Employment Law in Georgia

Georgia's Labour Code (Შრომის კოდექსი, hereinafter the Labour Code) governs all employment relationships in the country and sets out a framework that is notably more flexible than most European jurisdictions, yet contains procedural traps that regularly catch international employers off guard. Understanding the rules on employment contracts, termination, redundancy, and compensation is essential for any business operating in Georgia, whether a local subsidiary, a representative office, or a foreign company hiring Georgian residents remotely. This article covers the full lifecycle of an employment relationship under Georgian law - from contract formation through dispute resolution - and identifies the practical risks that matter most to international business owners and senior managers.

An employment contract in Georgia is a written agreement between an employer and an employee that defines the scope of work, remuneration, working hours, and duration of the relationship. The Labour Code requires the contract to be concluded in writing, and while oral agreements are not void per se, the absence of a written document shifts the evidentiary burden entirely onto the employer in any subsequent dispute.

Georgian law distinguishes between fixed-term and open-ended contracts. A fixed-term contract may be concluded for a period not exceeding three years. Repeated renewal of fixed-term contracts for the same position and the same employee can, in practice, be recharacterised by a court as an open-ended relationship, particularly where the work is of a permanent nature. This is a non-obvious risk that many international employers discover only when a dispute arises.

The Labour Code, Article 6, sets out the minimum mandatory content of an employment contract:

• Full identification of both parties.
• Description of the work to be performed or the position held.
• Place of work and, where applicable, conditions of remote or mobile work.
• Remuneration amount and payment schedule.
• Working hours and rest periods.
• Duration of the contract where fixed-term.

Probationary periods are permitted under Article 9 of the Labour Code and may not exceed six months. During the probationary period, either party may terminate the contract with three calendar days' written notice, without any obligation to state reasons. Once the probationary period ends, the full termination regime applies.

A common mistake made by international employers is importing contract templates from other jurisdictions - particularly from EU member states - without adapting them to Georgian requirements. Clauses that are standard in Germany or the Netherlands, such as post-termination non-compete obligations enforceable through injunctive relief, have uncertain legal standing in Georgia and may be unenforceable as written. Georgian courts apply the Labour Code and the Civil Code (სამოქალაქო კოდექსი) in parallel, but the interaction between the two bodies of law is not always predictable.

Remote work arrangements, which became widespread after 2020, are now addressed in the Labour Code through amendments that require the remote work regime to be expressly agreed in writing, specifying the employee's place of work, equipment provision, and data protection obligations. Failing to document remote work properly exposes the employer to claims that the employee was working at the employer's premises and is therefore entitled to full on-site benefits.

To receive a checklist on employment contract drafting and mandatory terms for Georgia, send a request to info@vlo.com.

Georgian employment law sets a standard working week of 40 hours, with a maximum of eight hours per day under Article 14 of the Labour Code. Overtime is permitted but must be agreed in writing and compensated at a rate of at least 125% of the standard hourly rate. Employers who rely on informal overtime arrangements - common in start-up and technology environments - face retrospective claims that can accumulate over years.

Annual paid leave is a minimum of 24 calendar days per year under Article 21. Employees are also entitled to 15 calendar days of unpaid leave per year on request. Maternity leave is 730 calendar days in total, of which 183 days are paid by the state through the Social Service Agency (სოციალური სამსახური). The employer's obligation is to preserve the position and to pay any contractually agreed top-up. Failure to reinstate an employee returning from maternity leave is treated as unlawful dismissal and triggers the full compensation regime.

Georgia does not set a statutory national minimum wage in the traditional sense. The Labour Code does not prescribe a universal floor, and minimum remuneration is instead addressed sector by sector through collective agreements or, in the public sector, through government resolutions. For private employers, this means that the agreed contractual salary is the binding floor, and any unilateral reduction requires the employee's written consent under Article 26.

