Capabilities, Employment and
Well-Being in Georgia
A case-study on the capabilities to work and voice in
the Georgian labour market
Alexander Medik | 6141102 | Alexander.Medik@student.uva.nl University of Amsterdam | 27 June 2014
Master thesis International Relations | Capability Approach Supervisor: Dhr. drs. Enzo Rossi
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Word of acknowledgement
I was born in Georgia in 1989. After the collapse of the Soviet Union Georgia fell into chaos and ethnic conflicts raged over the country. In 1994 my family fled from Georgia to The Netherlands due to the conflicts with Abkhazia and South Ossetia. My parents sacrificed their life in Georgia in order for my sister and me to have a better future and life. I would like to express my gratefulness to my parents by dedicating this research to them and thanking them for their sacrifices, choices and support.
This research would not have been possible without the support of the following people:
I would like to express the deepest gratitude to my supervisor Enzo Rossi who was abundantly helpful and offered invaluable, support, assistance and guidance.
I heartily thank my family and friends who supported me during the entire research period.
“Freedom is the real opportunity that we have to accomplish what
we value”
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List of abbreviations
EU – European Union
ALMP – Active labour market policy
VET – Vocational Education and Training system
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Abstract
The goal of this research was to analyse how the Georgian ALMP could be modified in order to improve the live-quality and well-being of Georgian (un)employed people using the capability approach as the theoretical framework. The capability approach implies that the main purpose of ALMPs should be to enhance the capabilities of the (un)employed in order to allow them to perform the job they have reason to value. The most relevant capabilities which can be optimized in ALMPs are the capabilities to work and voice and these can be optimized with sufficient social, personal and environmental conversion factors. The research question is: What is the most promising way to enhance the capabilities to work
and voice for Georgian (un)employed in order to improve their quality of life? In order to
answer the research question content-analysis was used and semi-structured interviews were conducted.
The findings of this research show that due to the obstruction of social and personal conversion factors and more important the absence of an capability-friendly institutional environment in the Georgian labour market the capability to work and voice cannot be adequately enhanced. The most promising way to enhance the capability to work and voice is firstly that the Georgian politics in general must accept the normative goal of individual freedoms and capabilities as a prerequisite for social justice and well-being in which the objective of the ALMP should be to enhance their capabilities. Secondly, it is important to create a capability-friendly institutional environment in which it is important to develop the following elements: the social security system; labour code; labour inspection; employment agencies; employee and employer institutions; state institutions; information system and the VET system. This will allow people to convert their resources into enhanced capability to work and voice. Finally, as this has been established the local employment agencies must be in charge of the implementation of the capability friendly policy in which the (un)employed should be the co-authors of the public policies in which they are enrolled.
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Table of content
Word of acknowledgement... 1 List of abbreviations... 2 Abstract... 3 List of figures……….. 5 1. Introduction……….. 6 1.1 European integration………. 7 2. Thesis………. 7 3. Theoretical framework………. 9 3.1 Capability approach……… 93.2 Capability approach & labour market policies………... 10
3.3 Opportunity freedom & process freedom………. 12
3.4 Capability to work……… 13
3.5 Labour law & capabilities………..…. 15
3.6 Training programmes & employability………. 15
3.7 Capability to voice……….. 17
3.8 Bottom-up: local agencies………. 18
4. Research Methods……… 19
4.1 Operationalization……….. 20
4.2 Population………. 21
4.3 Ethical responsibility……….. 22
5. Results……… 23
5.1 Characteristics of the Georgian labour market………. 23
5.1.1 High unemployment……….. 24
5.1.2 Long-term unemployment……… 25
5.1.3 High prevalence of self-employment………. 26
5.1.4 Underdeveloped infrastructure………. 27
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5.1.6 Vocational and educational training system (VET)……….. 29
5.1.7 Low income……….. 30
5.1.8 Satisfaction of employees……….. 31
5.1.9 Education level……… 33
5.1.10 New labour market & VET strategy……….. 34
5.2 Labour code……….. 35
5.2.1 Freedom of association & collective bargaining……… 36
5.2.2 Discrimination……… 38
5.2.3 Work, break and rest time……… 39
5.2.4 Dismissal……… 40
5.2.5 Contracts……….. 41
5.2.6 Collective dismissals………. 41
5.2.7 Safety conditions in the workplace……… 42
5.2.8 Unless otherwise provided by the labour agreement…….. 43
5.2.9 Implementation of the labour code……….. 43
6. Discussion………. 45
7. Conclusion……… 54
8. Bibliography……… 55
9. Appendices……….. 60
List of figures
Figure 1 From entitlements and commodities to achieved functionings……… 27Figure 2 Employment & Unemployment numbers of Georgia in thousand persons… 32 Figure 3 Access and mobilisation of social capital of (un)employed people……….. 33
Figure 4 Distribution of employed in %... 34
Figure 5 Distribution of Average Monthly Incomes in Million GEL……….. 38
Figure 6 Thoughts employees about substitution of their work position in %... 39
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1. Introduction
After Georgia’s rupture of the Soviet Union, many problems raised while transiting to modern market economy. Georgia, separated from the Soviet system and appeared to be separated from the global economic market as well and stayed alone in front of many problems. As a result Georgia experienced a high level of unemployment. While transiting to the modern market economy, people from Georgia turned out to be irrelevant to modern requirements and as a result, unemployment remained high. Despite the fact that the Georgian government carried out various activities in order to eliminate unemployment, no positive result was reached. Despite the fact that the last decade Georgia has gone through an impressive economic development in which the GDP increased significantly the country continues to face important (Kvaratskhelia & Mukbaniani, 2011).
Currently Georgia ranks 75th out of 194 countries in the United Nations Human Development
Index. Poverty remains a major concern with 27% of the population living estimated below the poverty line. The principal causes of this low ranking on the Human Development Index are mainly labour market problems, i.e. pow participation of the working age population (only 58% of the working age population is employed), low-paid insecure employment, high levels of long-term unemployment etc. Whilst official statistics indicate an unemployment rate around 15 % the real number is more likely to be close to 40%, in particular if one includes self-employed persons in rural areas who survive thanks to subsistence agriculture. The highest numbers of unemployment are among the Georgian youth, nearly 37% (Hammarberg, 2013; Kobzova, 2013).
This high unemployment rate has negative effects on the individual well-being of the Georgian population. Individual well-being (or quality of life) depends on many things, including labour, income, market status, job characteristics, health, family, leisure, social relationships, security, liberty, moral values and many others. One of the most damaging individual experiences among the working-age population is unemployment. Many previous studies have confirmed the negative and devastating effects of unemployment on individual well-being (Ahn, et.al, 2004).
