The essential conditions of the labour contract and the legal consequences of their change
The basis of the labour relations is the agreement reached by the parties as a result of a freely expressed will, based on the equality of the parties. Depending on the content of the labour relationship, the principle of equality may change, with the employee often being subject to the influence of the employer's will. While both parties act according to their own will when concluding an employment agreement, it is worth noting that the employer typically holds more market power and can exert greater influence over the terms of the employment agreement compared to the employee. This power imbalance has led to the need for imperative legislative regulation to ensure that the principle of agreementual freedom in the context of labour relationships does not infringe upon the employee's right to free labour.
According to the Civil Code of Georgia, it is necessary for the parties to agree on the essential terms of the agreement for it to be considered concluded. Therefore, if any of the essential conditions are not agreed upon between the parties, the agreement cannot be deemed as concluded. However, it's important to note that this arrangement in labour law does not mean that the interests of the employee are restricted simply because the agreement may not fully specify all essential conditions.
In such cases, the employee has the right to request the employer to sign an additional written agreement that specifically addresses the essential condition not covered in the original employment agreement. Additionally, the Labour Code provides the employer with some flexibility by allowing them to send a notice to the employee to clarify certain aspects of work performance that do not alter the essential conditions of the employment agreement. Changes to essential conditions are only permitted with the agreement of both parties.
According to the Labour Code of Georgia, the following changes to the employment agreement are not considered alterations to essential terms:
a) Changing the place of work, as long as it takes no more than 3 hours a day to commute from the employee's place of residence to the new place of work using available public transportation, and such a change does not incur disproportionate costs.
b) Modifying the commencment or end time of work by no more than 90 minutes. However, it's important to note that altering both of these circumstances simultaneously is regarded as a change to the essential terms of the employment agreement.
It is noteworthy that the employment relationship inherently carries a power imbalance between the employer and the employee. To protect the employee from potential abuses of power by the employer, unilateral changes to the essential terms of the employment agreement are generally not allowed unless these changes improve the minimum standards of protection established by labour legislation in favor of the employee. Changing such essential conditions necessitates the mutual written consent of both parties. This requirement for mutual consent serves to maintain a higher level of protection for the employee, who is often considered the weaker party in the employment relationship, and it contributes to the overall goal of ensuring stable economic well-being within the country.
It is interesting to enlist what conditions create a binding employment agreement. In this regard, the Labour Code of Georgia includes an exhaustive list of essential terms, in particular its Article 14, according to which the essential conditions of an employment agreement are:
a) information on the parties to the employment agreement;
b) the employment commencement date and the duration of labour relations;
c) the working time and rest periods;
d) the place of work, and information on the different places of work of the employee if his/her regular or primary places of work are not determined;
e) the post (where applicable, with an indication of a rank, a grade, a category, etc.), the type and description of work to be performed;
f) the remuneration (with an indication of a salary and, where applicable, an increment), and the procedure for the payment thereof;
g) the procedure for compensating overtime work;
h) the duration of paid and unpaid leave and the procedure for granting said leave;
i) the procedure for the termination of labour relations by the employer and the employee;
j) the provisions of a collective agreement, provided that the employment conditions of employees are regulated differently under said provisions.
For more clarity, should be considered some of the essential terms of the employment agreement provided by the legislation of Georgia, which cannot be changed unilaterally by the employer and requires the consent of both parties:
The employment commencement date and the duration of labour relations
Even though the determination of the date of commencement of work and the duration of the labour relations is an essential term of the employment agreement, the failure of the parties to agree on this condition does not automatically lead to the nullity of the employment agreement.
Labour legislation is directed as much as possible to the protection of the interests of the employee as the "weaker party", that is the reason why Article 20 of Labour Code stipulates that “Where an employment agreement does not include any essential condition, it may be specified by the consent of the employee”. Thus, the legislation gives the parties the opportunity to maintain the labour relations and to alter, add or supplement important terms not provided for in the original agreement based on mutual agreement.
The working time and rest period
In a general sense, the Labour Code typically does not provide a strict definition of working time. Traditionally, working time is understood to encompass the duration during which an employee is actively engaged in performing their job duties. However, there are specific type of jobs that do not always require actual work, but the employee is obliged to be at the workplace during the working hours, within which time he will not be allowed to leave the workplace.
The regulation of regular working hours is delineated within Article 14.1 of the Labour Code, and the stipulated provision is of imperative to the extent insofar as safeguarding the interests of the employee is concerned. Pursuant to the aforementioned article, under normal circumstances, the standard duration of working hours should not surpass 40 hours per week. The duration of standard working time in enterprises with specific operating conditions requiring more than 8 hours of uninterrupted production/work process shall not exceed 48 hours a week.
Labour code regulates the working time of shits as well. The duration of uninterrupted rest between working days (or shifts) shall not be less than 12 hours
Moreover, Labour Code considers the employment of minors permissible, provided that the duration of working time of minors aged 16 to 18 years does not exceed 36 hours per week, and the duration of working time of minors aged 14 to 16 years does not exceed 24 hours per week.
Regarding the regulation of rest time, the Code does not specify the number of rest days (except the length of rest between shifts). In this regard, the legislator leaves the employer free to distribute the working time stipulated by the law on the days of the week. In addition, the Code doesn’t stipulates any reference to the necessity of a break in the work process.
