EaP) framework. Negotiations concerning Deep and Comprehensive Free Trade Area (DCFTA) would also raise labour issues and the correspondent legislation. Georgia is also a beneficiary to the US Generalized System of Preferences (GSP), which in its turn is conditional on bringing labour standards in Georgia in line with international ones. The American Federation of Labor and Congress of Industrial Organizations ( AFL-CIO) has filed a petition to this effect to the Office of the United States Trade Representative (USTR), demanding to raise labour issues during the US-Georgian 2011 year negotiations on the prolongation of this agreement. The abovementioned obligations, alongside with the ratified Conventions, constitute the framework that makes the EU, the ILO, the US Government and other international actors outside Georgia capable of direct influence on the process. Their involvement and commitment has been repeatedly manifested in public statements as well as in practical actions. 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 of 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 of Social Dialogue, these amendments were not 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 full-righted Trade Unions to be indispensable components of a strong democracy and civil society. Accordingly, the US State Department closely
26

EU-Georgia European Neighbourhood Policy Action Plan. http://eu-integration.gov.ge/index.php?que=geo/official_documents

Implementation of the European Neighbourhood Policy in 2010. Country report: Georgia. {COM(2011) 303}. European Commission. Brussels, 25/05/2011 SEC(2011) 649
27 28

COMMISSION STAFF WORKING DOCUMENT. Accompanying the Communication from the Commission to the Council and the European Parliament Implementation of the European Neighbourhood Policy in 2007. Progress Report Georgia. Brussels, 3 April 2008. SEC(2008) 393

Ibid

Implementation of the European Neighbourhood Policy in 2010. Country report: Georgia. {COM(2011) 303}. European Commission. Brussels, 25/05/2011 SEC(2011) 649
29

14

15

watches their development in countries undergoing democratic transition. The US State Department yearly Human Rights Report is unambiguously critical about the protection of labour rights and labour legislation in Georgia30. The activity of the international community is not confined to diplomatic measures, but also involves practical development support for local Trade Unions and employers. In 2007 the USAID decided Georgian Trade Unions needed development assistance and has financed a special program to this effect, implemented in Georgia by the Solidarity Center, founded by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)31. The mission of the Solidarity Center isto help build a global labor movement by strengthening the economic and political power of workers around the world through effective, independent, and democratic unions. The Solidarity Center pursues this mission in many regions of the world including post-communist countries. The Solidarity Center had workedwith the Georgian Trade Union Amalgamation, the predecessor of the GTUC, and with an independent teachersTrade Union from 1998-2001. In late 2006, it again began working in Georgia with the GTUC, conducting train-the-trainer programs, funded by the National Endowment for Democracy (NED). In early 2008, the Solidarity Center opened an office in Georgia and has continued conducting seminars for GTUC-affiliates members and provides consultancy services to assist Trade Unions to reform and become more professional in playing its role in a pluralistic society with a market economy. For years, the Friedrich-Ebert-Stiftung (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 Confederation (ITUC)32. For instance, with expert support from the Confederation, the GTUC reformed 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 filed a request to the European Commission to begin an investigation on violations of Labour Conventions and discrimination of Trade Unions in Georgia.33 This investigation was supposed to be conducted within the GSP+ framework since the conditions of this agreement imply assuring compliance with these Conventions. The Pan-European Regional Council (PERC) of 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 future. The PERC laid down the conditions the member states shall request from the Government of Georgia: The Labour Code of 2006 must be brought into line with ILO core labour standards Conventions if Georgia is to live up to its international commitments to respect workers basic human rights. The Labour Code needs to be modified in close consultation with the ILO as well as workers and employers organizations, on the basis of the Tripartite Agreement signed on 16 December 2008 to bring the national legislation into line with international labour standards and expand cooperation with the ILO. All the attacks on GTUC structures and interference into union affairs must be stopped. The govern30

ment must intensify its efforts to actively prosecute cases of anti-union discrimination and increase the penalties to an adequate level. The government must effectively promote collective bargaining in the public sector and fully recognize workers right to strike by allowing strikes also in conflicts of interests. The government should reinstate the labour inspection service to make certain that labour law applies 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 transforming over time. In 2005, when the new leadership of 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 reforms and the activities of the Trade Unions, to a certain extent, developed in a parallel mode, without polarization. At this stage the GTUC concentrated on reforming its own activity, improving its public image, educating new leaders and renewing its activity. A new feature of this policy was transparency and the attempt to find its own niche in public life. Since 2006, the GTUC leaders did not hesitate to make public critical statements on new labour legislation; they started organizing public May-Day demonstrations, and participating in civil society activities. This development was very different from the previous period when this kind of activity was only typical for NGOs and the newly established independent Trade Unions - those grassroots organizations that emerged after the soviet era. Initially, the tactics of the GTUC public activity was advocacy, rather than pressure. So, the GTUC attempted to improve labour legislation by initiating dialogue with the Parliament. This was the first time that the Trade Unions relied on the great number of its members when in 2007 it initiated a bill in the Georgian Parliament on introducing unemployment benefits, signed by 40 thousand persons.35 Later on, there were several other cases of submitting bills to the Parliament by the Trade Unions, including an appeal to revise the most discriminating articles of the Labour Code in 2009, this time with 100 thousand signatures. All these initiatives failed. At the same time, the Trade Unions faced serious challenges. After the adoption of the new Labour Code, bargaining with employers, including the renewal of collective contracts became more complicated. Radical reforms undertaken in various spheres during this period brought on massive dismissal of personnel and revision of qualifying requirements. The motivation for recruitment or dismissal often was unclear or discriminating. Especially in the education sector where the Government refused to renew collective contracts the situation became very difficult. The renewal of collective contracts was also considered unfavourable for attracting potential investors to those state enterprises, which were identified for privatization. All this required the activity of Trade Unions, for which they were often unprepared.
34 35

Country Reports on Human Rights Practices 2010, U.S. Department of State. http://www.state.gov/g/drl/rls/hrrpt/2010/index. htm Web site: http://www.solidaritycenter.org/ http://www.ituc-csi.org/

31 32 33

Request for Investigation into violations of Core Labour Standards in Georgia under the provisions of the GSP regulations No 732/2008 of 22 July 2008. ITUC/ETUC. Brusseles, 6 June 2011.

Ibid, appendix 4.

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

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17

Under these circumstances improving of the Labour Code and the protection of workers rights as well as strengthening the role and position of the Trade Unions became a key issue by which the GTUC, with the aid of international institutions and the European Union, attempted to clarify their relations with government agencies. Placing the problems of Georgia on the agenda of international organizations first of all, on the ILO agenda meant going beyond a strategy of advocacy, and exerting pressure on the Georgian Government. At least this was how it was perceived by the authorities. This strategy of pressure did not fail to bear fruit. Several appeals to the ILO resulted in activating this organization with regard to Georgia and addressing a letter to the Ministry of Health, Labour and Social Affairs. After the ILOs appeal to the Ministry and the appointment of a new minister (A.Kvitashvili) in 2008, some hope arose to find a dialogue approach to the disagreements accumulated between the Trade Unions and the authorities. A Tripartite Group was established in 2008. A Memorandum of Understanding underlying the creation of this Group was signed by the Ministry of Health, Labour and Social Affairs, the GTUC and the Georgian Employers Association (GEA). The latter, at the time, was already closely cooperating with the ILO, representing the interests of the employers in labour-related issues. The main topics on the agenda of the Tripartite Group during 2009 were amendments to labour legislation, although the memorandum envisaged a possibility of considering other issues as well (such as pension reform, insurance for unemployed. etc.). By Trilateral Agreement, in order to make the Tripartite Dialogue more effective, an action plan was elaborated according to which: The social partners meet biweekly in order to consider the current socioeconomic 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 initiatives on social and economic issues are considered; both legislative and practical measures are elaborated for ensuring progress in the effective application of 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 conditions and standard of living. The decisions made within the scope of the dialogue would take the shape of recommendations to be taken into account by the Government.36 It was a result of this intensive work that, during a meeting with the executive director and the administration of the ILO at the ILO conference 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 of 30 topics previously agreed upon by the parties. Although, after returning to Georgia the Government backed out and the agreement was not put into practice. The promise given by the Minister was apparently not sufficient for the Georgian Government to revise its position. In order to break the deadlock, on initiative of the GEA, the parties decided to lay aside the Labour Code issue and engaged in institutionalizing the Tripartite Commission and elaborating its statute. Thus, the decision of 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 fixation of achieved progress.
36

The Tripartite Round Table, attended by the ILO representatives, agreed to carry on the cooperation between the ILO and the Government, and exchange ideas and opinions on labour legislation between the Government, the employers and the GTUC, within the framework of the Social Dialogue. Furthermore, it was agreed to establish a Secretariat in order to ensure an effective conduct of the dialogue. On November 12, 2009, a decree of the Prime Minister was issued on the establishment of a Tripartite Commission. The elaboration of the statute of the Commission was then carried on within a working format. The commission was established under the Ministry of LHSP and allocated with advisory powers. On March 2, 2010, also by decree of the Prime Minister, the composition of 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 of 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 of the meetings. Despite the fact that the Commission was designed to bring on an agreement on the Labour Code and to ensure better representation and more legitimacy of the format of work conducted in this field, the main topic of discussion on the agenda of the very first meetings of the Commission were the appeals to the ILO and the European Union filed by the Trade Unions. The Government demanded to stop appealing to international organizations and consider all problems within the Commission. Initially the chairman of the Commission indeed made some steps towards solving the most acute problems facing the Trade Unions. He acted as a mediator appealing to the Ministry of Education and tried to settle the situation in the Georgian Railway.37 However, on the whole, the meetings of the Tripartite Commission soon looked like senseless repetition of already declared positions. With time, the meetings
37

Trilateral Agreement, October,31, 2008. http://gtuc.ge/ka/pressandpublications/88

In more details about these Sectoral dialogues see in chapters 4.1. and 4.2.

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became less and less frequent. According to the statute, the Commission should meet at least quarterly. However, by the end of 2010 GTUC had been complaining that the process has been frozen. No such meeting was held during the first half of 2011. At the same time, as a response to Trade Unions activities after 2010, the Government started exerting pressure on the Trade Unions. In schools, where the number of Trade Union members was the highest, the automatic deduction of Trade Union membership subscriptions was terminated. The inability to collect membership subscriptions in this organization and in others as well created serious economic problems for 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 of a collective contract. In some cases, contrary to the legislation requirements, the employer attempted to demand a notarization of the signatures. Although the practice of collecting membership subscriptions by the employer has both positive and negative sides to it,38 the refusal from the employers side to automatically deduct Trade Union membership subscriptions was a heavy blow to the Trade Unions. Collecting membership subscriptions via bank transfer is connected with very high operational costs apart from being complicated from the organizational point of view. Every transaction costs from 50 Tetri to 1 Lari which in some cases is almost as much as the membership fee itself. Moreover, the membership subscription deducted from the monthly salary, in case of bank transfer, is calculated not as 1% from the salary, but from the actual amount transferred to the bank, i.e. from net salary with income tax deducted. To request transferring the membership subscription, every Trade Union member has personally to fill in a request form at the bank, and this has to be done every year. The banks are not able to deduct the subscriptions automatically from the transferred salary, so it sometimes happens that at the moment when the membership subscription has to be deducted, there is no money left on the account. Different organizations have contracts with different banks on the transfer of salaries, so the Trade Unions have to deal with many banks. Initially, the banks refused to transfer membership subscriptions to the Trade Unions under the pretence of not being equipped with the necessary software. Later on, this problem was solved, but in many cases it is still not possible to organize the transfers. By the middle of 2011 the situation seemed to stabilize. In June, 2011, the meetings were resumed after a half-year break; since then they became even more frequent (the effectiveness of these meeting nevertheless remained questionable). Although, the August events in the metallurgical plant ,,Eurasia Steel in Kutaisi once more put Social Dialogue perspectives under question. The role of local authorities and police in the dissolution of the plants workers strike cannot be interpreted other way as one-sided and illegal support to the employer against workers.39 The fact that, despite the request from the GTUC, the Tripartite Commission failed to provide its opinion on a law violation may cause further erosion of trust towards it. Taking into account the present situation, it can be said that the establishment of the Tripartite Commission should not be understood as a change from a policy of mutual ignoring and confrontation to the dialogue between social partners. To date, these relations are based on the principle of the balance of powers rather than on a foundation of mutually beneficial cooperation. The main achievement of the Tripartite Dialogue is, maybe, the existence of the dialogue as such and the
38