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1.1 European integration
Currently, Georgia is witnessing an important transition period in history in which it is initialling its relations with the European Union (EU). On 29 November 2013 Georgia initialled the Association Agreement with the EU at a summit in Vilnius dedicated to the European Union’s ‘Eastern Partnership’ countries – ex-Soviet states (European Voice, 2013). In March 2014 the EU leaders have decided to sign the Association Agreement with Georgia no later than June, 2014 (Civil Georgia, 2014).
The Association Agreement is an investment in Georgia’s future, a tool for development. According to the Commissioner in particular, it will: introduce reforms that will progressively bring Georgia to resemble EU member states – politically, economically and socially; embed core European values of mutual respect, tolerance, and the rule of law into Georgian public life; bring predictability and consistency to public life, not only in the rules and regulations which govern economic activity, but also in the rights and services which citizens can expect from their government; and most importantly the agreement will deliver a higher quality of life to all Georgians (European Neighbourhood Info Centre, 2014).
2. Thesis
With the implementation of the Association agreement Georgia will face major
transformations on the labour market and windows of opportunity will open which could increase the life quality or well-being of the Georgian (un)employed people. Making use of this window of opportunity this research will examine the Georgian ALMP within the
framework of the capability approach of Amartya Sen. The capability approach will provide a comprehensive framework for conceptualising the quality of life and wellbeing of individuals with the central commitment being the dignity of each person (Powell, 2011).
In opposition to neoliberalism, the capability approach extends notions of development from that of economic growth and income generation to a notion of freedom which extends beyond income generation to include social engagement, political participation and the freedom to reflexively choose how to live one’s life (Powell, 2011) . Development in the capability approach is about expanding opportunities for people to live a life of value and remove substantial un-freedoms which limit ‘what a person is able to do or to be’ (Sen, 2005:
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p. 153). In this broader notion of development growth in Gross Domestic Product (GDP) represents the means rather than the end of development goals which, according to Sen (1999), should focus on the development and expansion of human freedom. History has shown that an increase in GDP does not in and of itself alleviate poverty or improve human lives as wealth and income are unequally distributed across societies and unevenly allocated within families, as is the case in Georgia with the high unemployment and badly working conditions (Powel, 2011; Dreze & Sen, 1995; Sen, 1989).
Raveaud (2001) has thoroughly underlined the requirements of the capability approach in the case of ALMPs:
“The capabilities of the person who needs help should not be evaluated a priori, when they are precisely in a moment of vulnerability, as in the example of the ‘unemployable’ person. On the contrary, they have to be assessed when taking into account what they will do with the resources
they will be provided with. The question is therefore not: ‘Is this person entitled to anything, according to the capacities I can evaluate now?’, but ‘What is this person entitled to, in order to develop his capabilities best?’ The question is no longer to look for ways to restrict help and make it conditional, or to expect certain attitudes and actions from the poor and the unemployed. It is on the
contrary to provide the persons with what they need in order to restore and develop their capabilities”
In the capability perspective, the objective of ALMPs should be to enhance the capabilities of their beneficiaries, i.e. to allow them to lead the life and perform the job they have reason to value. As a result, the yardstick against which public action in this field is to be assessed is not the increase in the employment rate (as it is the case in the EU Lisbon Agenda and its target of 70 % employment rate), but rather success and performance should be evaluated in terms of capability enhancement for recipients. The most important and relevant
capabilities which can be optimized in ALMPs are the capabilities for work and voice (Bonvin & Orton, 2009). This research, which could be classified as focussing on “process”, is mainly concerned with policy evaluation in terms of their effects on the capabilities of individuals, in this case the capability to work and voice (Goerne, 2010). Although the Georgian
government, with assistance of international actors, is developing new policies for the labour market, this research will focus on the current situation in Georgia. The research
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question is: What is the most promising way to enhance the capabilities to work and voice
for Georgian (un)employed in order to improve their quality of life?
In order to answer the research question the data-analysis is divided in two parts. The first question that needs to be answered is: What are the characteristics of the Georgian labour market? The analysis of this chapter will shed light on how the labour market infrastructure is set up in Georgia and what the main obstacles are for mainly unemployed but also
employed Georgians. The second questions that needs to be answered is: To what extent is it possible to improve the protection of the Georgian employees ? In this chapter the emphasize is put on the Georgian employees in which the Georgian labour code is being analysed on deficiencies in relation to protection.
The structure of the research is as follows. First, in the theoretical framework the capability approach will be described in which an emphasize will be put on labour market policies, capability to work and the capability to voice. In the theoretical framework various elements cut across different dimensions but it is important to discuss there from different angles. Second the methods used to conduct this research will be outlined. Fourth the data-results will be presented in which firstly the relevant Georgian labour market characteristics will be presented and secondly and emphasize will be put on the Georgian labour code. Fifth the main findings will be discussed in relation to the theoretical framework and the research question and additionally some limitations of the research will be discussed and suggestions for future research will be provided. Finally the conclusion will be presented in which an compact answer will be given to the research question.
3. Theoretical framework
3.1 Capability approach
The capability approach relies on two main distinctions. First, functionings; what a person actually is or does and capabilities; what a person can be or can do. Indeed, two people behaving in the same way do not necessarily have the same capability set, in example a non-eating person can be viewed as either as fasting or as starving. In the perspective of Amartya Sen public action should not centre on functionings but on capabilities, which puts
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the concern for individual freedom of choice at the very core of social intervention. As a result, the key objective of public policies or public action in the perspective of welfare should not be to put people back to work at all costs (i.e. a functioning), rather to improve their real freedom of choice in relation to the labour market (i.e. capabilities). This also implies a particular conception of individual responsibility: one cannot be considered as responsible if one not have been equipped with the means to use such a real freedom of choice (Bonvin, 2009).
The second distinction is highly correlated with the first one. It directs to the necessity to not to misinterpret commodities (or resources) with capabilities. Providing resources or
commodities, in resources or cash, does not result in the real enhancement of freedom to choice and of action of the recipients. To meet this purpose, the subject of conversion factors is also important. If one is not able to convert his/her resources into real freedom, then capabilities, which should be the very aim of public action in this dimension is
obstructed. The classical example of the bike illustrated this significantly: if one owns a bike, but at the same time does not know how to use it, or is not allowed to (due to religious, socio-cultural or other contextual parameters) or cannot ride it (due to the absence infrastructure), then the possession of the bike does not converts into real freedom or capability to move (Bonvin, 2009). As a matter of fact, resourcist approaches such as
Dworkin or Rawls are criticised by Sen. Sen claims that what should be equalised in order to promote development as freedom are not only in-kind resources of cash, but a whole
configuration comprising resources along with individual, social and environmental factors of conversion (Sen, 1982, 1999). Only an intervention aimed at the whole configuration will make it possible to adequately enhance the capability set of the people (Bonvin, 2009).