Salary payment must be made at least once per month. Delays in payment give the employee the right to suspend work after a written warning, and prolonged non-payment can constitute grounds for the employee to terminate the contract at the employer's fault, triggering severance obligations. In practice, salary disputes are among the most common employment claims filed with Georgian courts.

Tax and social contribution obligations are straightforward by regional standards. Income tax is a flat 20% withheld by the employer. Pension contributions under the Law on Accumulative Pension (დაგროვებითი პენსიის შესახებ კანონი) are 2% from the employee, 2% from the employer, and 2% from the state, applicable to most private sector employees. International employers sometimes underestimate the pension contribution obligation when structuring compensation packages, leading to underpayment and subsequent penalties from the Revenue Service (შემოსავლების სამსახური).

Termination is the area of Georgian employment law that generates the most disputes and the most significant financial exposure for employers. The Labour Code sets out an exhaustive list of grounds for termination in Articles 37 and 38, and courts interpret this list strictly.

Permissible grounds for employer-initiated termination include:

• Liquidation of the employer entity.
• Reduction in workforce or elimination of a position (redundancy).
• Expiry of a fixed-term contract.
• Employee's systematic failure to perform duties after a written warning.
• Gross misconduct, including breach of confidentiality, theft, or violence in the workplace.

The procedural requirements are as important as the substantive grounds. For termination based on performance or misconduct, the employer must issue at least one written warning, allow the employee a reasonable opportunity to respond, and document the entire process. Courts have consistently set aside dismissals where the warning was issued and the termination followed within days, finding that the employer did not genuinely allow the employee to remedy the situation.

Notice periods under Article 38 depend on the ground for termination. For redundancy, the minimum notice period is 30 calendar days, or the employer may pay 30 days' salary in lieu of notice. For termination based on performance after a warning, the notice period is also 30 calendar days. Termination for gross misconduct may be immediate, but the employer bears the burden of proving the misconduct to the court's satisfaction.

Severance pay is mandatory in redundancy situations. Under Article 38(3), the employee is entitled to at least one month's salary as severance, in addition to any notice payment. Contractual severance provisions that exceed this statutory minimum are enforceable and frequently included in senior executive contracts.

A non-obvious risk arises in group redundancy situations. Georgian law does not impose the collective consultation obligations found in EU law, but where a company eliminates multiple positions simultaneously, courts scrutinise the selection criteria closely. If the employer cannot demonstrate objective, documented criteria for selecting which positions were eliminated, the termination may be recharacterised as targeted dismissal and found unlawful.

The risk of inaction is significant. An employee who believes their dismissal was unlawful must file a claim with the court within one month of receiving the termination notice. However, the employer's exposure does not end at one month - if the employee files within time, the court may order reinstatement and payment of all salary for the period of unlawful dismissal, which can extend to the date of the court judgment. In complex cases, this period can reach 12 to 18 months, making the financial exposure substantial.

Redundancy (შტატების შემცირება) is a legitimate ground for termination under Georgian law, but it requires careful procedural compliance to withstand judicial scrutiny. The employer must demonstrate that the position was genuinely eliminated, not merely that the employee was replaced by someone performing the same functions under a different job title.

The procedural sequence for a lawful redundancy in Georgia is as follows:

• The employer adopts an internal decision (order or resolution) documenting the business reason for the restructuring.
• The employee receives written notice at least 30 calendar days before the termination date.
• The employer pays the statutory severance of at least one month's salary on or before the last working day.
• The employer issues a final settlement, including all accrued but unused annual leave, calculated at the daily rate of the employee's salary.

Accrued leave payment is a frequently overlooked obligation. Under Article 21 of the Labour Code, unused leave must be compensated in cash upon termination regardless of the reason for termination. Employers who fail to include this payment in the final settlement face claims that are straightforward to prove and difficult to defend.

Georgia does not require prior approval from any government authority for redundancies, including large-scale ones. There is no obligation to notify the Labour Inspectorate (შრომის ინსპექცია) before implementing redundancies, although the Inspectorate has broad powers to investigate complaints after the fact. This absence of pre-approval requirements makes restructuring faster than in many European jurisdictions, but it also means that procedural errors are not caught in advance and surface only in litigation.