future 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 of a worsening of the situation and its transformation into radical confrontation. On the other hand, the absence of positive results and the deceleration of the process indicate a danger of its failure. Taking into account the different expectations and strategic goals of the parties with regard to the dialogue, this danger becomes very real. The Trade Unions are the party most interested in the success of the dialogue, which is of vital importance for them. Although the Trade Unions have started the process of inner reforms and transformations, they are, as yet, far from reaching a stable position, in which their institutional existence would not be endangered. They are forced to play a difficult balancing game between the workers and the rigid employers in an environment of extremely unfavourable legal regulations and ill-wishing. To quote Jon Elster once again, they have to rebuild the ship not only at sea, but during a storm. The only alternative to improving the legislation in the process of dialogue available to the Trade Unions would be adopting a more radical approach; however, taking into account the existing polarized political context, their resources for doing so are rather limited. Contrary to the Trade Unions, the Government is interested in dragging out the dialogue without achieving 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 for Social Dialogue, the Government regards it as a means to channel workers protest. The Employers Association, representing the interests of 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 powerful business actors, are only indirectly involved in the work of the Commission and represent interests that are, to a certain extent, different from those of the Employers Association. From the point of view of the latter, the Tripartite Commission should not be primarily oriented on considering the regulations of the Labour Code; instead, it should also engage in sorting out other problems as well like, for instance, the pension reform, employment policy, professional retraining, unemployment insurance systems, etc.40In their opinion, even small progress in connection with any of these issues would be a clear demonstration of the usefulness of the Commission. By the end of 2011 the prospect of continuing the Tripartite Dialogue seemed rather vague. Due to lack of result in the dialogue, the issue was again transferred to the international level. The partner Trade Unions, the ILO and other international actors try to achieve concrete results with regard to the improvement of labour relations, stopping the discrimination of Trade Unions and increasing the effectiveness of Social Dialogue. At the same time, Trade Unions of other countries provide financial support to the GTUC till it manages to sort out its financial problems.

2.5.2. Social Dialogue at the Sectoral and Company Level


Although at the national level there has been no improvement of the legislation as a result of Social Dialogue, at the level of 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 of previous contracts. In 2011, however, it became clear that the progress was lacking a sustainable foundation.
40

This procedure of collection makes the names of Trade Union members known to the employers; exposure of the workers personal data enables the employers to exert additional pressure on Trade Union members. In more details about this events see in a following sub- chapter and in a sub-chapter 4.3.

39

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

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21

This progress was made possible by the well-balanced application of new tactics adopted by the Trade Unions. The 2010 strike at the metal plant in Zestafoni resulted in signing a collective contract.41 This induced 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 successful. As a result, some of other employers also revised their position: for instance, this happened at the Tbilisi Water and the Azot Plant whose proprietors initially refused to sign collective contracts. However, this improvement was mainly confined to heavy industry companies. From this experience, the Trade Unions learned two lessons: firstly, an effective strike is a part of the Social Dialogue and not its alternative; and secondly, a large Trade Union operating in an out-dated fashion might prove useless whereas a relatively small, but well-organized and motivated organization may achieve its goal even if a greater part of the employees remains passive. Combining strike and dialogue instead of regarding them as alternative solutions puts the relations between employers and employees in a totally different light, by replacing old Soviet stereotypes based on the practice of democratic centralism, according to which the powerful state/employer would listen to its citizens by its own good will, retaining, however, the sole authority of the final decision. Protest and autonomous action were regarded as insubordination and not as a part of 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, for instance, the strike in Poti, failed.42 To induce the employer to change his tactics and switch from ignoring to dialogue, the Trade Unions must be able to carry out rational and well-planned actions. The successful strike at Zestafoni was the first one to be conducted in full accordance with the new labour legislation. It started with a warning strike followed by a written proposal for a dialogue. The employers, in their turn, made a tactical move: 2 days after the calling of the strike the strike committee received a letter 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 forced to concede to negotiations that ended by signing a compromise collective agreement. The strikes have been successful only if they were just episodes of labour rights protection by Trade Unions, rather than its main part or an end in itself. 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 of this kind of tactics old-fashioned and passive Trade Unions, who were used to a conflict-free style of 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 of a yellow Trade Union also existed at the Zestafoni plant, but a newly established and far less numerous organization was very efficient in competing with it.43 The success of the Zestafoni strike was predetermined by a number of factors. Firstly, the branch itself has
41 42 43

a tradition of Trade Union activity. In heavy metal industry wages are low even for high-skilled professionals; at the same time, a crucial role is played in the branch by high-skilled professionals 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 confederation and who received advice from foreign colleagues. Thus, this case might be considered an example of the efficiency of professional solidarity. The success inspired Trade Unions to repeat the experience in August 2011 in Kutaisi, but this time they faced quite a different response. Their tactics of strike, conducted with the scrupulous following of the law regulations, was confronted with mere violence. Workers of the metallurgical plant ,,Eurasia Steel , who formed a Trade Union and went to strike, demanding better working conditions, were threatened and many of them arrested by police.44 The Trade Unions leaders were dismissed from their jobs. Some of them were later returned to their working places in exchange to promise to refrain from the Trade Unionist movement. The police reportedly was involved in forcing workers to return to their working places. Such development pushed the process of dialogue back to the confrontational logics. It demonstrated that even the restricted rights, provided by the Labour Code were not observed in effect. It also demonstrated 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 of authorities and employers. Apart from this, it brought to the fore the political considerations. Given the polarized political context, the political environment may have decisive influence on a success or failure of GTUC efforts. It may be because the strike in Zestafoni preceded the local elections of 2010 that the authorities refrained from using violence. If so, the GTUC has to revise its tactics accordingly. The Sectoral level is a much emptier field for Social Dialogue. This has both objective and subjective reasons. At this intermediary level, there are almost no business associations who might represent the interests of the business sector in the dialogue. Accordingly, except public sector, where the State is an employer itself, no Sectoral Trade Union has a vis--vis, representative for Sectoral interests of employers. In addition, the State does not support tariff policies, which would be impossible to implement anyway, due to the absence of governmental Sectoral development policies. Thus, if Sectoral Trade Unions attempt to enter a dialogue with the corresponding ministry, this attempt is facing serious obstacles from the very beginning. However, there are many issues outside the scope of tariff regulations that require Sectoral dialogue. For instance, in the Healthcare Sector, a structure which regulates a profession is subordinated to the Ministry, so the Sectoral Trade Union that is seeking the possibility to protect the interests of 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 active Sectoral union.45 The public servants Sectoral Trade Union has relatively constructive relations with regional self-governance institutions, while within the ministries there are no Trade Unions left. However, due to the absence of a relevant structure within the Government and the absence of professional standards for public servants, the Trade Unions have no partner for dialogue. As contrasted with these sectors, in branches like, for instance, the energy sector which is completely commercialized, Sectoral Trade Unions are oriented entirely towards dialogue with the corresponding companies.

About the strike see also chapter 4.3. See chapter 4.4.

It is important to make distinction between yellow and independent Trade Unions. On this issue see also the research paper "Trade Union Movement in Georgia". Transparency International Georgia. February 2010.

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See also chapter 4.4. For more detail on the relations between the teachers Trade Union and the Ministry of Education see chapter 4.1.

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3. Parties involved in
3.1. Trade Unions GTUC

the Social Dialogue: Trade Unions, Business Associations, Government


The main professional confederation in Georgia is the Georgian Trade Union Confederation (GTUC). The Georgian Trade Union Confederation unites 22 organizations (two regional and 20 Sectoral organizations). By 2010 year it had 235 824 members, of which 142 365 regularly paid their Trade Union membership subscriptions.46 The GTUC is the hereditary successor of the Soviet Trade Unions (Georgian Trade Union Amalgamation) and owns a small part of the property formerly belonging to this organization.

to the traditional vision, Trade Unions should carry out purely social functions, care for the well-being of its members and assume a petitioner position towards the employer. The new vision requires viewing a Trade Union member as bearer of not only social, but economic interests, which implies not functional subordination, but an equal position with regard to the employer, bargaining, negotiation and sometimes confrontation. This change, resulting logically from the transformation of the economic system, is a serious challenge both for Trade Union leaders and rank-and-file members as well as for the society on the whole. Like any institutional transformation it is connected with a new style of role behaviour, a transformation of expectations, and entirely new conduct of activities. The most important change, which is difficult for the society to realize, is that rights and benefits that were taken for granted in the past now require ceaseless effort to be achieved. It is no longer sufficient to delegate representation powers to the leaders. At the same time, there is no tradition and only limited practice of solidarity action. At a company level, during this transformation, the Soviet Union and the new system coexist parallel to each other.48 In old, big enterprises there sometimes still exists a numerous yellow Trade Union which is dependent on the employer. However, as a rule, such organizations are weak, do not enjoy authority, and easily break up with the change of the proprietor. Trade Unions of this kind are mainly focused on providing social assistance and have stronger ties to the employer than to their own members. As opposed to these unions, organizations of a new type are, as a rule, less numerous, their relation with the employers is more tense; however, they enjoy more authority among the workers. The main challenge for the Trade Unions of the new type is to gain confidence of the workers and activate them. Voluntary membership subscriptions are the main source of income for Trade Unions. Consequently, the leaders are rationally interested in increasing the membership of the organization and providing services to the members; otherwise, they would run the risk of bankruptcy. Apart from paying membership subscriptions, the members should be prepared for public activity; otherwise, the leaders are exposed to the threat of dismissal, falling under the influence of the employers, or replacement. All these problems become even more difficult to solve due to the passive, fearful and inert behaviour, typical for a big share of workers. Mental transformation, the ability to view events in a long-term outlook, is often named by Trade Union leaders as the key element of success. Most workers have no confidence in solidarity action, they are not prepared to take risks and usually assume a wait-and-see attitude. Even if they sympathize with the undertakings of the leaders they prefer not to express this publicly partly out of fear to lose their job, partly under the influence of old stereotypes and partly out of hopelessness. This passive attitude is also due to the social anomie typical for the post-soviet society and the absence of social institutes that would ensure representation and the stability of contractual relations. Another problem of no less importance is the lack of leaders. The same dilemmas that the workers are facing also affect the leaders. Many are not used to working in a new environment; many prefer to try to the last to retain their habitual relationships with the employers, until its too late. Rank-and file members often have their claims to the leaders and vice versa. All this is changing overtime, though, maybe, changes need to happen faster if Trade Unions are to survive in a new political and economic environment. The promotion and propaganda of relevant ideas and values in the Mass Media and in the civil society could substantially foster the functional transformation of the Trade Unions. Opportunities for such pro48

3.1.1. Functional Transformation


Although a fundamental reform of the Trade Unions started only a few years ago, new tendencies in the Trade Union movement and its involvement into the overall process of transformation began much earlier, already during the Soviet period. However, these early transformations did not result in substantial institutional changes, so that by 1997 when the Law on Trade Unions was adopted, the main forms of activity of the Trade Unions did not contain any serious innovations. Both functionally and structurally Georgian Trade Unions remained a bureaucratic organization scarcely involved in the social processes developing in the country. The situation began to change after the Rose Revolution when, as in many other organizations, the leadership of the Trade Unions changed. The new leadership had gained experience of participation in the revolutionary movement and were driven by an ambition to create a new type of organization. In this aspiration they were aided by international actors who advised them, providing access to western experience and supporting them in critical situations both morally and financially (e.g. the Solidarity Center, the Friedrich-Ebert-Stiftung (FES),, the International Trade Union Confederation etc.). These joint efforts yielded some results. The public rating of the Trade Unions grew slowly, but fairly steadily. In 2005, 17% of respondents displayed a positive attitude towards the Trade Unions; by 2011, this number increased to 26%. 47 Despite changes, Trade Unions have not yet reached that level of functioning which would adequately correspond to the needs of society. The main challenge they have been facing during this process of transformation is the existence of two paradigmatically different visions within Trade Unions. According
46 47

http://gtuc.ge/ka International Republican Institute, http://www.iri.org/explore-our-resources/public-opinion-research/public-opinion-polls

Gocha Alexandria, Deputy Chairman of GTUC, interview.

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motion are very limited however, because Trade Unionism is still associated with the Soviet past in the public discourse, and therefore considered non-prestigious. The media is, to a great extent, alienated from the daily problems of the society.