In accordance with the foundational principles of labour law, the underlying objective of agreements pertaining to working hours and rest periods is the preservation of the health and safety of employees. The Constitutional Court of Georgia expounds that "the duration of the workday represents a pivotal aspect in facilitating the effective exercise of individual labour liberties. Excessive prolongation of working hours, devoid of opportunities for repose and revitalization, may imperil an individual's well-being or disrupt their customary social interactions. Moreover, the regulation of working hours is designed to establish equilibrium between occupational commitments and personal life, thereby safeguarding an employee's prerogative to engage with the broader society. To attain these objectives, the agreementing parties commit to meticulously delineating a judicious quantum of daily and weekly labour hours."
The place of work
According to Labour Code, it is not permitted to change place of work, as an essential term without first having employee’s consent first, except as long as it takes no more than 3 hours a day to commute from the employee's place of residence to the new place of work using available public transportation, and such a change does not incur disproportionate costs.
The post, the type and description of work to be performed;
For the comprehensive fulfillment of the provisions within the employment agreement by both the employer and the employee, it is imperative that the agreement explicitly delineates, on the one hand, the employee's role and the extent of responsibilities entailed, and on the other hand, the employee possesses a profound comprehension of the intricacies and particulars associated with the duties affiliated with the said position.
the remuneration and the procedure for the payment thereof;
Given that the employee renders services to the employer in exchange for a predetermined remuneration, the amount of compensation and the methodology governing its distribution represent pivotal stipulations, therefore unilaterally altering this condition on the part of the employer is impermissible.
Legislation affords the parties the liberty to specify the protocols for key issuance, the frequency of salary disbursement, and the rate of interest applicable in the event of salary delinquency. Nevertheless, it is important to note the overarching provision that mandates remuneration to be disbursed on a monthly basis. An employer shall pay an employee 0.07% of the delayed sum for each day of any delayed payment or settlement.
The labour legislation, driven by the objective of safeguarding the interests of the employee, protects the principle that the interest due for late salary payments should not fall below the prescribed threshold of 0.07 percent.
When labour relations with an employee are terminated, an employer shall make a final settlement within not more than 7 calendar days after the termination of labour relations, unless otherwise determined by an employment agreement or by law.
The procedure for compensating overtime work
In accordance with the provisions of the Labour Code, overtime is defined as labour undertaken by an employee with the mutual consent of the parties during a time frame that surpasses 40 hours per week for adults, 36 hours per week for individuals aged 16 to 18, and 24 hours per week for minors between the ages of 14 and 16.
"By agreement of the parties" means that the work should be performed only on the initiative and direction of the employer. The performance of excessive work by the employee on his own initiative is not considered overtime. The amount of the said payment shall be determined by agreement between the parties.
Overtime work is work performed by an employee by agreement between the parties for a period of time longer than the standard working time. Overtime work shall be paid for at an increased hourly rate of remuNonetheless, it is imperative to underscore that merely augmenting the total hours worked does not inherently encompass a nominal elevation in the standard hourly wage rate. In accordance with the International Labour Organization Convention, overtime remuneration should witness a minimum increase of 25 percent over the regular rate. Hence, it is upon the agreementing parties to expressly stipulate the escalated compensation rate. The absence of such delineation exposes the employee to the potential risk of not receiving equitable remuneration.
In this context, German legal doctrine provides specific guidance: "The compensation is deemed tacitly agreed upon when the circumstances suggest that the service is to be remunerated." In instances where tariff determinations are lacking, the German Civil Code stipulates that, in the presence of a agreement, the agreementual fee is deemed as agreed upon; in the absence of a agreement, the customary fee prevails.
Regarding overtime compensation, it is imperative that such remuneration be disbursed concomitantly with regular salary payments or that the employee be granted the right to enjoy additional rest within a reasonably brief period subsequent to the completion of overtime labour.
The duration of paid and unpaid leave and the procedure for granting said leave
The Labour Code distinguishes between paid and unpaid leave, leave due to pregnancy, childbirth and child care, leave due to adoption of a newborn and additional leave due to child care.
Similar to working time, the Code does not provide a definition of the concept of leave, however, according to the court's definition, it is “the free time when the employee temporarily does not perform the duties assigned to him. Leave is given to the employee every year, while maintaining the workplace and salary”.
According to Article 31 of Labour Code, an employee shall have the right to enjoy paid leave of at least 24 working days annually and unpaid leave of at least 15 working days annually. An employment agreement may define the terms and conditions different from those provided for by this article. Such terms and conditions shall not worsen the condition of an employee.
The right to vacation is aimed at ensuring the employee's health, recovery and rest. Therefore, according to the court's explanation, it is not allowed to exclude the use of the right to annual paid vacation or to replace it with monetary compensation.
Furthermore, it bears substantial importance to note that, in pursuit of protecting employee’s interests, the legislature has also delineated a circumstance wherein, during the execution of a employment agreement, the parties, in conjunction with the fundamental conditions as defined by Article 14 of the Labor Code, have the prerogative to accord essential status to any other condition. Consequently, when, by mutual agreement, a particular provision is designated as essential, any unilateral modification of said provision by either the employer or the employee becomes impermissible. Similar to other essential conditions, any alteration to such a provision necessitates the explicit consent of both parties involved.