Practical scenario one: a technology company with 15 employees in Tbilisi decides to close its Georgian development centre and transfer the work to a team in another country. All 15 positions are eliminated. The employer must provide 30 days' notice to each employee, pay one month's severance, and compensate all accrued leave. If the company attempts to accelerate the process by paying in lieu of notice without documenting the business rationale, and one employee challenges the termination, the court will examine whether the redundancy was genuine. Provided the documentation is in order, the risk of successful challenge is low.

Practical scenario two: a retail chain eliminates three out of ten sales manager positions. The employer selects the three employees based on undocumented criteria. Two of the three selected employees are women who recently returned from parental leave. A court examining this situation will apply heightened scrutiny and may find that the selection was discriminatory, converting the redundancy into an unlawful dismissal with full reinstatement and back-pay consequences.

Practical scenario three: a foreign company employs a senior executive in Georgia under a fixed-term contract that is approaching expiry. The company decides not to renew. No notice or severance is required for non-renewal of a fixed-term contract, provided the contract clearly states the end date and the parties did not tacitly continue the relationship beyond that date. If the executive continued working for even a few days after the stated end date without a new written agreement, Georgian courts have treated this as conversion to an open-ended contract, triggering the full termination regime.

To receive a checklist on redundancy procedure and documentation requirements for Georgia, send a request to info@vlo.com.

Georgian employment law prohibits discrimination on a range of grounds under Article 2(3) of the Labour Code, including race, colour, language, ethnic and national origin, nationality, religion, sex, age, disability, sexual orientation, political or other opinion, and social origin. The prohibition applies to all stages of the employment relationship, from recruitment through termination.

The anti-discrimination framework in Georgia is reinforced by the Law on Elimination of All Forms of Discrimination (ყველა ფორმის დისკრიმინაციის აღმოფხვრის შესახებ კანონი), which establishes the Public Defender (სახალხო დამცველი, Ombudsman) as the primary non-judicial body for handling discrimination complaints. The Public Defender can investigate, issue recommendations, and refer matters to court, but cannot impose binding sanctions directly. Judicial enforcement remains the primary mechanism for obtaining compensation.

The Labour Inspectorate is the administrative body responsible for monitoring compliance with the Labour Code. Its powers were significantly expanded by amendments in 2019 and subsequent years. The Inspectorate can conduct both scheduled and unscheduled inspections, issue binding orders to remedy violations, and impose administrative fines. Fines for labour law violations are modest by international standards but the reputational and operational disruption of an inspection can be significant for a small or medium-sized operation.

Common areas of Inspectorate scrutiny include:

• Absence of written employment contracts.
• Failure to maintain working time records.
• Non-payment or underpayment of overtime.
• Violations of occupational health and safety requirements.

Occupational health and safety (შრომის უსაფრთხოება) is governed by the Law on Occupational Safety (შრომის უსაფრთხოების შესახებ კანონი), which imposes specific obligations on employers in hazardous industries and general obligations on all employers. International companies sometimes treat Georgian safety requirements as less stringent than their home jurisdiction standards and fail to implement adequate documentation. This is a mistake - the Inspectorate treats safety violations seriously, and a workplace accident without proper documentation creates both administrative and civil liability.

Many international employers underappreciate the practical importance of maintaining an internal HR documentation system that mirrors Georgian legal requirements. Contracts, orders, warnings, acknowledgment signatures, and leave records must all be maintained in a form that can be produced to the Inspectorate or a court on short notice. Digital records are accepted, but they must be authenticated and stored in a manner that prevents unilateral alteration.

Employment disputes in Georgia are resolved primarily through the general civil courts. The City Court (საქალაქო სასამართლო) of Tbilisi or the relevant regional court has first-instance jurisdiction over employment claims. Appeals go to the Court of Appeals (სააპელაციო სასამართლო), and further cassation appeals lie to the Supreme Court of Georgia (საქართველოს უზენაესი სასამართლო).