3.1.2. Organizational Structure and Finances


The transition from a bureaucratic-nomenclatorial style of management to new methods of leadership also required renewing the organizational structure of the Trade Unions. Since Trade Unions were mostly reformed from previously existing organizations, their organizational structure often is not adequate to the new challenges. In 2005, the previously existing organization was transformed to the Georgian Trade Union Confederation. In the process of this transformation, many Sectoral unions that had no more members were closed down; instead, others were created for the representation of small economic subject employees. Regional division was introduced. Not only Sectoral Trade Unions, but the regional representatives of the confederation are in charge of the problems of the regional members. With time, the property disputes existing previously between the State and the Trade Unions were sorted out. The primary organizations (unions) existing on the enterprise level usually are not independent legal entities. There are some exceptions to this rule; for instance, some of the primary Trade Unions in the metal industry or the service sector are registered as independent legal entities. However, the primary organizations are entitled to elect their leaders and to bargain autonomously on collective contracts. They are subordinated to the Sectoral unions either directly or they create joint committees allocated with more governance power at the intermediary level. Such practice is useful in numerous unions, for instance in education. Such structure may not be well fitting for the new reality. As a matter of fact GTUC is doing better in representing the employees of bigger enterprises, where a tradition of Trade Union activity exists. While in the service sector, where small and medium enterprises prevail, it is more difficult for the GTUC to create primary organizations and attract individual members. They do not have any mechanism for collecting membership subscriptions from the unemployed. Consequently, this category is a priori excluded as a potential social basis for the Trade Unions. The Trade Unions also have not developed any effective mechanism for representing family enterprises (agriculture), which accounts for more than half of the working force in the country. This tri-level structure of the GTUC (primary union, Sectoral Trade Union, confederation) has both positive and negative sides to it. Being closely integrated into a bigger organization, primary unions are more protected from a possible pressure of the employer. In case of need they have more resources at their disposal, since the whole organization is coming to their aid. In a non-friendly legal and politicized environment, a certain hierarchy may be a good guarantee against weak links within the organization which might be used by opponents for weakening and subduing of the entire organization. At the same time, the existence of a rigid structure weakens the potential of the GTUC for cooperation with smaller independent Trade Unions and professional groups often spontaneously emerging around specific problems or needs. It can also hinder the creation of Trade Unions in sectors where small enterprises prevail, especially in the service sector. The networking character that has become typical for many branches since the transition to market economy requires from the GTUC to seek new ways of reform-

ing its internal organization. A more flexible internal structure, diversification of cooperation methods may increase the representative potential and the sustainability of the confederation. Membership might not be the only way of attracting employees of various enterprises. Thematic cooperation, diverse forms of informational communication, a more pro-active attitude towards employees of enterprises which at present are not members of the confederation, and introducing new methods of management might contribute to the renewal and strengthening of the organization. The budget of Sectoral Trade Unions is constituted from membership subscriptions (1% of the salary), and the confederation budget from charges on these sums, which was increased from 5% to 10% since 2007 and is also supplemented by lease of property. In the course of reforms the collection of membership subscriptions was centralized at the Sectoral level, and a more transparent and strategic administration of these sums was introduced. The main bulk of these sums come from relatively numerous Sectoral Trade Unions, such as, for instance, teachers Trade Union and the railway Trade Union. Failing to sign collective contracts by these Trade Unions and the obstruction of centralized transfer of membership subscriptions resulted in decreasing the GTUC budget by 65%.49 In addition to its main income the GTUC also gets regular or one-time financial aid from various organizations, such as the ILO, the Friedrich-Ebert-Stiftung, the International Trade Union Confederation, the Solidarity Center, individual Trade Unions from different countries (through the ITUG Solidarity Fund), the Polish Solidarity. This aid is provided in the form of (targeted) program financing or as a grant.

3.1.3. Action Strategy and Tactics


At present, the Trade Unions have to react to current challenges; the next one or two years will decide whether they manage to survive and retain independence, or the government policy in fact eliminates them or subdues them to government control. In order to live up to these challenges, the Trade Unions engage in a combination of various public activities: mass rallies, press conferences, seeking support from international organizations and, lately, calling strikes. Due to the existing situation the Trade Unions cannot afford to rely on the improvement of legislation and respond to the challenges of an unfavourable environment by reactive action. Proactive policy is a precondition for their survival. This, in its turn, requires working out strategies with regard to the following problems: expansion of the social basis, defining the framework of political action, elaborating the content substance of Social Dialogue. Approaches to these problems can be considered in terms of strategy and tactics. For the sake of convenience, possible strategic viewpoints can be positioned along an axis uniting two poles: the strategy of narrow action versus the strategy of broad action. The strategy of narrow action is less ambitious and less politicized. It implies: strengthening existing unions on a company level and establishing new ones wherever possible; signing more and better collective contracts; highlighting legislative issues in the Social Dialogue and demanding improvement of labour legislation while keeping at a distance from political opposition and protest movements. The strategy of broad action implies adopting a more pointed political position: shifting from narrow Social Dialogue to broad Social Dialogue, which would mean to shift focus from labour legislation to49

Interview with Irakli Petriashvili, Chairman of GTUC

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wards the policy of economic development and state-economy relations; intensifying dialogue with political parties and the civil society with the aim of promoting the Trade Unions own agenda; representing interests of a broader mass of workers, implying, among others, the representation of pensioners and agricultural family workers and protecting the interests of the unemployed. Both strategies have their strengths and weaknesses. The strengths of a narrow strategy are: y It is adequate to the existing resources, experience and practice; y It is less risky; y It has clear legislative goals and is therefore more likely to be supported by international organizations. The weaknesses of a narrow strategy are: y There is a risk that the Trade Unions may become the representatives of a narrow range of workers and this will be used to antagonize them with the rest of the population who will consider their activity as a protection of privileges for currently employed minority; y If the position of the Government remains rigid which is to be expected in a long run, the Trade Unions might not be able to resist pressure and improve labour legislation and might lose their independence; y The success of this strategy depends to a great extent on the pressure exerted by international actors; this weakens the democratic potential of the Trade Unions. The strengths of a broad strategy are: y The commitment of the Trade Union movement to peoples interests will become more clear and comprehensible for the society; this will increase the authority of the Trade Unions and facilitate the broadening of Trade Union membership; y The Trade Unions will fill a niche which at present is practically unoccupied; y More bargaining power with partners and opponents, including political parties and business associations; it will be possible to reach tactical agreement with the latter on economic issues within the framework of Tripartite Dialogue. The weaknesses of a broad strategy are: y The Trade Unions are lacking human resources, especially experts and leaders capable of participating in discussions on economic issues; the Media, political parties and nongovernmental organizations mostly have different agendas; accordingly, it may become difficult to rely on outer resources; y The present organizational structure of Trade Unions does not provide ways for incorporating broader social circles; y Danger of radicalism and excessive politicization. On the tactical level, the actions of the Trade Unions might combine two different poles: advocacy and pressure. Advocacy implies attaining the targeted goals by influencing public opinion; pressure means reaching the same goals through changing the balance of powers and bargaining. Combining two different tactics and two different strategies gives us four possibilities:

Table 1. Action plan choice matrix for Trade Unions

Narrow Advocacy Pressure 1 4

Broad 3 2

It is also possible to assess these four options separately: Advocacy combined with a narrow strategy: would imply returning to the old role of the Trade Unions, a return to the past. In the long run, this will cause a weakening of the Trade Unions; 2. Pressure combined with a wide strategy: in case of success, this would influence the development course of the country; however, at present the Trade Unions do not have at their disposal the necessary resources; 3. Advocacy combined with a broad strategy: an approach that would allow to reach goals in a longterm perspective; 4. Pressure combined with a narrow strategy: an approach for reaching short-term and relatively modest goals. If the option 1 is eliminated as undesirable and option 2 as presently impossible, this leaves the Trade Unions with a choice between the two remaining action plans; the organization itself must decide which of the two to choose or how to combine them. Since the choice of the best action plan at a certain stage may be dictated by the current situation and balance of powers, it would be desirable for the Trade Unions to be prepared for using both these plans; this requires strengthening the necessary resources and connections. 1.

3.1.4. Trade Unions and Political Parties


At present, the GTUC leaders constantly stress their standing clear of any influence of political parties, especially during public actions. Public actions organized by the Trade Unions and by political parties never coincide; the Trade Unions do not join political rallies and, as a rule, prohibit political parties to attend Trade Union demonstrations. The few exceptions, as, for instance, the 2011 action of fixed-run taxi drivers, reveal a conflict between the strategies of the Trade Unions and the political parties. Such approach has positive effect on the independence of the GTUC, but may reduce influence of GTUC on parties policies and their agenda referring to labour relations. Cooperating with political parties and fostering their interest in the problems of Social Dialogue would broaden its social basis. This paragraph will focus primarily on the possible ways of cooperation with the oppositional parties. Since the National Movement, being the ruling party, is supportive of the governmental policy, it is of less interest to consider this party separately; relations with the National Movement should be viewed in a wider context of dialogue with the authorities. Refraining from partisan politics and claiming an apolitical position is far a different thing. Providing an electoral support for political actors and participating in rallies that claim policy change are essential elements of Trade Unionist movements. While keeping its autonomy, the GTUC has to consider political action as an important element of its mode of operation. The central point of this activity may be linked to

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the periods of elections. Political actors, being that the ruling party or the opposition, in this period may become more eager for cooperation with the mass organization, representing the essential interests of a large group of the population. Political parties have very unequal access to power in current Georgia. There is established a dominantparty system, in which one, ruling party, gains all leverages of influence over politics, including administrative resources, while the opposition is divided and weak. The enduring existence of this system does not prove its stability. Given the high polarization and public discontent, it is ripe with the risk of sudden breakdown, which would mean the collapse of the existing regime as well. The middle ground between the Government and the opposition, however narrow it may be, is occupied by several moderate parties that are mostly represented in the parliament. This situation may be seen as a linear choice between cooperation with the ruling authorities versus cooperation with the opposition. Seen from this perspective, interests of Trade Union members may be negotiated with the Government in exchange of refraining from cooperation with the opposition. Such logics may bring Trade Unions close to the moderate parties. One can identify some signs of such closeness indeed. For instance, it was the Christian Democrats who supported the demand of the Trade Unions to participate in drafting constitutional changes in 2009. The Commission consulted the GTUC on these topics since some amendments drafted by the governmental Constitutional Commission directly affected labour rights. Seen from the perspective, presented in a two-dimensional matrix of possible choices (see table 1, chapter 3.1.3.) the situation becomes far more complex. The moderate position is associated with the advocacy on labour issues and looks as the weakest choice among possible solutions. It does not provide for real autonomy from the Government, leaving Trade Unions with the insufficient bargaining power as well. Two other modes of action- advocacy regarding broad agenda of social development either pressure over specific labour related issues- provide for a broader choice of possible political partners. Those parties, which prefer direct political actions as a main method of political activity may cooperate with Trade Unions on concrete labour issues, increasing their support within the protest-oriented society. Other parties that are inclined to develop their representative capacity through party program elaboration may be interested in taking on an agenda of labour interests within their manifestos. Depending on what strategy and tactics become prior for the Trade Unions, they can cooperate with political parties in specific cases and around specific issues. This cooperation may be shaped differently; in any case it is necessary to deepen the channels for this kind of cooperation. Political actors most interested in advocacy might, first of all, appreciate an exchange of information. Those who adhere to a strategy of pressure may rather see mass actions and protest rallies as a form of cooperation. Both may fit into the action strategy of the Trade Unions. In both cases it is important to activate these mechanisms before, rather than after elections. Given the tense and unstable political climate of the country Trade Unions may expect maximum gains during the electoral campaigns, rather than in between the elections.

3.2. Business Associations


3.2.1. The Georgian Employers Association
The Georgian Employers Association (GEA)50 represents the interests of the business sector in the Tripartite Commission. The Georgian Employers Association was founded in 2000 as a non-governmental organization. It engaged in a broad range of activities in 2005-2006, after joining the International Organization of Employers (IOE) in 2004 and becoming its official partner. It also gained recognition from the ILO. The GEA represents Georgia in these organizations. Several hundred companies are involved in the activities of the GEA. The core of its members is mediumsized private businesses; about 60% of enterprises of this type are members of the GEA. Some big companies, including state enterprises, are also members. There are almost no small enterprises among the members of the GEA. Member organizations pay membership subscriptions dependant on the company size. However, apart from member companies, the Association cooperates with other enterprises as well both on a regular basis and in connection with specific activities. The GEA is located in Tbilisi and has branches in the regions: Batumi, Poti, Telavi, Gori and Kutaisi. The Association provides the following services to its members: legal aid, lobbying, business forums, exhibitions and training. These activities are carried out partly with support from EU and European states governmental programs.51 The GEA priorities imply the protection of economic and legal interests of its members. Specifically, these interests are connected with the following social and economic issues: y y y y Social Dialogue Employment policy Work safety and protection Social protection

This orientation is an advantage for the participation of GEA in Social Dialogue. For many years, the organization has been involved in elaboration and discussion of labour legislation; it is experienced in working on the abovementioned issues and has a good understanding of the role and importance of labour relations for economic development. However, it is a drawback for the organization that a majority of its members are medium businesses; this diminishes the degree of its representativeness. The role and place of the organization in Social Dialogue is determined by the mere existence of this dialogue, rather than through conscious economic interests of its members. Both objectively and subjectively, the interest of medium-sized economic subjects in Social Dialogue is low. Medium-sized businesses do not as yet fully comprehend the necessity of dialogue since the practice of employment does not imply it. The relations between the employer and the employee are mostly of a direct, informal character and often based on friendship or family relationship. In this situation establishing Trade Union or holding formalised dialogue do not fit into the institutional framework of existing
50 51

Web site: http://www.employer.ge/portal/alias__GEA/lang__ka-GE/tabid__2781/default.aspx See the web site for the list.