3.2. Capability approach & labour market policies
Hence, the capability approach requires that the consequences of these following two distinctions to be taken into account: a) On the one hand the employability is important. Recipients of ALMPs should be empowered, in which they should be adequately equipped in terms of capacity to act. According to Sen, beneficiaries should then be given sufficient material resources (e.g. cash benefits) and appropriate conversion factors giving the
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opportunity to convert these resources into enhanced capacity to act. Conversion factors include both individual aspects (skills and competencies), environmental (infrastructure) and social parameters such as the socio-cultural context. The enhancement of the capacity to act needs an adequate combination of the following factors: sufficient resources, individual abilities to use them, legislative provisions and non-discriminatory social values and available opportunities for valuable social and professional integration for all. If one of these factors will be missing, then the enhancement of capabilities would be obstructed (Bonvin & Orton, 2009).
Hence, in contrast with most recent activation strategies, the capability approach focuses on an encompassing perspective of the topic of empowerment. The perspective of active
security promoted in this perspective does not only implies to give the people
responsibilities, i.e. acting on individual conversion factors such as competencies and skills (in the so-called enabling version of social policies) or motivation (in the more constraining versions of ALMPs, close to workfare principles), it also implies acting on the other two dimensions. First it implies that basic social benefits cannot be made conditional upon the willingness to collaborate and behaviour of the recipients. Actually, reducing material well-being cannot be conducive to the capabilities’ enhancement. Secondly, it needs to promote adequate conversion factors to ensure that valuable opportunities for professional and social integration are available for all. Employability policies such as the ones developed in human capital approaches, must be completed by significant employment policies if activation strategies are to be turned into so-called “capacitation” policies that aim at enhancing the capabilities of the people (Bonvin & Orton, 2009).
b) On the other hand, the freedom to choose is crucial for the the capability approach and its goal on the real freedom to lead the life and perform the job one has reason to value. In this perspective, if people are significantly empowered, but are not free to use their capacity to act in the way they choose to, the goal of enhancing capabilities is missed (Bonvin & Orton, 2009). On the freedom to choose side, public action should not aim to impose particular behaviours or functioning on the people, but to enhance their real freedom , their capabilities. Thus, using factors of conversion and resources and impinging as little as possible on the people’s freedom to choose are two main prerequisites of a capability-friendly public action (Bonvin, 2009).
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3.3. Opportunity freedom & process freedom
To this purpose, two meanings of ‘real freedom’ have to be taken into account: opportunity
freedom and process freedom. On the one hand, people should have the possibility tp
participate adequatly in all stages of public policy making, i.e. implementation, assessment and design. They should not have the function of of passive beneficiary, but should be co-authors of the public policies of their country. Public policies should on the other hand increase the set of available opportunities for the (un)employed. As a matter of fact, the capability approach suggests that every person should be in a position to choose between valuable opportunities or alternatives. This notably contrasts with the call for adaptability (that often prevails in the field of welfare-to-work policies) in which people are not able to choose their way of life freely, but are forced to adapt their preferences to the existing social environment. In this latter case, people will adapt to unjust social norms or market conditions, which contradicts the idea of reciprocity at the core of the most contemporary transformations of public action towards more contractualism. In this, if contracting is equal to compelling the weakest part to adapt to imposed conditions by the more powerful then the notion of contract purely rhetorical and not capability friendly (Bonvin, 2009).
In contrast, the capability approach stands firm on a different notion of contract requiring that the most powerful part of the contract acts, as possible, in favour of the capability enhancement of the weakest part. Important in the capability perspective is the combination of both dimensions of freedom: the enlargement of the set of valuable opportunities needs to be completed by the possibility to voice one’s preferences,
expectations, wishes, etc. and to take them into account in the decision-making process. In this, the capability to voice is also very important and will be explained below. Allowing people to have influence on the various policy stages should result in the enhancement of real possibilities or opportunities of action. Otherwise this participation would be reduced to only a formal right. (Bonvin, 2009).
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3.4. Capability to work
According to Sen the capability to work is “the real freedom to choose the work one has reason
to value” (Sen, 2002). It is then implicitly recognised that work may be disutility in particular
situations, i.e. something one has no reason to value. The capability approach requires that all people should be significantly equipped to choose the job they have reason to value, escape from the constraint of valueless work, either through the possibility to negotiate the content of this job and transform it into something one “has reason to value” (Bonvin & Farvaque, 2005).
However the capability for work does not imply the removal of all constraints. On the contrary, it recognises that the opportunity set is necessarily constrained and limited, but it advocates a negotiated and fair construction of this constraint. The existence of a valuable exit option, for example decent unemployment benefits, is an important element of the capacity to negotiate the constraints related to work, rather than accept any conditions enforced by the employer. Within this perspective, social security and labour law are not only mechanisms created to protect the (un)employed: they are also the sine qua non conditions of ‘capability-friendly’ jobs. Both unemployment benefits (making the exit option valuable) and consistent labour law provisions (that make the voice option something different than wishful thinking) are necessary in this perspective (Bonvin & Farvaque, 2005).
Capability for work is unquestionably a freedom-based notion, which is directly related with the opportunity and process aspects of freedom (Sen, 2002). Processual freedom implies on the one hand the active participation of all the involved parties. In the case of employment policies this entails that all parties (job-seekers, trade unions, employers, civil officers, etc.) are able to take part effectively in the designing and implementing processes of labour market policies. In this view, payment of social benefits is not enough to guarantee the capability for
voice, defined as the ability to express one’s opinions and thoughts and to make them count
in the course of public discussion. The logic of processual freedom needs the agency perspective of the persons concerned (all of them, including job-seekers) is mobilised. In the public policy process they ought to be active partners of eachother. However, focusing mainly on processual freedom, (on the capability for voice alone) might cause negative side-effects (Bonvin & Farvaque, 2005). The exclusive insistence on individual active participation could coincide with a retreat of ‘social agency’, which may result in turn in hypertrophying individual
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responsibility, the whole burden of finding a valuable job lying will then be the responsibility of the job-seeker. To avoid this fair institutions and structures should be created. The guarantees provided by entitlements and social rights are important in this perspective (Bonvin & Farvaque, 2005; Nussbaum, 2000).