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real relations. The employers are more interested in complying with their legal obligations and sort out their work contracts, to get legal advice and avoid unforeseen sanctions. Accordingly, the function of the employers organization is to promote better understanding of the existing legislation and the potential benefits of Social Dialogue among its members, rather than sorting out problems arising from the existing conflicts. The Employers Association is promoting the idea of Social Dialogue among its members. Bigger Companies, especially former state enterprises, join this process more easily. They have a better understanding of the benefits of collective contracts. Recent examples of strikes motivated them not to wait for the development of events and take timely preventive measures by signing contracts and negotiating with the Trade Unions. In some cases, constructive dialogue with the employees helps top managers of big companies to deal with drawbacks in medium-level management and the insufficient competence of managers at this level. However, much depends on the attitude of the proprietor and the manager of the company. The issue of ensuring representation of big business companies in the Tripartite Commission was raised by the American Chamber of Commerce in Georgia (AmCham) in 2009, after signing the agreement on the establishment of the Tripartite Commission. In the same year, an association of big Georgian business companies, the Business Association of Georgia (BAG), was established; later on, with the support of AmCham and BAG, this was followed by establishing the Small and Medium Enterprises Association (GSMEA).52 In order to increase representation in the Tripartite Commission, two of the five members representing the business sector in the Commission were chosen from the members of the Business Association of Georgia. At the same time, in order to avoid a conflict of interests, a memorandum was signed between the Employers Association and the Business Association on the division of areas of interest. The Association of Big Taxpayers assumes a leading role in the representation of fiscal interests of the entrepreneurs, whereas the Employers Association curates employment issues. Such a division of areas of influence facilitates Social Dialogue and adds legitimacy to the decisions taken within it. At the same time, it limits the possible manoeuvring area of the Trade Unions. Implying a restriction of the content substance of Tripartite Dialogue, it thereby deprives the Trade Unions of the possibility to consider employment in a broader context of economic policy, within which work and capital could reach compromise agreements they would jointly defend against the state. Due to the abovementioned four priorities set by the GEA, it understands views of the Trade Unions better than the Business Association of Georgia which totally shares the Governments position. The Employers Association is interested in broadening the content and status of Social Dialogue. The GEA considers it desirable to discuss broader economic issues, to bestow more than just advisory powers to the Tripartite Commission and to subordinate it directly to the Prime Minister, rather than to the Ministry of Health, Labour and Social Affairs. At the same time, the Association shares the Governments position implying that amending the Labour Code should not be the key issue of Social Dialogue. According to the Association, the Labour Code does not contradict international standards and incessant appealing to ratified Conventions is counterproductive for Social Dialogue.53 It holds it that rigid confrontation with the Government on this issue is counterproductive and it would be more efficient to attempt sorting out problems which give rise to less controversy. The Association would welcome a change of the agenda in favour of other topics. In this regard, the associations point of view does not coincide with the interest of the Trade Unions to consider labour rights as the key topic of the agenda.
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3.2.2. Business Association of Georgia


The Business Association of Georgia (BAG)54 assumes a much more rigid and firm position with regard to Social Dialogue. This Association unites all big local companies (60 enterprises in all, only in a few of them the workers are organized in Trade Unions), and has fairly close ties to the Government. The Association was established 2009 and engaged in a wide range of activities ever since. The Association developed a regular communication with government structures, and holds meetings and discussions on topics important for its members. In 2010, its main topic of interest was a new version of the Tax Code; it was possible to consider this document within the framework of a dialogue between the Association and the Government. Within the Tripartite Dialogue, the Association is interested in retaining the existing Labour Code as it is. The existing status quo is satisfactory for its goals; it would be undesirable for the Association to increase the obligations of its members towards their employees. Such an increase of obligations, in the opinion of the BAG, would induce business to restrain from formalizing labour relations and return to the old practice of out-of pocket salaries for employees. The Association supports a market regulation of labour; although it does not deny the Trade Unions a right to exist, it sees their only function in checking the work contracts of the employees clearly meaning hereby individual contracts and not collective agreements.55 BAG perception of the Trade Unions is contradictory in itself; it makes it hard to build the prospect for constructive partnership. On the one hand, the Trade Unions, as such, are seen as associated with the Soviet past, thus not meeting the requirements of the present day. On the other hand, the Association itself needs to overcome old-fashioned stereotypes, according to which Trade Unions are merely institutions protecting the social rights of employees; they need to see them as their economic partner. A revision of this perception of the role and functions of Trade Unions might be a good start for big business companies. Labour development is an issue that may benefit businesses in many aspects. They are already facing problems due to the inability of the labour market to answer modern needs. Despite these problems, the Association does not hold it necessary to elaborate a policy of labour development. Thus it assumes structural unemployment and the lack of qualified workforce in certain sectors should be solved by the markets invisible hand and not through a purposefully designed policy. In this respect, the opinion of the Association coincides with that of the Government. For this Association Tripartite Dialogue is clearly a means for gaining time and blocking legislative changes. Perceiving the creation of the Tripartite Commission as a concession to the demands of the International Labour Organization, the BAG uses it as a buffer designed to neutralize the acuteness of current social conflicts. Although the Association speaks in the name of business, it is not quite clear whether the position it articulates is really independent. Close ties between business subjects and the Government imply certain mutual obligations. Being able to participate in the elaboration of the Tax Code is clearly more important for the business sector than having an independent position with regard to labour legislation. Presumably, if the Government changes its view regarding this issue, big business will not hesitate to support its new position.
54 55

About GSMEA: http://www.gsmea.ge/ge/about-association.html

Ch. V, Present State of Social Dialogue in Georgia, in the book: . . , Tbilisi, 2011, p. 142

Web site: http://bag.ge/index.php Interview with Lasha Akhaladze, Head of the Committee on Employment and Labour Relations, BAG

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3.2.3. American Chamber of Commerce in Georgia


The American Chamber of Commerce in Georgia (AmCham)56, not being a Georgian organization, is not directly involved in Social Dialogue. Nevertheless, this organization which is strongly supported by the US Embassy is to be reckoned with as an influential actor. The Chamber holds an active position with regard to the development of business in Georgia: AmCham, established 1998, is interested not only in supporting American companies operating in Georgia, but also in the development of representative institutions for local business and in establishing a practice of cooperation between business subjects. In this regard, this organization strives to facilitate the development of traditions and relations characteristic of the business community in western democracies. Although the main priority for the AmCham is attracting investments, rather than regulating labour relations, which coincides with the Governments policies, its attitude towards Social Dialogue still looks more constructive than that of the Government. From AmCham perspective, the function of the Tripartite Commission is not to settle conflicts, but rather to seek agreement on future progress, elaborate a common vision on development, even by proceeding in small steps. To achieve this goal, the members of the Commission need to be equipped with a strong representation mandate that would ensure the constructive conduct of the dialogue. In this regard, it is not quite clear which interests are represented in the Tripartite Commission, and which are not. It is questionable whether the GTUC is entitled to speak in the name of farmers, bank employees, or other groups of workers, not united in Trade Unions. The representation of the business sector is also frittered among different groups which still need to develop in order to ensure proper representation of the interests of business in the Tripartite Commission. In general, representation institutes in Georgia are as yet insufficiently developed. Their development is hindered by a lacking ability of society to unite in organizations, thus granting legitimacy to those speaking in their name, be it public or political organizations. A sound conduct of Social Dialogue also requires that the State overcomes the internal controversy between two strategies: promoting the countrys European integration and pursuing an ultra-liberal economic policy.57 The position of the Chamber is not anti-unionist; although at present it considers attracting investments more vital than protecting labour rights, the role of the Trade Unions, in its opinion, will rise with more international corporations entering the country. The Chamber admits that the Labour Code does not provide adequate protection of workers rights, but suggests that on the present stage of Georgias economic development labour rights might be a less important issue in comparison with the employment problem. Strengthening economy first, and taking care of labour rights later this approach might be more profitable in the end. Apart from this, a different approach is necessary to big and small business, both in legislation and policy. While collective contracts may be justified in big enterprises, flexible labour relations and individual contracts are more appropriate for small and medium business since small and medium enterprises are not prepared for serious obligations towards their employees.58 Summarising, one can say that the position of the AmCham, as opposed to that of other business actors, is based on a more balanced vision of economic development, although it may still be criticized. Approaches that are theoretically consistent may still have unpredicted results within a specific context. The investments first society later approach may result in irrevocable damage to the institutional foundations of economic relations. Instead of facilitating the evolution of Anglo-Saxon type of market rela56 57 58

tions, a prolonged one-sided development might establish oligopoly capitalism more common for less developed regions of the world. Uniting enterprises in business associations also may bring on a more efficient government control over these enterprises, rather than an increased influence of businesses on state policy. Regardless of whether other actors share or should be sharing the position of the American Chamber of Commerce with regard to specific aspects of labour legislation, this organization has the potential to play a more positive role for the benefit of the Tripartite Commission and Social Dialogue. This role should be regarded from the point of view of introducing dialogue culture, institutionalizing cooperation and mitigating confrontation.

3.2.4. Business and Social Dialogue in General


At the national level, the role of businesses in the Tripartite Commission and the Social Dialogue looks as secondary and somehow artificial. At company level, participation of individual enterprises in Social Dialogue often is much more rational and constructive in this regard. The independent interests of business are still taking shape and require institutionalization. Similar to the Trade Unions, due to rapid ongoing transformations, business is also mostly concerned with sorting out short-term problems, rather than with discussing long-term perspectives. With increasing independence of business from the state, the multitude of interests within the business sector will become more evident. In this regard, it might become necessary to take into account specific features and Sectoral differences between small, medium and big business. Although at the national level the position of big business with regard to Social Dialogue looks more rigid than that of medium business, it is in the big enterprises that signing collective contracts is most successful. Consequently, at the initial stage it might be correct to focus Social Dialogue on big business and diversify the demands concerning labour relations according to company size and sector. At the same time, small and medium business potentially may become one of the key beneficiaries of Social Dialogue, since they are much more in need of regulation and State provided public goods than the big enterprises. This is also true for labour relations. A deregulated labour market with unclear rules and non-formalized relations may prove chaotic, rather than flexible from the employers point of view. Regulation of the labour market may increase the economic efficiency of small business by exercising functions individual small enterprises are incapable to deal with. It is thereby only rational that the Employers Association is interested in broad Social Dialogue, rather than just in protecting labour rights. Within broad Social Dialogue its position would be nearer to that of the Trade Unions than to the interests of big business, whereas within narrow dialogue it rationally swings to the opposite side. A diversification of dialogue at different levels might help to solve this problem. Putting emphasis on the Sectoral level might render the cooperation between Trade Unions and employers more productive. Medium business would presumably cooperate more readily with Sectoral associations capable of elaborating working standards and professional ethics, represent the interests of the sector on the whole and not only those of the employees. For big business, in its turn, different from medium business, emphasis must be made on Social Dialogue at company level, rather than at the Sectoral level. Only after aligning the labour relations within the enterprise to international standards may it become interested in discussing more general issues.

Web site: http://amcham.ge/index.html Interview with David Lee, president of the American Chamber of Commerce in Georgia. Ibid

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An entirely different relation model may work between Trade Unions and small businesses which are nearest to the self-employed. Trade Unions have already begun to concern themselves with the interests of the latter, though the existing organizational models are insufficient. For this sector, and especially for farming enterprises, it would be most profitable to create a separate Social Dialogue forum with a broad representation of regions and villages. In this regard, European institutions can provide substantial support, taking into account European practice and experience.

The Government also does not have an explicit policy for developing labour as an integral part of economy, assuming that the market has to play a key role in this. Since the Georgian economy will be under transformation for the coming 20 years, there is no means of predicting what the demands of the market will be in future. The Tripartite Commission is created under the Ministry of Health, Labour and Social Affairs and is headed by the Minister. The Ministry has been undergoing a process of reforms itself. After the merging of two ministries (the Ministry of Labour and the Ministry of Social Affairs and Health) a Labour Department was created at this Ministry. However, in 2005 this department was closed and its staff dismissed. Labour and social protection issues were allocated to the same department initially named the Department of Labour and Social Affairs but later renamed to Department of Social Affairs. In 2006, the Labour Inspection Service was also closed down. According to its statute, the Ministry of Health, Labour and Social Affairs of Georgia ensures the implementation of state governance and state policy in the sphere of labour, health and social protection. However, in a more detailed listing of its function, labour is no longer mentioned, except for organizing the elaboration of labour safety standards.62 In essence, the only viewpoint, from which the Ministry approaches labour relations, is their legislative compliance with international Conventions - the issue that has to be reported to the ILO and other international organizations on a regular basis. Although the Ministry is officially in charge of implementing the States labour policy, the author of this study could not get a single document in the Ministry that would define this policy and neither any Ministry officer could explain it. The Ministry does not take any measures for elaborating a labour development strategy or collecting and analyzing factual data with regard to labour issues. There are no specialists of labour relations left at the Ministry. The only issue the Ministry is in charge of is legislation. From this point of view, labour relations are considered with regard to Human Rights within the overall context of social protection. The responsibility for labour related issues is distributed between several state institutions. Employment and labour are regarded as different problems and treated separately. The overall employment strategy is within the authority of the Ministry of Economy, while creating jobs is partly the function of the Ministry of Regional Development. Labour safety issues partly lie within the competence of the Ministry of Economy where a Construction Safety Inspection was created. Since the Government does not deem it necessary to have a policy for the development and regulation of labour and labour relations, it has difficulties in the conduct of Social Dialogue. Due to a lack of a clearly defined position it is not capable of facilitating positive development as from the point of view of a Stakeholder. Despite a declared aspiration to liberate labour relations from the zero-sum logic remaining from the Marxist past, the Government itself returns them to this dichotomy due to the inconsistence of its own position. Making a clear and definite choice between the abovementioned two strategies regulation or deregulation would make it much easier for the Government to turn Social Dialogue into a constructive process.

3.3. State/Government
Different from business, the main problem for the State is not so much the absence of a unified position, but rather its inconsistency. On the one hand, the Government supports the policy of convergence with Europe which requires the introduction of strict European standards in labour relations and their regulation. On the other hand, it adheres to an extremely liberal model of economy which implies maximum deregulation and flexibility of the same relations and creating a legal climate favourable for the employers. Of these two opposing strategies regulation vs. deregulation the former is viewed by the Government more as a means to satisfy outward demands while the latter appears to them to be a necessity dictated by the countrys actual situation. One is an obligation, a framework that represents positive reality, and the second economic rationality that adds normative legitimacy to the decisions taken by the Government. This controversy hinders the conduct of an open and consistent public policy, undermines the confidence of the partners and impedes the establishment of stable institutions. Disguising controversy behind words makes it difficult to comprehend the Government position. Thus, for instance, the Government claims that labour legislation is in full compliance with international standards and the Conventions ratified by Georgia, because it is balanced. The problem lies in a different understanding of the balance point between the employer and the employee. According to Vakhtang Lejava who represents the position of the Government, international norms are more favourable for the employees; the Georgian Labour Code also favours employees to some extent; not, however, to the extent the ILO demands.59 Thus, the Government policy priorities are being formulated as complying with international labour standards while ensuring maximum efficiency of the labour market, which implies flexibility.60 From this perspective the interests of employees are viewed as coinciding with those of the employers, and there is no antagonistic confrontation between them. Accordingly, Social Dialogue is viewed narrowly as a means of solving conflicts by establishing communication channels. Broad Social Dialogue, as it is practiced in such countries of continental Europe as, for instance, Austria, Germany and France, is unacceptable for the Government. Countries of Eastern Europe, especially Poland, may provide more adequate examples for experience exchange since they share the Past similar to Georgias Soviet experience. As for the Trade Unions, the Government is not very much concerned about whether they will exist or not. In this regard, the Government deems it is doing enough by not introducing additional obstacles on their functioning and does not prohibit state organizations to sign collective contracts. However, the Government is only prepared to treat them equally only if under these conditions they manage to gain real power and become an actor worth reckoning with.61 Consequently, the State has no specific strategic vision with regard to the role the Trade Unions may have in economic development.
59 60 61

Interview with Vakhtang Lejava. Ibid


62

Ibid

http://www.moh.gov.ge/index.php?lang_id=GEO&sec_id=47

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4. Individual Sectors
and Cases
4.1. EducatorsandScientistsFreeTrade Union
The EducatorsandScientistsFreeTrade UnionofGeorgia (ESFTUG)63 is the biggest Trade Union active in Georgia at present. Until recently, it united 103 thousands of preschool, school and high school teachers, scientists, and technical workers, including 69 thousands of schoolteachers64. Due to the specific features of the sector, the ESFTUG is distinguished among other Trade Unions not only by its size, but also by its political significance and involvement. Education is one of the sectors where the character of labour is less regulated and more creative. Education quality and content depend to a certain extent on the pool of teachers. This is a field where it is almost impossible to provide control, because the definition of good or bad teaching contains many subjective components. Final assessment can be made by the results, which become apparent later on. This is the sector where the participation of Government in dialogue with employees is especially important. A vague, unfeasible and unpopular reform may seem to be good on paper, but without an active and conscious involvement of teachers, it can fail. During the last 15 years, this sector was the most active in all aspects of professional, political and social life. The teachers represent a significant resource when it comes to political influence and use of political technologies during elections. Already before the Rose Revolution, a large independent Trade Union Solidaroba with the centre in Kutaisi was acting simultaneously with the traditional Education Trade Union. This organization united up to 10 thousands members and was actively involved into the political and social life of the country. Various foreign foundations and international organizations provided development support to this organization. After the Rose Revolution, which Solidaroba actively supported by taking part in the protest actions organized by Saakashvili, the organization moved to Tbilisi and began active collaboration with the new authorities. The Education Trade Union by that time had left the GTUC and had also supported the opposition (Free Democrats) during the Rose Revolution. So it became possible to establish close cooperation between these two unions after the revolution. The 7-year period of confrontation between the traditional and the free Trade Union associations came to an end in 2005 by merging these two organizations. M. Ghurcumelidze, formerly the leader of Solidaroba was elected as Secretary General of the new union65. This union operated as non-associated Trade Union until 2009. In 2009, it joined the GTUC. At the same time, since 2005, middle schools became autonomous employers within the framework of the education reform and were empowered to sign contracts with schoolteachers virtually independently from the Ministry. Referring to this reform, Alexander Lomaia, the Minister of Education, refused to respond to the appeal of the Trade Union of 2006 on renewing of the collective contract which was in force since 1998 between the Ministry and the ESFTUG.
63 64 65

The refusal of the Ministry to involve the Trade Union into the process of reform substantially reduced the potential of the ESFTUG to protect the interests of its members. The on-going reforms directly affected issues, which Trade Unions are dedicated to deal with. The education curricula, qualification standards, the examination system and employment principles have been radically changed. The pool of school directors was renewed. All these changes caused disagreement and concern among the teachers. The Ministry held meetings with the teachers and gave explanations, but these meetings did not have an organized dialogue format. In order to renew the collective agreement the ESFTUG had to apply to the court. Although the agreement signed in 1998 was still in force, but, due to the changes that had taken place since then, it became obsolete and required revision. On the pretext that it was the Ministry that defined employment conditions, wages and incentives, thus maintaining the authority to prolong collective contracts, by decision of the Tbilisi City Court of 2007, further by decision of the Court of Appeal of 2008, and further, by decision of the Supreme Court, the Ministry as social partner to the Trade Union was obliged to resume negotiations with the ESFTUG with the aim of concluding of a collective agreement. In 2008 and 2009, the next Ministers of Education, Gia Nodia and Nika Gvaramia, created the special groups for conducting the negotiations. However, the collective contract of 1998 was not upgraded and remained in force in its old version, as it was before the reform. Due to social dissatisfaction around the reform of the education system, as well as a tense political situation in general and the high potential of political instrumentalization of schools, the Trade Union was confronted with a difficult choice. On the one hand, it had to avoid the political polarization since this would exclude any possibility of dialogue with the Ministry. On the other hand, it had to represent the interests of its members and criticize certain aspects of the reform in order to ensure their revision. The three main concerns of the teachers low salaries, fear of losing their jobs and new qualification requirements, required dialogue and active involvement of the Trade Union. However, the balancing policy of the ESFTUG between radicalization and dialogue proved ineffective. Ignoring of the Trade Union by the authorities became especially evident when the ESFTUG filed a petition to the Parliament, signed by 60 thousand teachers, demanding amendments to the Law on Education. The petition claimed for the regulation of certification issues. The Parliament was legally obliged to consider the petition, though this never happened. Instead, the Parliament adopted the amendments proposed by the Ministry without consulting the Trade Union. Negative attitude of the Ministry towards ESFTUG manifested itself at the school level as well. Trade Unions started to be oppressed and Trade Unionism discriminated. By November 14, 2008, when the Trade Union advanced an appeal to the ILO, the situation had become rather tense. Among other issues, the appeal protested against government interference into the activities of the EducatorsandScientistsFreeTrade Union. Cases of discrimination, persecution and contempt were submitted. By that time it also became clear that the Ministry supported the institutionalization of the Professional Syndicate of Education, a new structure established in order to serve as a social partner alternative to the existing Trade Union. Contrary to the Trade Union, the syndicate was established as a NGO supporting the professional development and retraining of teachers. The mission of the syndicate is protection of professional interests of education workers and promotion of the development of education system in Georgia. It was established in 2007 and for the time being unites up to 18000 members. The syndicate regularly organized free train-

Web site: http://www.educator.ge/index.php?lang=ge&lang=ge Interview with Maia Kobakhidze, President of the ESFTUG. Source: Zurab Datuashvili, Notes on the History of Education Trade Unions of Georgia, 1905-2010, manuscript

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ings for teachers and school managers and issued periodic professional/methodological literature.66 In addition to the syndicate, one more organization was established in 2008 the Association of School Directors, which signed a memorandum of cooperation with the Education Professional Syndicate on March 26, 2009.67 In parallel to the preferential cooperation of the Ministry with these associations, collecting membership subscriptions for ESFTUG was made difficult in some regions. Teachers were advised to join the syndicate instead of the ESFTUG. There were reported cases when the subscriptions of union members were transferred to the syndicate instead of the ESFTUG. Some progress in relationship between the Ministry of Education and the Trade Union was achieved after tripartite consultations were started between the GTUC, GEA, and the Ministry of Labour, Health and Social Affairs. The regulation of the relationship between the Ministry of Education and the Trade Unions was one of the first initiatives of the Tripartite Group following its establishment in the end of 2009. At the request of the Trade Unions, the president of the Tripartite Group interfered into the dispute between the Ministry of Education and the Trade Unions with the aim to alleviate tension. Irakli Petriashvili, chairman of the GTUC, replaced Manana Gurchumelidze in communicating with the Ministry to avoid personal confrontation. In direct dialogue between Petriashvili and Dimitri Shashkin, the new Minister of Education, a plan of improving the situation was worked out. As the Ministry declared that it did not have any principle objections against the Trade Union as an institution, a bilateral commission was established for renewing collective contracts and resuming the collecting of membership subscriptions. This commission elaborated a form for bilateral contracts between school and Trade Union. Signing the contracts started first in Adjara, and later in some other regions. At the same time, in spring of 2010, the ESFTUG was planning to call a general strike. The strike appealed for the initiation of dialogue and protested against the rules of conducting teachers certification exams, as well as against the existing management and financing principles for public schools. It also requested raising the salaries and giving an educational status to pre-school institutions. Besides that, the Trade Union wanted to participate in the elaboration of a Code of Ethics of teachers as a partner organization. However, the Trade Union was not included into the commission established for the elaboration of such a Code in April 2010. The union could not manage to push a large-scale strike, and dialogue remained the only alternative. Although dialogue had already started, the situation worsened again in the aftermath to local elections in May 2010. On June 8, D. Shashkin met the representatives of regional organizations and school directors and gave verbal orders to school directors to quit transferring membership subscriptions to the Trade Union. After that, the ESFTUG local chairs started collecting fees directly from the members. As soon as the Minister learned about that, he declared that all directors who would allow such actions in their schools would be held responsible according to the law. Meanwhile, elections of a new leader of the ESFTUG were due during the upcoming congress (October 30, 2010). Transferring of membership subscriptions was stopped again and pressure was exerted on teachers to force them to elect a leader that would be acceptable for the Ministry. In private conversation with the leader of the GTUC the Ministry proposed such a nomination68.
66 67