On the other hand, opportunities are important, and the content of the capability set depends on the value of every component. The opportunity set must be as inclusive and as possible as attractive, and this is surely the task of ‘social agency’. The capability for work cannot be reduced to a restricted perspective of employment policy (aiming at improving all job-seekers’ employability), but also implies the shaping of the social context to make it more socially and professionally inclusive. In other words, in a capability perspective, employability without corresponding employment is not possible. This is an important difference with traditional human capital approaches (Bonvin & Farvaque, 2005)
Hence capability for work needs a precise answer to the following questions according to Bonvin (2009; 60)
Do active labour market policies (ALMPs) increase the recipient’s capabilities vis-à-vis the labour market (opportunity freedom)?. If this is not the case, what should be done to promote capability-friendly ALMPs?
Are the people concerned involved in the ALMPs implementation and design (processual freedom)? If not, how could this be enhanced?
Thus, capability for work requires that ALMPs should adequately take into account all elements of the capability set. A ‘valuable job’ can imply a variety of meanings, and it is crucial that recipients are able to have their say in this perspective. In other words, If such issues are determined by representatives of the public administration in a top-down structure, then capability for work, defined as the real freedom to choose one’s job, is not significantly included. The indeterminacy of the public or official view about what is a valuable job is a necessary element to develop the capability for work (Bonvin, 2009).
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3.5 Labour Law & capabilities
According to Sen labour law provides the substantive freedom of choice on the part of individuals. Central to the capability approach is Sen’s notion of conversion factors that structure an individual’s capability by setting limits to the freedom of the individual to
achieve their wanted set of functionings. The notion of a conversion factor seems specifically apposite in a legal context due to the strong gatekeeper role that is typically performed by legal rules. The nature of the gate may be the cause of a variety of social pressures, but the law is perhaps the most blunt and direct implement for translating those pressures into a form controlling the ability to access institutional and societal resources (Anderson, 2009).
Deakin (2005: 3) states: “The capabilities of an individual depend on them having access to
the means that they need to realise their life goals”. These means include a minimum standard of living and “the resources needed to maintain an ‘active security’ in the face of economic and social risks”. Thus ‘real freedom of action’ for entrepreneurs, in the form of protection of property rights and the recognition of management prerogative, has its equivalent in guarantees of human resources for employees”
Employees, unlike employers, can do little to distribute risk. Deakin (2005) argues that the capability approach, unlike neo-liberal conception of labour law, accepts that employees need legal guarantees and protections if they are to participate in a market order, to have the freedom of choice and to live the life they have reason to value.
3.6. Training programmes & employability
Active programmes frequently focus on the necessity of enhancing the employability of people, thereby considering training programmes and skill improvement as an important tool to develop capability to work. These approaches are mostly named under the general label of ‘activation’ (e.g. active labour market policies, active welfare state, etc.), which designates the transformation of passive into active benefits (benefits aimed at facilitating the return into work) (Bonvin & Farvaque, 2005).
The theoretical framework for the ALMPs of today and in special in Europe, implies the enhancement of the employability of the people. De-commodification is no longer identified
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as the crucial goal of social policy and risks to give the path to what is usually called ‘re-commodification’. The new rationale of social policies, conveyed by these elements, is to develop and improve people’s ability to integrate in the labour market rather than to protect them from the market as it is with de-commodification. This perspective is focused on the individual, whose capacities are first analysed and then adapted in order to make people competitive in the labour market. The goal is to exploit the productive potential of the working age population. At the micro level this perspective strives to make people who are in search of a job more adapted to the demand of the labour market and at the macro level, the development of human capital is perceived in terms of improved economic competitiveness (Bonvin & Farvaque, 2005).
The shift of social policies towards employability lies at the centre of the European Employment Strategy, which was created in 1997 in order to co-ordinate national social and employment policies in the EU (Raveaud, 2001). The most recent editions of this notion have been labelled as ‘initiative employability’ and ‘interactive employability’. ‘Initiative employability’ implies that the (un)employed has the responsibility for their own trajectory in the labour market. In this framework, people are managers of their own career, risk-takers and responsible for their professional integration. In contrast, ‘interactive employability’, implies that individual trajectories are embedded in a local environment that could act as an element which could favour empowerment. The interactive employability concept entails an development of the scope of public action. If it maintains the focus on individual initiative, it fully integrates the perspective of social responsibility into the issue of providing adequate environmental and social conversion factors. In such a model of employability, a variety of actors (state, regional councils, non-profit sector, firms, etc) are actively involved in the provision of an effective opportunity set (Bonvin, 2004; Bonvin & Farvaque, 2005). And this is for instance the very idea at the core of transitional labour markets (Schmid & Gazier, 2002).
As Bonvin and Farvaque (2005) argue not all employability policies are capability friendly. In special, policies focused on “initiative employability’ do not meet the capability to work. Changes are necessary to bridge the gap between ‘initiative employability’ and capability, in particular in relation to complementing action over individual human capital with the creation of capability friendly labour market institutions. If a capability-friendly institutional environment is absent, human capital risks are being endowed with nothing but formal rights.
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Thus, the aim should be focus on individual employability with the creation of friendly conditions for making valuable and meaningful employment available for all (un)employed people (Bonvin & Farvaque, 2005).
3.7 Capability to voice
Above the capability to voice has already been discussed. This paragraph will go in more depth and will add new issues to the previous mentioned. In the capability perspective, capability for voice, which requires all involved people to actively participate in the policy process. Capability for voice depends logically on personal factors such as personal skills, but it relies more on the social factors and institutional environment and the ability of the environment to listen to the preferences of the people involved (rather than imposing a pre-constructed conception of what public policies should achieve) (Bonvin & Farvaque, 2005).
The concept of ‘situatedness’ is the most important element which distinguishes the capability approach. As Sen continuous is arguing, the people concerned should participate adequately in all normative and rule-setting processes (at all levels, be it political decision-making, collective bargaining or any other contractual rule-setting process). This does not imply that the claims of (un)employed will shape the end result of the regulation process, but that they should have the opportunity to effectively voice their concerns and to be listened to (Bonvin & Farvaque, 2005).
Top-down approaches are favourable in the capability perspective, as they locate the entire power in the central government or management at the expense of the local actors’ autonomy. In this they forbid the opportunity for reflexive regulation based on an exchange between the local and central levels, as well as the possibility of at any time revising the substantial content of regulation. In addition, top-down approaches convey a naturalised approach of a good policy, to which all actors involved are obliged to adapt themselves. In this model of public action ‘voice’ has no place whatsoever (Bonvin & Farvaque, 2005).