The congress revealed a rift among the Trade Union members. As the candidate supported by the Ministry of Education did not meet the requirements of the ESFTUG statute (she did not have working experience in this field), she was not allowed to run and the elections were held without alternative candidates. A part of delegates attempted to disrupt the elections under the pretext of absence of quorum, but the elections were still conducted and a new leader, Maia Kobakhidze, was elected. The legitimacy of these elections was recognized by independent observers from the Education International69. The discord lasted even after the congress. The election results were challenged in court, and the trial was not closed as of 2011 year. The Ministry refused to establish relations with the newly elected leader. Transferring of fees was still suspended, causing financial difficulties to the organization. Although on November 30, 2010 the Minister of Education addressed the school directors with a request to regulate relations with the Trade Union, this process also halted later on. On the ground of requests of the Trade Union members, schools were obliged to start negotiations with primary organizations about signing collective contracts. Initially, there were signed up to 500 such contracts, but this process was reverted and frozen later on. What was the reason for such weakening of a formerly powerful organization? Was it possible to avert this development by adopting a different strategy of action? There are some factors which distinguish the case of the ESFTUG from the case of the Zestafoni FerroAlloy Plant.70 As mentioned above, schools are politically strategic objects; election results depend on control on these objects by the authorities. Consequently, the union of teachers should not be just politically neutral; it must be a political ally. Because of this, the Trade Union simply cannot confine itself to expressing the economic rights of its members, but is compelled to show a civil position. In contrast to the economy sector, there are no clear professional standards in the field of education that would grant certain advantages to the professional elite. Authorities can replace even the most competent and influential teacher with a less qualified one without impeding the academic process. Hence, the Trade Union cannot rely on the most qualified and competent leaders and have to appeal to the whole pool of teachers, which decreases its leverage on the employers. The ESFTUG failed to become a public opinion leader because it refrained from organizing and conducting a wide campaign of criticism on education reform, concentrating on salary and employment issues instead. It also abstained from pursuing a strategy of pressure, presumably due to the absence of appropriate resources. Accordingly, it also failed to implement the third and fourth strategy presented in the Table 1 (chapter 3.1.3). For the time being, the Trade Union is weak in both regards: it does not have appropriate resources for leverage and does not have a wide strategic vision which could grant public support. In order to survive, the ESFTUG should change its tactics. In spite of a very complicated situation the Trade Union should keep active and the more complicated the situation is the more rapid action is needed.

69

Education International http://www.ei-ie.org Statement regarding the ESFTUG Extra-Ordinary Congress on 30 October, 2010

http://www.facebook.com/pages/Professional-Syndicate-of-Education/189331814453249 http://principals.ge/16.05.2009.htm Interview with I. Petriashvili


70

see chapter 4.3.

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4.2. Trade Union of Railway Workers of Georgia


In contrast to teachers, the railway Trade Unions stood aside from the social turnovers, kept a kind of conservative mode of operation and joined the reformation process only during the last period. With some delay, they still undertake measures to arrange their functioning in accordance to the new trends. These efforts are a forced reaction to the fundamental changes in management which took place in the enterprise during the last period. In previous years the railway Trade Union was, to a certain extent, operating as an autonomous structure because it was more attached to Moscow then to Tbilisi in Soviet times and was a part of the United Soviet Railway Trade Union. Since 1997, after adoption of the Law on Trade Unions, it was established as the Independent Trade Union of Railway Workers and Constructors, which become a member of the GTUC. Until 2006, the structure of this Trade Union was quite decentralized, due to the diverse and complex structure of the railway itself. The enterprise was quite large and united more than 14 thousand workers. It consisted of separate enterprises that were independent as legal entities. The Trade Unions of these enterprises accordingly had an independent legal statutes and signed collective contracts with the correspondent employer. The integrated contract acting at the high management level was recognized as one of the best in Georgia. It was replenished by contracts signed at primary organization level, which took into account specific issues according to the peculiarities of different enterprises and professions. Since 2006, the railway enterprises started centralizing and merging into a unified structure. The railway retained the status of a state owned enterprise, but changed its management, simultaneously changing its attitude with regard to labour relations. In this new internal management philosophy, the balance of power between employers and employees shifted in favour of the former, calling into question the necessity of consulting the Trade Unions as legitimate partners. Within this new vertical management system, primary organizations were no longer entitled to conclude direct contracts with enterprises. This called for structural changes in the Trade Unions. Since then, only a general collective agreement has been signed, without concluding collective contracts at the level of primary organizations. This agreement was much more modest than the previously existing one. It did not cover issues, which earlier were regulated by specific contracts at the primary level. For instance, the locomotive depot workers and the pass workers were deprived of the privileges granted to them by the previous contracts. Ever since, the Trade Unions attempted to achieve the most favourable conditions they could, but relations were gradually worsening. The collective contract concluded in 2006 was revised in 2008, although some disagreements around its content still remained. Given the existing tensions around the content, the management one-sidedly adopted a revised version in 2010, without negotiating with the Trade Unions, contrary to the procedure of revising collective contracts. In the contract of 2010, a number of provisions have been even more reduced due to the amendments adopted one-sidedly by the management. The privileges provided by those provisions have not been revoked, but were transferred to the so called Loyalty Program of the enterprise, which does not concern the Trade Union.

Centralized collection and transfer of membership subscriptions to the account of the Trade Union was also suspended in 2010 by a one-sided decision, calling into question the existence of the organization. By that time, the Trade Union had become weak due to a prolonged period of inactivity, while its leaders did not enjoy appropriate credit of trust and therefore could not rely on the solidary efforts of the employees. Besides that, the Trade Union experienced a lack of influential medium level leaders and, consequently, the need of electing new ones. That is why, at the initial stage of the conflict, the Trade Union was still oriented at non-confrontation actions and refrained from appealing to international organizations, preferring to seek arbitration from the GTUC, the Tripartite Commission and the Court. Despite a complaint submitted to the Tbilisi City Court in 2010 and the investigation of the problem by the Tripartite Commission, this issue was still not solved in 2011. Failing first instance, the Trade Union kept complaining in higher instances. As for the Tripartite Commission, it issued a recommendation to the railway management to continue negotiations with the Trade Union, though this was not followed by any practical results. By 2010 year the railway Trade Union was one of the biggest organizations within GTUC. After termination by management of transferring membership subscriptions to the account of the Trade Union, both the number of organization members and its budget dropped drastically. Negotiations were conducted with banks and signatures of the remaining members on individual applications for transferring their membership subscriptions by the banks were collected. By 2011 year only 3 000 members remained registered in the organization, while the income collected in banks dropped to the 10% of the previous sum71. The inability to respond adequately to the new challenges placed on the agenda the necessity of introducing into Trade Union of principally new organizational approaches. Despite the pressure exerted on organization members, an extraordinary congress of the Trade Union was held in April 10, 2011, which elected a new management. By conducting this congress, the railway Trade Union averted at least the main threat: turning into a yellow one. However, this is only the beginning of a way out, which should be developed further. The new management faces the need to develop a new strategy. The railway Trade Union needs new personnel. The employees realize the necessity of their protection by Trade Unions, but refrain from being active themselves. The Staff is continuously reduced, while many employees took loans from banks and are afraid to lose their job. The railway faces a perspective of privatization, i.e., changing of the owner, which may become a beginning of even sharper dismissals in future. In case if the railway management would change its attitude, the Trade Union would rather be inclined to constructive collaboration with it and not to confrontation: Turning to fighting is not a good way out. This Labour Code cannot train a good worker and it does not support the loyal ones. The Code would create obedient, but less productive workers72. However, it is also evident that there is no chance of establishing old-style relationships with the employers: Earlier, concession brought more benefits; now, if you do not fight, you lose everything. If the Trade Union chooses to, it has a good chance of reaching results by applying a strategy of pres71

Interview with Hamlet Lominadze, President of the Railway Trade Union

72 Ibid.

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sure. If represented by trustworthy leaders, workers could have significant leverage on the management. Strike called at any railway station can stop transportation along the whole line. The transportation can be blocked by a strike of one profession, for instance, by engine drivers. For the time being, the Trade Union is refraining from such actions because it has neither any experience in this field nor a corresponding disposition. However, if activity becomes equal to survival the events may develop in this way. A comparatively small, but well organized Trade Union in the railway might prove more efficient than the old, passive organization, as the Zestafoni example demonstrates. Such transformation requires changing the operation mode and using the collected membership subscriptions for establishing a solidarity fund, instead of the social assistance fund. Besides that, active work with the members, and time, is needed.

previously existing Trade Union and the administration attempted to prevent the establishment of primary organizations. In spite of this, the Metal and Mining Industry Workers Trade Union of Imereti Region, uniting workers from Zestafoni Ferro and Chiaturmanganumi was officially established in Zestafoni on November 7, 2009, by the MMC. Although the past experience invoked serious mistrust towards Trade Unions, first about 200 and later up to 700 workers out of 6 thousands employees of these two enterprises were united in the newly established Trade Union. This growth was facilitated by an open door approach of the founders: organization leaders were not elected in the beginning in order to provide equal rights to the new members for being elected. Against a background of general mistrust towards any leadership in Georgia, the decision of the 15 member board on collective governing was undoubtedly correct and contributed to the further success. It seems that the enterprise administration, which resisted the establishment of the new Trade Union, had misjudged the new developments. Instead of cooperation it chose to apply confrontation and pressure mechanisms. This strategy resulted in the dismissal of two activists in March, giving a push to a strike. The strike took place in April 2010. As stipulated by Labour Code, it was preceded by the warning strike and was combined with the attempts of negotiations around a list of demands, carefully kept modest and realistic. The strike was successful and ended with conclusion of a collective contract. The enterprise management did not concede to all requests, but the compromise was satisfactory. Thus, instead of requested 50% increase of salaries, a decision on 20-25 % increase was reached. In addition, indexation of salaries as well as reimbursement for night hours, safety measures, etc. were stipulated. The success of this strike was facilitated both by internal democracy and external solidarity. The local organization as well as the GTUC and the International Federation of Chemical, Energy, Mine and General Workers Unions (ICEM) were involved. External actors assisted the local Trade Union in conducting the strike in accordance with legal norms, in the elaboration of the strategy and in carrying out negotiations with the management authorities. However, when the management threatened the employees with a lockout, it was the strikers meeting that decided on continuing the strike. It should be noted that the achieved success did not lead to increasing the membership of the new Trade Union or to the breakup of the old one. On the contrary, the number of new organization members has even decreased. At present, two Trade Unions are operating in parallel, the new and the old, with which the employer signed two separate collective contracts. These two contracts cover all workers employed in the company. This example of two different unions operating in one enterprise clearly reveals the problems, which face the Trade Union movement. The old Trade Union provides for social assistance and is traditionally merged to the enterprise management as it was in Soviet times. The new organization protects economic rights of the employees and does not hesitate to use pressure and organize strikes. A significant part of the employees sympathize with the new Trade Union. They are interested in its success; nevertheless, they not only refrain from being active but, quite often, turn back to the old Trade Union for social assistance. They lack long-term thinking, are not prepared to take risks and prefer to hold others responsible for any actions. By 2011, there were only 300 members left in the new Trade Union who were consistent in their loyalty and ready to take responsibility for future activities.