The capability framework does argue for the removal of all forms of central intervention, but it requires that it should be framed to allow the local actors to have their say in the policy process. If the creating process of the policy is hi-jacked by policy makers or experts, it entials that the needs of the people will be defined beforehand, without any concern for the specific
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individual situations. In this situation, the people’s needs, expectations, wishes, etc. are predetermined and imposed on the weakest. By contrast, the capability approach needs to provide the evaluators and implementers with more capability for voice so they will be able to better to integrate the preferences voiced by the beneficiaries. This can be achieved by local agencies (Bonvin & Farvaque, 2005).
3.8. Bottom-up : Local agencies
Local agencies in charge of policy implementation play an important role in the capability for work and voice. In the dimension of social policies, it is more precise to evaluate the capabilities of people from a ‘positional-objective’ point of view (Sen, 1993). The situated or positional perspective allows to get the most objective perspective of the situation of the (un)employed, diverging preferences, integrating personal heterogeneity issues, as well as the influence of the environment (all of them impacting on the individual capacity to convert commodities into capabilities or real freedoms). Thus, the positional-objective perspective permits to combine objective and subjective assessment criteria, as such it is also an ideal standpoint to criticise unjust institutions or structures and in this gives the possibility to reform (Bonvin & Farvaque, 2005).
In this perspective the action of local agencies is of crucial importance. Various studies have pointed to the positive contribution of the increasing rule-setting local agencies in the implementation process (Geddes & Benington, 2001). Before reduced to a large extent to mainly executive tools of centrally created policies, local agents are increasingly called upon to invent tailor-made rules in situation. The recommendations of the EU in relation to employment policies confirm this trend and implicitly refer to the capacity of local agencies to provide the ‘hardest-to-place’ with tailored and specific tools and opportunities (Bonvin & Farvaque, 2005).
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4. Research Methods
In order to answer the research question a qualitative research strategy is used. Firstly, this strategy is chosen because qualitative research is the most suitable for revealing the complex and in-depth issues that (young) people face in the Georgian labour market. It also provides specific insights to what extent the current labour market policies of Georgia are ineffective to enhance the Georgian people’s capability for work and voice and obtain perspective to what extent there are possibilities for the capability approach to fill this gap. The underlying restrictiveness, incompleteness and the associated possibilities can be revealed. Secondly, there is a lack of knowledge regarding how the capability approach can enhance the capability for work and voice on the Georgian labour market and a qualitative strategy can be used for exploration. Thirdly, this research not only focusses to understand, but is also meant to contribute to the capabilities and well-being of Georgian people.
A case-study design is chosen to place an intensive and detailed focus on the Georgian active labour market policies. The reason to choose to focus on the Georgian labour market policies is that Georgia is currently witnessing a high unemployment rate, in particular the Georgian youth. This high unemployment has negative consequences for the life quality and well-being of the people concerned. Moreover, with the initialling of the Association Agreement and the corresponding modification of the labour market policies, Georgia will have the opportunity to create an active labour market policy which can take into account the capability to work and voice of the Georgian people.
Two qualitative research methods are used in this research: content-analysis and semi-structured interviews. The content-analysis mainly consists of academic articles and official documents, i.e. Georgian government, European Union and various public institutions. In the first phase of the research, content analysis will be used to gain knowledge about the research topic. The findings from these documents will form the basis for the topics and questions in the semi-structured interviews. The information from the documents that is unclear, incomplete or missing can be clarified with the conduction of the semi-structured interviews. The more data is gathered from the content-analysis and semi-structured interviews the more interlinked the data gathering process between these two methods will be.
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Semi-structured interviews are chosen in which a clear focus can be set on the practices of the Georgian labour market policies; more specific issues can be tackled this way. Semi- structured interviews allows for a qualitative depth, because the conversation can be based on ideas, meaning and knowledge that are close to the interviewees themselves, which in turn enables the researcher to understand the meanings that the interviewees ascribe to different phenomena (Bergstrom, 2012). Furthermore, semi-structured interviews gives the possibility to explore general views and politically correct answers of the respondents in a more detailed, critical and in-depth manner. With the purpose of being able to give full attention to the situation and the respondent, all the interviews were recorded and the empirical data consists of interview transcripts (Bergstrom, 2012).
4.1 Operationalization
The operationalization of the capability approach is the most important challenge; partly because it seems to be a fruitful philosophical incursion into development ethics which faces disproportional difficulties in being implemented or empirically applied. However, quite often Sen has attached a strong practical meaning to his work related to the Capability Approach. For example, when discussing the conditions for an ‘appropriate’ approach to the evaluation of the stand of living Sen remarked that (1987:20) “the approach must nevertheless be practical in the sense of being usable for actual assessments of the living standard.
The analysis of the documents used for content analysis and the transcribed interviews was based on the characteristics of personal, social and environmental conversion factors as these factors are crucial in the enhancement of the capability to work and voice.
Personal factors: skills, intelligence, personal competencies.
Social factors: social conventions, norms, values, beliefs, social capital, discrimination
Environmental: social security, labour law, labour market infrastructure, employment agencies.
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Figure 1: From entitlements and commodities to achieved functionings
In addition the following important concepts from the theoretical framework were used which have overlap with elements of the conversion factors:
- Barriers to/in work; Freedom to choose jobs; In work training; Labour law protection; Skills enhancement and training; Social and economic opportunities people to find a job; Discrimination on the labour market; Negotiation and bargaining power; Participation of civil society in all stages of public policy making
4.2 Population
Purposive sampling is used for the selection of respondents for the interviews. Purposive sampling is chosen because it is fundamentally strategic and entails an effort to construct an effective relation between the research question and the sample. Moreover, with the use of purposive sampling it is possible to recruit respondents who are relevant to the research question, sub questions and the main themes from the theoretical framework (Bryman, 2008). With respondents from different levels who are closely involved with the Georgian labour market a comprehensive analysis can be given.Respondents were selected according to the following criteria: officials from the Georgian Department of Labour & Employment, officials from international organizations who are working on the Georgian labour market, officials from the employer and employee associations, people from Georgian non-governmental organizations working on labour market issues, Georgian expert on labour code issues. The
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first respondent is P. Zhorzholiani, who is currently the Head of Department of Labour and Employability in Georgia. The second respondent is K.Tapiola who is currently the Special Adviser of the Director-General of the International Labour Organization (ILO) who has been closely involved with the ILO activities in Georgia since 2006. The third respondent is Z. Shvelidze who is currently a Senior Associate at an respected Georgian law firm and for years is a visiting teacher at various universities around the world as he is an expert on civil and administrative law and dispute resolution, with particularly in-depth expertise in Labour Law. The fourth respondent is U. Bardak who is a senior labour market specialist at the European Training Foundation (ETF) and for several years has been involved in labour market issues, in special, vocational and educational training (VET) in Georgia and currently is working on a new VET system in Georgia. The fifth respondent is G. Aleksandria who is the vice-president of the Georgian Trade Union Confederation. The sixth respondent is M. Kordzakhia who is the vice-president of the Georgian Employers Association. The seventh respondent is G. Nanobashvili who is the Economic Development Team Leader at United Nations Development Program in Georgia. The eight respondent is T. Kanashvili who is the Head of the Non-governmental organisation ‘Speak Up’ which focuses upon skills enhancement of the Georgian youth.
4.3 Ethical responsibility
Ethical principles were taken into account. First, the respondents was given as much as information as might be needed to make an informed decision about whether or not they wish to participate in this research. All of the respondents were approached by e-mail in which as fully as possible, and in terms meaningful to participants, was explained what the research is about, who is undertaking it, for whom the research is conducted and how the interview would be conducted. Second, the desires of anonymity of the respondents was taking into account, but none of the respondents made it clear that they preferred to be anonymous. Third, once the data from the conducted interview is incorporated in the research, the respondents is given the opportunity to receive their transcribed piece of information in order to exclude incorrect information. Fourth, the data obtained from the interviews which is personal and intimate will be treated with the highest care as nobody but the researcher and his supervisor would be able to read or listen to the interview. Moreover, the collected data will be safely stored (Bryman, 2008).
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5. Results
In this chapter the results of the content-analysis and the semi-structured interview will be outlined. First the characteristics of the Georgian labour market will be outlined in which some results will overlay but are described from another angle. Secondly the main incomplete characteristics from the Georgian labour code are being presented.
5.1 Characteristics of the Georgian labour market
After the collapse of the Soviet Union in the 1990s in all post-socialist countries, and inter alia, in Georgia, the system of labour market formation and peculiarities were determined by abolishment of the system of socialist planned labour distribution, formation of free labour market, creation of insurance systems for unemployment and realization of the active policy for employment (Tukhasvhili & Zubiashvili, 2012)
The formation of the Georgian labour market started under conditions of economic collapse, the economy of post-socialist countries was been paralyzed because it remained without partners and commodity markets. Economic and social crises deepened simultaneously and ethnic conflicts escalated dramatically. Due to these conditions the labour force of Georgia remained without function and prospects (Interview Svhelidze, 2014; Tukhasvhili &
Zubiashvili, 2012) .
The government that come to power in Georgia after the ‘Rose Revolution’, changed its view on Georgia’s development and the political framework was constructed on the principles and values of ultra-neo-liberal economy. This neo-liberal approach resulted in de-regulation, putting all its legislative efforts of minimizing Georgian state restrictions and barriers for business activities and promoting free market in which the Georgian government aimed at establish free liberal economy and attractive climate for foreign investments. The rankings of the World Bank project – Doing Bussiness ranking which measures business regulations, provides a clear illustration of the liberal orientation of Georgia during that period. In the Doing- Business report of 2010 Georgia ranked the 11th place in the list of 183 countries. In
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the list of countries from Eastern Europe and Central Asia, Georgia holds the first place (Shvelidze, 2012). Despite these positive facts the labour market infrastructure was totally diminished and the people were not ready for it (Interview Kordzakhia, 2014).
In 2006 the Saakasvhili government in fact, abandoned labour market policies and
institutions: it abolished the “State Program for Employment And Social Protection of the Unemployed”, Department of Labour and Employment, State Employment Agency, State Labour Inspection, Institute for Labour Medicine & Hygiene (Interview Aleksandria, 2014; Interview Shvelidze, 2014; Interview Zhorzholiani, 2014). The ministry of Labour, Health and Social Affairs of Georgia had gradually been deprived of responsibilities in the field of labour and employment and in the period from 2006 to 2012 the word ‘labour’ stood just formally in the title of the Ministry (Georgian Department of Labour and Employability, 2013).
5.1.1. High unemployment
In the result of the of the economic breakdown after the collapse of the Soviet Union the number of jobs in Georgia reduced dramatically and unemployment became a widespread phenomenon in Georgia. Despite the impressive improvements of major economic indices after the Rose Revolution the unemployment rate has been increasingly steadily and did not improve significantly (Georgian Department Labour and Employability, 2013; Interview Tapiola, 2014; Interview Bardak, 2014).
According to the data of National Statistics of Georgia (figure 2), the number of economic active population in 2013 (a person at the age of 15 or above who works or offers his/her labour for production of the services or products, that fall within the frame of domestic product as determined in the national documents of the United Nations), consisted of 20003.9 thousand people. Among them, 1712.1 thousand people were employed and 291.8 thousand were unemployed. From 2005-2007 the level of unemployment in Georgia
decreased whilst in 2008-2009 this number increased considerably, over three percent. In 2010-2012 there was a decline in the number. The number of the economic active
population in Georgia is rather a variable index. That is why the decline in unemployment might not imply the decrease of the number in absolute data. For instance, the
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up to 10.0 thousand people. Taken the period of table 1 (2005-2012) the highest level of unemployment (16,9%) was noticed in 2009 followed by the lowest unemployment rate in 2008, which was caused by the war between the Russian Federation and Georgia (Kvirkvaia, 2013a).
According to the National Statistics Office of Georgia the unemployment rate in 2013 was 14,6%, whereas some experts and respondents estimate it to be as high as 35% or even 45-50% when, self-employment, underemployment or inefficient employment is considered.
Figure 2: Employment & Unemployment numbers of Georgia in thousand persons.
5.1.2. Long-term unemployment
According to Zhorzholiani (Interview, 2014) of the Department of Labour and Employment long-term unemployment is currently one of the urgent issues in Georgia. In the result of a prolonged economic stagnation, lacking government support of employment and
underdevelopment of a labour market infrastructure, the unemployment in Georgia has taken the form of a ‘long-term unemployment’. Almost 2/3 of job-seekers are unemployed for a protracted period of more than one year and this is causing for ‘discouraged people’ and a loss in social capital for the unemployed (Georgian Department of Labour &
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Figure 3: Access and mobilisation of social capital of unemployed and employed people
5.1.3. High prevalence of self-employment
Similar to other developing countries, high prevalence of self-employment is one of the characteristics of the labour market in Georgia. As mentioned before the situation is more complex than the positive unemployment rate of 14.6% in 2013. In 2013 (figure 4) from the total active labour population 61.3% was self-employed against 37.7% was hired. Such a high prevalence of self-employment in Georgia is the result of complex socio-economic
developments which took place in Georgia in the 1990’s. The rise in self-employment is, in fact, a response of the society to the deterioration of terms of employment, an increase in unemployment, a decline in the standards of living etc. (Georgian Department Labour and Employability, 2013).