4.3. Metallurgical,Mining and Chemical IndustryWorkersTrade Union


The Metallurgical,Mining and Chemical IndustryWorkersTrade Union of Georgia (MMC)73 unites heavy industry enterprises. This Trade Union managed to innovate as early as 2010, providing the first success story to the whole confederation. Although enterprises in this sector demand a high number of qualified personnel, the wages here are low, labour conditions and work safety do not meet the appropriate standards. All heavy industry enterprises, in which Trade Unions operate, are relatively large. However, there are some enterprises, which at present do not have any Trade Union at all. For instance, the Heidelberg Cement, Georgian Steel in Rustavi and other ferrous metallurgy enterprises do not have Trade Unions. At the Kutaisi Automotive Plant, the Trade Union still is not operating at a proper level. Not all enterprises have the same attitude towards Trade Unions. There are positive examples of Social Dialogue, which are less known as opposed to the negative ones. For instance, Madneuli and Kvartsiti are enterprises, which signed collective contracts and have experienced no strikes. On-going problems arising in these enterprises are always subject to a dialogue that never fails to bring certain positive results. The Azot plant, which belongs to the same Sectoral Trade Union, also has an old tradition of Trade Union. All three enterprises have signed collective contracts; the Trade Unions, to a certain extent, manage to mitigate the problems created for the employees during the process of reformation and technical retooling in cooperation with the administration. In contrast to the above mentioned enterprises, Georgian Manganese in Zestafoni always had a yellow Trade Union, which was established in 2001 by the employer and which left the GTUC in 2008. The Trade Union of Sakhnakshiri enterprise in Tkibuli, which functioned in Soviet time, did not exist anymore. Primary organizations of the Sectoral Trade Union in both these enterprises are newly established. The example of these primary organizations and their strike in 2010 comprise a story, which had a farreaching influence on the activities of other unions.74 As a result of these efforts the MMC, on one side, and the Georgian Manganese Holding, which owns JSC Ferro (Zestafoni Ferroalloy Plant) in Zestafoni and Chiaturmanganumi in Chiatura, managed to reach and sign a collective agreement. The establishment of new primary organizations was not spontaneous: it was preceded by year-round work, a number of seminars held for the activists, distribution of legislative information material. Both the
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Web site: http://mmcworkers.ge See also chapter 2.5.2.

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Such dynamics of membership and activities should not be considered specific only for the given enterprise. It fully fits the logic of collective actions revealed in Georgia at different times and in different fields. The number of core members of the new Trade Union will not increase until a new short-term target requires collective action. High risks and transaction expenses are the two factors hindering the development of stable public and political unions in Georgia. It should be taken into account that employees are always pressurized and intimidated by employers; they are afraid to lose their job, which for most of them would mean poverty. Besides that, many enterprises are small, which makes it difficult to properly aggregate the risks and the expenses. Thus, although accidents are very frequent in the Chiatura mining enterprise, mainly due to obsolete industrial infrastructure and neglecting safety norms, the main bulk of workers on strike were employees of the Zestafoni Ferro Plant. In small and scattered pits managers can exert much more pressure on workers and it is much more difficult to organize. However, Zestafoni set an example of calling a strike for the workers at another mine in Tkibuli, where three explosions took place during a year. A one-day strike was organized on February 2, 2010, in Tkibuli, which ended by signing an agreement on February 3. Qualified conducting of negotiations by MMC, attracting consultants and experts, and basing on calculated figures at hands, was very important in both cases. This approach made a constructive dialogue possible, which led to the reallocation of financial resources by management in order to satisfy, at least partially, demands of workers. Trade Unions acted in full compliance with the legislation, leaving no ground for the accusations in unlawful behaviour. These factors of success seem to be overestimated by Trade Unions leadership as their further experience in Kutaisi demonstrated. The same mode of action that proved successful in 2010 did not bring the same results in 2011 in another industrial enterprise. Trade Unions believed that in other enterprises, where workers inspired by their example and arranged spontaneous strikes without proper preparation, the results were totally different just because this mode of action was not replicated.75 Thats why, employers managed to suppress the strike and punish the initiators with support of the local authorities and police. This happened in May, 2010, in GeoSteel, a Georgian-Indian enterprise in Rustavi managed by foreign managers and having neither a Trade Union nor any Trade Union tradition. Local employees were complaining about discrimination, low salaries, harsh working conditions (absence of locker-rooms, water, bathrooms, toilets, etc. in a number of enterprises) and requested opening of canteens and reimbursement of bulletins in accordance with the acting legislation. The strike was not initiated by the Trade Unions. Around 40 workers, though not being Trade Union members, asked for the assistance of the GTUC. However, the strike had already been started with violations of legal norms, which gave a hand to the employer to announce it illegal and involve police. 20 people were arrested and moved to a lock-ward. Later the GTUC assisted to release them. One week later, similar developments took place in a metallurgic plant Hercules, owned by Eurasia Steel in Kutaisi. This time seven initiators of the strike were arrested for 25 days on a charge of disorderly conduct. Employees of this enterprise were being persecuted for Trade Union membership - 5 people were fired for this reason.
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Based on the 2010 Zestafoni experience, the MMC decided to help workers of these plants to defend their rights. They persuaded local activists in Hercules plant to organize and to follow formal procedures, stipulated by Labour Code. They proposed to proceed with the organized collective bargaining, which could make a strike optional, but not the only and not an inevitable mode of action. The strategy did not work. The plant administration, in pair with the local authorities and police, acted exactly the same way as it did in 2010 - leaders were detained, activists dismissed, other workers had to return to their working places under the supervision of police. This attempt of collective bargaining thoroughly followed all procedures to make it legitimate, effective and legal. It took more than one year to train leaders and to formulate a platform for negotiations. Local problems and complains were studied and summarized in a letter that was handled to the administration of the company. The demands were moderate and realistic. Union leaders thoroughly followed the events in order to prevent any violations and provocative actions that could be used in order to legitimate punishment of workers. All interested sides, including social partners, involved in a Tripartite Dialogue were informed timely and regularly at the beginning and during the process, so the door for starting bargaining had been kept open at all stages of the process. To represent workers in this dialogue and to lead the process, formal organization was needed. On August 4, 2011, about one month after handling the demands to the administration, 50 out of 400 workers of the plant established their Trade Union organization and elected a committee of 11 members. Others kept passive, among them foreign (Indian) workers, although about 150 signatures were collected for the warrant, by which the employees gave an authority to the Sectoral Union to act on their behalf. The consequences of this action were not much different from the previous experience of Trade Unions in many other cases. One week after the union was established, six out of eleven committee members were dismissed from their job. Later on they were informally told that the decision may be revised if they apologize for creating the organization and will not continue their activities. As they refused this offer, no other suggestions from the management followed, which made a strike the only possible solution to the conflict. Following the procedures, stipulated by the Labour Code, union organized a preventive 2-hour strike at September 2. As no negotiations followed and even more union members were dismissed, the strike was decided. It began at September 13. Although one part of workers, including 150 foreign employees from India continued to work, normal functioning of the plant was significantly hampered. The strike did not last long. In two days strike members, among them 4 members who were on hunger strike, were suddenly attacked by police nearby of the plant entrance. 30 of them were taken into custody. They were released next morning in exchange of a written promise to return to work. Many others were visited at their homes by police, requesting them to return to their working places. The obvious fact that the police acted in an illegal and unconstitutional manner, immediately brought the event to the attention of Georgian society, international organizations and foreign embassies. At first glance, the use of State force in favour of the plant owner could be attributed to the local authorities, given the comment by the vice mayor of Kutaisi Irakli Jiqia: Any investment will have maximum protection from the side of the State, because our primary priorities are new working places and local employment76.
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nterview with Tamaz Dolaberidze, MMC Prezident.

http://presa.ge/new/?m=society&AID=8839

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However, given the strictly centralized mode of decision making in Georgia and the passive reaction from the side of the Tripartite Commission, the event should be considered as an extreme expression of the overall governmental attitude towards capital-labour relations. In following days the events were taken even further: as it became obvious, that local workers could apply to courts and to the international community, three days after the strike the three most active leaders were detained once more for 10 days. The strike did not finish without results, however. Administration fulfilled many demands, raised by workers. Working conditions improved and many workers, who were initially dismissed, were allowed to return to their working places. However, this happened at the expense of prohibition of Trade Unionist activities and may be not sustainable in a long run. All developments described above are the result of the policy of investment attraction conducted by the Government. Both central and local authorities are trying to interest investors even at the expense of employees. During the preparation of privatization of an enterprise, collective contracts are often denounced. Clauses protecting the interests of employees are often omitted in investment conditions. Consequently, the function of protecting the interests of employees is fully entrusted to Trade Unions. Along with investing efforts for the completion of collective contracts at company level, the Sectoral Trade Unions might place the issue of the investment policy conducted within its sector on the agenda of Social Dialogue. Providing some interest on the government side it is possible to impart a greater sense of cooperation to the relations between the employers and the employees even without significantly increasing the expenses of investors which would meet the interests of the both parties.

The Trade Union still attempted to fight and decided to call a strike. In October, 2007, a half-hour warning strike was called at the Poti Port demanding a collective contract and transparency of tender procedures. The warning strike was conducted during a working break and thus did not interrupt the working process. In a few days after the strike, the management sealed the Trade Union office and fired the leaders. Although the management did not admit dismissing the leaders on grounds of their Trade Union activity, the Trade Unions appealed to court. The City Court and, later on, the Kutaisi Court of Appeal refused to satisfy the claim; in November, 2008, the Supreme Court dismissed the claim, thus leaving in force the decision of the Kutaisi Court of Appeal. In May 2009, the GTUC filed the claim to the European Court of Human Rights. Although the privatization of the Poti Port is over and the Port has a new management who refuses to speak to the Trade Union, the trial is not yet over. The Poti Port case was repeatedly discussed within Social Dialogue. It is referred to in the GTUC appeals, in the correspondence between the ILO and the Georgian Government and in the agenda of the Tripartite Commission. Despite this, there has been no conciliation of the positions of the parties. Meanwhile, thanks to the solidarity of the worlds Trade Unions, the fired leaders of the Trade Union and the Trade Union itself are receiving certain financial aid from Latvian, Lithuanian, English and Greek sailors.

4.5 Khelvachauri, BTM Textile


The BTM Textile case is a clear example of how the labour situation of workers worsened in new economy, what shape the emphasis made by the Government on cheap labour can take and what challenges even powerful Trade Unions are facing in attempting to protect workers rights. The garment factory located in Khelvachauri was purchased in 2006 by Turkish investors. This was a jobcreating investment but these jobs appeared to be very different from what they used to be in the past. The nearly 500 employees had to work in harsh conditions. According to the workers, the working day was virtually unrestricted and working hours could last up to 12 hours and more without extra payment. Absence from work, even for medical reasons, had to be compensated. In the factory it was cold; access to shower cabins was restricted; even for drinking water special permission was required. Work contracts were mostly short-term: from 3 months to one year, but sometimes even less. This enabled the proprietor to hold employees in constant fear of losing their jobs. All this differed radically from the employees perception of fair and acceptable labour relations. Prior to privatization, a well-functioning Trade Union had existed at the factory, headed by an independent and influential group of leaders. Initially, they managed to carry on with their activity. On March 16, 2008, they initiated the founding of a new Trade Union uniting 250 workers. This Trade Union joined the Adjara regional branch of the GTUC. A professional committee of nine members was elected. On April 10, the General Director of the factory was notified about the founding of the Trade Union and handed over a package of official documents containing a list of the committee members. On the very next day, without any explanation, all nine members of the committee were fired. This was followed by a warning to other workers that they, too, would be dismissed in case of any Trade Union activity on their side. The management also outsourced some of the orders to other factories where the employees did not demand restricted working hours or extra remuneration for overtime work. As a result of subsequent staff reduction, most of the Trade Union members also lost their jobs.

4.4. Poti Port


The case of the Poti Port is one example of the fact that, in the most critical moments when cardinal reforms are being undertaken in an enterprise, a change of proprietor and mass staff reduction is being planned, the local Trade Union is incapable of playing any role in this process. Often, it not only breaks down totally or partially but is unable to do anything to protect the interests of the employees. This impotency partly can be explained by the weakness of the Trade Unions, but, to a great extent, it is conditioned by the style of the reforms being undertaken in confrontation with the employees and lacking any mechanism of worker participation or information exchange. Up till 2007, the Poti Port Trade Union united up to 900 employees. When preparation for the privatization of the Poti Port started in January, 2007, the Port management terminated the collective contract with the Trade Union under the pretext of its expiry and stopped the centralized collection of subscriptions. While discussing the issue of renewing the transfer of subscriptions, the manager required from the Trade Union to collect signatures of the members that would confirm their membership, in order to collect membership subscriptions basing on this list not through the enterprise any longer, though, but through the bank. The membership subscriptions were collected via bank transfer for several months, from those 300 employees whose signatures it was possible to collect. In the meantime, the Trade Union set up new demands concerning raise of wages, pensions, and other issues, and filed these demands in written form to the management. The management declared these demands to be excessive and refused considering them.

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The Trade Union appealed to local authorities for help, but the latter did not undertake any measures to protect the rights of the employees. For a whole year the Batumi City Court was trying this claim and finally dismissed it. The case was reported to the ILO and discussed within the Tripartite Commission, but as yet, the Trade Unions did not receive any response.