The absolute majority of the self-employed in Georgia are engaged in informal and unregistered activities. According to Kvaratskhelia & Mukbaniani (2011) and several respondents most of the individuals classified as ‘self-employed’ are working in the
agricultural sector, only cultivate for their family needs, are not satisfied with their position and most of these people consider themselves as unemployed and are ready to work.
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Figure 4: Distribution of employed in %
Only 38,7 percent in Georgia are in hired employment. More than 40 percent of those in hired employment are employed in state, mostly in public sector. Thus, the scope of the labour market in Georgia is limited (Georgian Department Labour and Employability, 2013).
5.1.4. Underdeveloped infrastructure
According to all the respondents the Georgian Labour Market infrastructure is
underdeveloped. The grounds for such an assessment are as follows: legal framework for state regulation of employment ‘law on employment’ was abolished in Georgia in 2006; no special state programs for social protection and employment promotion of the unemployed are in place; there are no state employment agencies, except in the Adjara Autonomous Republic; national and private systems of vocational and adult education/training are both underdeveloped; the system of vocational orientation, consultation and career planning is underdeveloped; no mechanism to support employment of persons with disabilities and other groups bearing social risks exists; as mentioned before important labour market institutions were abolished in 2006 (Georgian Department of Labour and Employability, 2014). The ‘Department for Labour and Employment’ is currently responsible for the
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and is still very weak to operate effectively (Interview Shvelidze, 2014; Interview Tapiola, 2014; Interview Nanobashvili, 2014)
Currently, the new government still faces the negative legacy of the previous government:
“So much of the thinking both on economic and labour market side is still relying on that the market could or would automatically take care of employment issues. This is an neo-liberal way of looking at it and does not works in practice” (Interview Tapiola, 2014).
Moreover, although there exist some private employment agencies and specialised web-sites for employment promotion (www.jobs.ge; www.hr.ge; www.hr.gov.ge) they only partially satisfy the demand for intermediary services in the labour market and do not eliminate the need of creating public employment agencies through the country. Tapiola (Interview, 2014) confirms this view: “What worries me the most is the weakness of the
institutions which deal with labour market issues”. In the institutional framework you got both the state institutions, the parties in the labour market and the dispute settlements of mediators etc. All these institutions need to be seriously strengthened and developed”.
Although the Georgian Trade Union Confederation and the Employers Association in Georgia have made a significant progress in the past years and provide effective opportunities for their people to develop various skills, their mechanisms are still not adequately equipped to provide significant results (Interview Tapiola, 2014).
5.1.5. Labour market information & soft skills
At the current moment there is a lack of detailed and reliable information and studies about the current and expected trends in the economy and in the employment sector which is needed to ensure the flexibility of the labour market. Such studies are performed regularly only by scholars, international and donor organizations but are limited in scope and
insufficient. Shvelidze (Interview, 2014) states: “There is no clear registration of our labour
market and employment issues. I do not see any efficient results yet, but of course it takes time”.
Low mobility of the labour market mostly determines low occupational mobility of the labour force. The low mobility of the work population is also determined by the
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underdevelopment of a labour market infrastructure when people have no access and/or do now know where and to whom to apply for needed information, how to develop their vocational and self-presentation skills, how to seek for a job, how to prepare relevant documents, how to prepare and conduct an interview, etc (Georgian Department of Labour and Employability, 2013).
The development of these soft-skills or non-formal education are very important for the Georgian people according to Kanasvhili (Interview, 2014). Only four years ago soft-skill training and non-formal education entered in Georgia and the organization of Kanasvhili ‘Speak Up’ was one of the first one which introduced it: “My organization is about
developing the English language, leadership skills, project management, cv-writing, time management, debating, public speaking, power of motivation, human rights, but also we teach people how to find a job, or an internship/study abroad and we provide them with the necessary information.”
According to Kanashvili (Interview, 2014) many people do not see the positive effects of soft skill enhancement and want direct results: “I have approached almost all training centres in
Georgia to convince them that investment should be done in the soft skills in Georgia and that soft skills are necessary for the population. If you do not have the skills to be flexible and adoptive it will be difficult to find a job’’. Kanasvhili (Interview, 2014) continues by stating
that there are only approximately five organizations in Tbilisi and only two organizations in the mainland who are willing to enhance the soft skills of the youth.
5.1.6. Vocational and educational training system (VET)
According to Tapiola, Shvelidze, Bardak, Zhorzholiani and Nanobashvili (Interview, 2014) the VET system in Georgia is highly underdeveloped and is one of the most important issues which should be addressed at the moment. Despite a number of positive changes which have been introduced to the VET system in the last years there are still many challenges: in terms of orientation to the labour market; training infrastructure; lack of relevance of VET programmes to the current and future labour market needs; the need to present VET to students as an attractive and rewarding pathway into employment; and to employers that Vet qualifications are a solid foundation for employability; low and variable quality of VET
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qualifications; the need to upgrade the skills and capacities of the VET educator in line with modern standards and to enhance the quality of VET curricula; no comprehensive network of public and private VET providers; no VET information system (Interview Bardak, 2014).
Tapiola (Interview, 2014) points out another issue: “Currently, if the employers do training
and essentially leave the vocational and training systems to the markets, the markets will develop those skills that are needed in the short term. But this will not automatically lead to a VET system, which is missing”.
5.1.7. Low income
The issue of ‘working poor’ is very pressing in Georgia. The gist of the problem is that income from employment of certain categories of workers is less than the subsistence minimum. Compared to the year 2000 an average monthly salary increased by 9 times by the year of 2011. The absolute number was 636.0 GEL or 385 dollars. Despite the average salary of the employee has increased in recent years, given the unreasonable high difference in salaries (both in public and private sector) earnings of a sizable portion of the employed is not high enough to maintain even their livelihood. For instance in the field of education an average monthly salary in 2011 was 319.6 GEL (194 dollars) and in agriculture it was 392.6 GEL (240 dollars). Moreover income from employment constitutes less than 1/3 of households’ total income (Georgian Department of Labour and Employability, 2013; Kvirkvaia, 2013a;
Interview Shvelidze, 2014).