4.6 Communications: Silknet and Post of Georgia


The example of communications shows that the widely accepted opinion that it is easier to conclude collective contracts in state enterprises may not be true in some cases. Although it is difficult to conclude the contracts in both types of enterprises, sometimes private organizations are more flexible in negotiations with Trade Unions. 10-15 years ago, up to 30 000 people were employed in the communication sector. This number was decreasing gradually due to the sector retooling and technical modernization and for the present has dropped to 8000 - 9000. About a half of this amount (4200) is united in the Trade Union (Communication Workers Trade Union of Georgia). The primary organizations in the communication sector uniting the highest number of members (1600 and 1300, correspondingly), are the private-owned Joint-stock Company Silknet and the state owned enterprise Post of Georgia. Conclusion of the collective contracts in both these organizations was connected with serious resistance. Silknet (until 2010, Gaertianebuli Telekomi) was established as a private company in 2006 as a result of privatization of Saktelekomi. By the time of privatization, a collective contract was in force in the company. Although, the investor requested to free the company from all previous obligations, the previous labour legislation was still in force by the time of privatization and it would not be easy to denounce the collective contract. Initially the new owners did not acknowledge the collective contract and suspended the transfer of membership subscriptions. The Trade Unions opposed the termination of the contract, massive dismissing of employees and signing of new contracts. They organized several protest actions. Since all employees, by that time, had unlimited contracts, dismissing without the consent of the Trade Unions might have been followed by judicial proceedings and payment of relevant compensation. The Sectoral Trade Union conducted negotiations on signing of a new contract that, to a certain extent, protected the employees from direct pressure. Prolonged negotiations ended with some results: a collective 3-year contract was signed in 2007. Staff reduction still continued during this time, but the Trade Union maximally mitigated the process: they resisted each individual case of massive dismissing. The contract was signed as a result of mutual concession. Its main achievement was signing unlimited contracts with the workers who had more than three years of working experience in the organization. Besides that, medical insurance was included in the contract. The Trade Union maintained the right of operation. After expiry of the contract period, difficulties in renewal procedure arose again. In 2009, prior to the expiry of the contract period, the Trade Union developed a new draft of the contract. As the company operates at the National scale, the draft was presented to the regional departments at a conference in Tbilisi and distributed also via post. After that the draft contract was submitted to the management authorities.

The negotiations were hard and long again. The new contract was concluded in May, 2010, this time through the assistance and involvement of the GTUC and international organizations. Some of the provisions of the contract were improved, as for instance, the enlarged insurance package, while some other provisions, compared to the previous version, were worsened. The new contract was also signed for three years. The main achievement still maintained in the new contract was unlimited contracts for experienced workers. However, wages are still quite low and the difference between the lower and higher end extremely high. The Silknet Trade Union successfully overcame the resistance connected with collection of member signatures. The organization can demand the signatures in two cases: first, for centralized transferring of the membership subscriptions, and second, to prove the eligibility of Trade Unions for carrying out collective negotiations in accordance with the Labour Code. In both cases the employees have a fear of discrimination (potential loss of a job) that can be caused by direct warning or intimidation from the management side. Collecting signatures in this way makes the names of the Trade Union members known to the employer. Such exposure of private information creates a threat of discrimination of Trade Union members and handicaps their activity. In the beginning of 2010, the Silknet management requested from the Trade Union to collect signatures for the authorization to conduct collective negotiations on behalf of the employees. Around 2500 of such signatures were collected; this, of course, played a role in urging the management to agree on negotiations. Such fearlessness of the employees might have been provided by the constructive attitude of the management, by acting in a free environment without pressure and by positive experience of the previously concluded contract. As opposed to Silknet, the Post of Georgia still remains state property, while its financial state is much worse. The organization has old salary backlog, which still are not covered. The Trade Union repeatedly expressed protest to this end, but without any success. The organization also is in debt to the Trade Union, because the accumulated membership subscriptions have not been transferred to the Trade Unions account. This debt is being paid gradually, according to schedule. The new collective contract in this organization has been signed only in March, 2010, which, to a great extent, has been facilitated by international solidarity. The Sectoral Trade Union, which is a member of the Union Global International, 77 appealed to it for assistance. Trade Unions of 37 countries sent letters to the President, Government and Post of Georgia. This was organized by the Union Global International. In their letters, international Trade Unions protested against the ignoring of labour problems, disregard of the Trade Unions, and pressure which the Trade Unions endured from the administration side. The contract signed as a result of such pressure was quite good. It ensures quality of the labour contracts, medical insurance, and two month compensation in case of dismissing. However, wages still remain extremely low that is objectively conditioned by the low income of the organization. The next steps envisaged by the Trade Unions in their activities imply incorporating relevant mechanisms for the protection of the rights of employees into the privatization contracts in case of privatization of the organization.

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Web site: http://www.uniglobalunion.org/Apps/iportal.nsf/pages/homepageEn

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5. Summary and Conclusions


Successful Social Dialogue may benefit the economic development, as well as the political stability of Georgia. The countrys economic development policy is based on the tactics of attracting investments by creating a most favourable business climate. Against a background of high unemployment and lacking protection of workers rights this policy may, in the long term, result in exploitation of labour resources and the exhaustion of the middle class as a side effect. In the absence of the Social Dialogue growing social tensions may cause destabilization. So, the successful dialogue is a means of preventing destabilization and a one-sided economic development of the country. Successful Social Dialogue requires a solid legal basis and a legislation that would be in line with internationally recognized labour rights. The Labour Code of 2006 is far from being perfect and has been subject to criticism ever since its adoption. The GTUC, NGOs and the ILO all speak of the necessity to improve and amend this Code. The improvement of the Labour Code is also on the agenda in the context of Georgias international relations: this topic receives attention from the EU and the USA, especially in the context of granting trade preferences to Georgia. Up till 2011 the Georgian Government refused to revise the Code. In future, the success of Social Dialogue will depend, to a great extent, on softening this position. Good legislation in itself cannot provide for adequate protection of workers rights if the existing practice is against it and the judiciary is not sufficiently independent. Unfortunately, even the much criticized Labour Code is often being violated in favour of the employers. The latter often use formal and informal methods to hamper the activity of Trade Unions in their enterprises. Trade Union leaders are being dismissed because of their Trade Union activity, whereas strikes conducted in accordance with the legislation and the Labour Code may be dispersed by the police. In cases like this, it is often difficult to get justice at court, so that it becomes necessary to appeal to European structures and international institutions. Success of a social dialogue depends to a great extent on the representation level and strength of its participants. The Tripartite Commission established in 2009 is operating under the Ministry of Labour, Social and Health Protection. GTUC represents the interests of employees, while GEA represents the interests of business. Institutional strengthening of all three parties of the Commission could contribute to increasing the effectiveness of the Tripartite Dialogue. The government policy prioritizes deregulation and flexibility of the labour market. As a result, the Government has no development strategy for the countrys labour resources and labour market. It does not conduct any study and analyses of these fields. There is no unit within the Government that would be responsible for labour relations problems. Labour inspection is revoked; registration system of unemployment does not exist. Authorities experience difficulties in arranging constructive dialogues with social partners without clearly defined labour policy and independent information sources. The Government can do much more than it is doing at present in order to develop labour resources and promote labour rights. In recent years, business, especially big companies, a considerable support from the Government. Now it is time to pay more attention to labour; otherwise labour resources will degrade, eventually handicapping the progress of business as well.

During the last years, Trade Unions worked hard for reorganization of their structure and operation mode. During several years after the Rose Revolution they had a successful period and they achieved increased activity, social recognisability, and organizational potential. Nevertheless, they still are not strong enough to be able to lead a social movement for the protection of labour rights. Attempts aimed at weakening and/or dissolution of Trade Unions, which took place during the last two years, had a significant impact on them. The challenges they faced called into question their existence and autonomy. The broadening of social support, as well as the development of new action plans and the ability of rapid response to unfavourable environment through anticipatory actions may ensure future survival of Trade Unions. The Employers Association and business representation in general also need to strengthen. Business in Georgia is not yet independent and protected to a level that could ensure equal partnership relations between economic subjects and the State. Independent business would be much more interested, pragmatic and constructive with regard to the labour relations than it is today. Diversification of the business interests according to sectors and company sizes would introduce some new dimensions into the content of social dialogue and its format. Broader society is not involved in a Social Dialogue process and is almost not informed about it. This puts the legitimacy of the dialogue under question. Introducing rational interests into Social Dialogue and seeking mutually beneficial compromise requires openness and transparency. The dialogue mode of relations between the parties must be clearly distinguished from attempts to make a deal. The position and strategy of all parties must be clearly comprehensible for all social groups represented by the parties. To ensure this, the parties must seek a mandate for a compromise or confrontation from those they represent, while entering the dialogue, or during it, and in critical moments. To ensure this, all parties must be equally represented in the media. This concerns not only labour, business and Government, but international actors as well. The parties of a dialogue have radically different standings concerning desirable labour policy. The Government and businesses would support continuation of the status quo; Trade Unions, on the contrary, are struggling to change the existing legislation and strengthen workers rights. Their vision is backed by international organizations. In a course of three years of tripartite meetings, when parties declared and discussed their visions, they could not yet reach any rapprochement and/or compromise of their standings. No successful cases of negotiations around the on-going labour conflicts have yet took place as well. The dialogue formally exists, but it is still far from contributing to the problems solving. International organizations, as well as the EU and the USA could play a positive role in giving a new impulse to it. Despite that the negotiations at national level have not yet succeeded, Trade Unions manage to succeed in arranging collective agreements in specific companies that somehow improves labour conditions of workers. Promoting Social Dialogue step-by-step, starting at company level, where it concerns the lives of concrete people in a more direct, pragmatic way, might be the most effective way to achieve consensus or compromise between employers and employees. Sure, one cannot expect that Social Dialogue will change radically its mode in the nearest future and that it will solve problems in short period. Successful implementation of social dialogue can be started by undertaking some small steps and achieving some moderate concrete results. However, even such modest success demands a very serious transformation within perceptions of the dialogue actors.

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Nearly a century of political arrangement based on a totalitarian dominant ideology left its trail in the political climate presently existing in Georgia. Simplistic, straightforward approaches still prevail in the country, hindering the establishment of pluralistic democracy, development of mutually beneficial cooperation, the confluence of liberty and equality. This relict climate hampers the development of Social Dialogue, because Social Dialogue is more than just a place for talking it is also a system of visions and expectations of its participants. The success of Social Dialogue depends to a great extent on the transformation of the focus of vision of its parties. This transformation implies replacing a one-dimensional, zero-sum model of relations by a twodimensional, cooperation-oriented one. Although labour and capital, the employer and the employee, are different variables of one economic system, there are two ways to view their coexistence: one, which implies only confrontation and controversy, and another which leaves space for cooperation and simultaneous development.

Decent working conditions must be in the interests of the Government and the capital just as they are in the interest of the workers. These conditions are not confined to the issues of wages and work safety. Decent work is possible only in a democratic working environment in the country and the enterprise. It implies a common interest of the employees, the employers and the State in seeking ways of joint development. Just the payment of wages and formalized requirements are not enough to provide for labour interests and capital efficiency. Unfortunately, at present, both in the state governance and in certain circles of employers, it cannot be felt that this is comprehended. When authorities have a clear vision of a policy, which, they believe, would promote the economic development of a country, it should be welcomed. However, excessive self-confidence on the side of the Government may become ruinous. If the policy is not analysed and corrected on a regular basis against practical reality, the policy looking rational on paper may be bringing exactly the opposite effect. To avoid too much self-confidence, politicians must have permanent contact with the society, for which this policy is being implemented. Social Dialogue must become one of the key institutes for this kind of communication.

Confrontational approach

Labour

Capital

Cooperation-based approach

Labour

Capital

Adopting the latter, cooperation-based approach by all parties to the Social Dialogue would facilitate its success; first of all, this applies to the Government as the most powerful of the parties. Labour legislation, being the stumbling block for the work of the Tripartite Commission, changes its meaning according to the point of view it is regarded from. The first, confrontational approach sees it meanly from the position of balancing. The main question being decided by a struggle of powers is, which interests it is going to favour those of the employer or those of the employed. From the cooperation-based point of view the meaning of this legislation becomes much deeper. It implies creating basic conditions, under which the relations between labour and capital facilitate mutual development and success. The employer is just as much in need of full-righted, equal and dignified workers as workers are in need of the capital that creates jobs.

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