The smallness of incomes received from labour employment stimulates ‘secondary
employment’ for employees. In the current situation it is the only real way for supplement to the incomes of many families (Tukhashvili & Zubiashvili, 2012). The secondary labour market is another factor which determines high percentage of persons with higher education and of the youth among the unemployed. A large scale of the secondary labour market has a negative impact on the employees, like: low-skilled and unskilled jobs, harsh working
conditions, low paid etc. The scope of the ‘primary labour market’ with its high-skilled staff, working conditions, high wages, is rather limited and basically confined to public
administration and financial sectors (Interview Nanobashvili, 2014; Georgian Department of Labour and Employability, 2014).
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Figure 5: Distribution of Average Monthly Incomes in Million GEL
5.1.8. Satisfaction of employees
People who have a job in Georgia are powerless on the job marker, which can be illustrated from the dominant feeling among employees, that employers can easily find a substitute to any employee from the labour market, students of universities or other organizations. A research was conducted on this issue in Georgia and all the participants were employed at the time. The main aim was to understand their view on how easy or difficult it would be to replace them by other people. The results are shown in the next diagram.
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Figure 6: Thoughts among employees about substitution of their work position in %
The majority of the participants (74%) is convinced that an employer will be able to easily replace them from different sources of hiring. Only 2 percent is convinced that an employer will not be able to replace them and 20 percent assume an employer will be able to replace them but with difficulties (Kvirkvaia, 2013a). These findings are being confirmed by the head of the
Moreover, most of the employees are not satisfied with their work place and position and are ready to alter the work opportunity. In the following graphic (figure 4) the satisfaction of employees about their work place and position is illustrated.
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According to this diagram the majority of the employees (59%) are not satisfied with their current job and (24%) is even unhappy.
5.1.9. Education level
When talking about unemployment another important issue for attention is the education level of the Georgian people. According to the Human Development Report 2010 Georgia is one of the leading countries of an unemployed workforce with a secondary or higher
education level (Economic Policy Research Centre, 2011). Over 50 % of the unemployed have completed secondary education and 40 % are university graduates (European Training Foundation, 2014). It can be explained either by high standards for education accepted by the population (a large share of individuals with higher education in the population) and high expectations and demands of factorable terms of employment or by a considerable
structural and qualitative mismatch between supply and demand, the overproduction of certain specialists with higher education and limited opportunities for pursuing a profession.
Shvelidze states (Interview, 2014): “What is interesting is that the Labour Market is
overloaded with so-called prestigious professions like lawyers, business and economist professions and less in the sphere of technical professions. This demand-supply discrepancy is a big problem which affects the labour market and the opportunities for the people”.
Tamar Kanashvili (Interview, 2014) explains it as follows: “The biggest issue regarding the
education is that the students are choosing general popular subjects. One of the most popular is Business Administration. She continues “Technical education subjects are not popular and the government is not very active to promote these despite the fact that there is a high demand on the labour market for technical graduates”
According to Kanashvili (Interview, 2014) the Georgian government is not providing enough information to the youngsters about these issues: “In Georgia there is a tradition that
everybody should have an university degree and not everybody knows what they want in life. When secondary education is finished there is no information about the possibilities in technical studies and therefore youngsters choose what is familiar with them which are mostly business studies”.
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The Georgian Department for Labour and Employability (2013, p. 16) confirms this view:
‘Underdeveloped professional orientation system for youth and job seekers remains to be a pressing problem. There are no description of professions available in Georgian (incl. lack of printed, electro or video materials).
5.1.10. New Labour market & Vocational education and training strategy (VET)
Currently, the Georgian government together with national and international actors is actively working on the development of the all the before mentioned issues related to the labour market.
The ministry of Labour, Health and Social Affairs finalised a draft Labour market Strategy in 2013, which has its principle goals to increase employment opportunities, reduce
unemployment, ensure the optimum use of the country’s human resources, improve the quality of the labour force and increase the competitiveness on the labour market. The action plan targets five central measures: establishment/improvement of the legal base; formation/development of the labour market infrastructure in order to enhance the range and quality of services available to the unemployed; improved labour market information, through the institutionalization of labour market analysis and the establishment
/development of a labour market databases; ensuring greater synergy between the needs of the labour market and the provisions of the VET and continuing education systems; and supporting legal, temporary migration. The ministry already has already planned to establish 63 local employment support offices, covering all districts within Georgia. A long-term strategy and action plan will be ready in the third quarter of 2014 (European Training Foundation, 2014).
Secondly, a draft strategy for the development of VET (2013-2020) has been developed with EU support and is accompanied by a detailed Action Plan (2013). The draft Strategy will be finalised and approved in September 2014. The central objectives are to promote greater synergy between the VET system and labour market needs, to ensure full employability of VET graduates in meaningful and, where appropriate, well remunerated and personally rewarding occupations, and to create opportunities for individuals from all segments of
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society to develop their talents and maximize their potential for personal and economic fulfilment. The VET strategy will directly and indirectly be focused on tackling the problems identified above in the VET paragraph (European Training Foundation, 2014).
According to the European Training Foundation (2014) the preparation of these strategies has followed an open and consultative process: representative of the social partners, civil society organisations and public and private sectors providers have been involved in the policy-making discussions and the decision-taking arrangements. The Action Plans also includes roles for these actors in the implementation of the planned measures and sub-measures.
5.2. Labour Code
After the collapse of the Soviet Union, employment relationships in Georgia were still regulated by the outdates Soviet Labour Code (1973). In 1997, changes were made to the Labour Code. However, the existing Labour Code still contained Soviet elements that were inconsistent with the principles of the market economy. After the “Rose Revolution” in November 2003, the Georgian government radically changed its view on Georgia’s development (Shvelidze, 2011).
The political agenda was constructed on the principles and values of neo-liberal economy. In 2006 the Georgian parliament replaced its Soviet Labour Code and adopted a new Labour Code in which the following was stated: “Labor Code of Georgia forms liberal approaches
towards legal regulation of labor relations. From this perspective, the main legal principle of the document represents the diminishment of the possibilities of intervention by the state into legal relations and the providence of the freedom of action for the parties in this sphere”
(Kvirkvaia, 2013b).
The Labour Code of Georgia was based on profoundly new principles oriented on ‘less’ regulation of labour relations by the state and where the relations mainly depend on the agreement between an employee and an employer. With this liberalization of labour relations, Georgia had one of the most liberal Labour Code in the world.