The limitation period for filing an employment claim is one month from the date the employee became aware of the violation, for claims related to termination. For salary and other monetary claims, the general three-year limitation period under the Civil Code applies. This asymmetry is important: an employee who misses the one-month window for a wrongful dismissal claim may still pursue unpaid salary claims for up to three years.

Electronic filing is available through the court portal for certain procedural steps, but full electronic case management is not yet uniformly implemented across all Georgian courts. In practice, most employment litigation involves physical document submission, and parties should plan for procedural timelines accordingly.

Mediation is available as an alternative to litigation and is encouraged by the courts. The Georgian Mediation Centre (მედიაციის ეროვნული ცენტრი) and private mediators can facilitate settlement. Mediation is particularly effective in disputes where the employment relationship has already ended and the parties are negotiating a financial settlement, as it avoids the cost and delay of full litigation. However, mediation is voluntary, and either party can withdraw at any stage.

Court proceedings in first instance typically take between six and twelve months for straightforward employment cases. Complex cases involving multiple claims, expert evidence, or corporate restructuring issues can take longer. Legal fees for employment litigation start from the low thousands of USD or EUR for straightforward cases and increase with complexity. State duties are calculated as a percentage of the amount in dispute for monetary claims, and are at a relatively low level compared to Western European jurisdictions.

Enforcement of a Georgian court judgment against a Georgian employer is handled by the National Bureau of Enforcement (აღსრულების ეროვნული ბიურო). The Bureau has powers to attach bank accounts, seize assets, and impose travel restrictions on company directors. In practice, enforcement against solvent employers is relatively efficient. Enforcement against insolvent or asset-stripped entities is more complex and may require parallel insolvency proceedings.

For international employers, a practical consideration is whether a judgment obtained in Georgia can be enforced in the employer's home jurisdiction. Georgia is not a party to the major multilateral enforcement conventions applicable in the EU, so enforcement abroad depends on bilateral treaties or the domestic law of the target jurisdiction. We can help build a strategy for cross-border enforcement where the employer's assets are located outside Georgia.

What are the main financial risks for an employer who dismisses an employee without following the correct procedure in Georgia?

An unlawfully dismissed employee in Georgia can seek reinstatement and payment of all salary from the date of dismissal to the date of the court judgment. In cases that take 12 months or more to resolve, this can represent a year or more of full salary, plus the employee's legal costs if the court awards them. The employer also bears its own legal costs throughout the proceedings. In addition, if the dismissal is found to be discriminatory, the court may award additional compensation for non-material harm. The total exposure can easily reach several times the employee's annual salary, making procedural compliance a straightforward business decision.

How long does a redundancy process typically take in Georgia, and what are the minimum costs involved?

The minimum statutory timeline for a redundancy is 30 calendar days from the date of written notice to the date of termination. There is no mandatory consultation period or government approval requirement, so the process can be completed within that 30-day window if documentation is prepared in advance. The minimum mandatory cost is one month's salary as severance, plus payment for all accrued but unused annual leave. Legal fees for preparing the documentation and managing the process typically start from the low thousands of USD or EUR, depending on the number of employees and the complexity of the restructuring.

When should an employer consider settling an employment dispute rather than litigating to judgment in Georgia?

Settlement is worth considering seriously where the procedural record is incomplete - for example, where warnings were not properly documented or where the selection criteria for redundancy were not recorded in writing. In those circumstances, the risk of an adverse judgment is elevated, and the cost of settlement is likely to be lower than the cost of losing at trial. Settlement is also preferable where the employer values speed and confidentiality, since court proceedings are public and can take a year or more. A negotiated settlement through mediation or direct negotiation, documented in a written agreement approved by the court, provides finality and avoids the uncertainty of litigation.

Georgian employment law offers a relatively flexible framework for employers compared to most European jurisdictions, but it contains specific procedural requirements - particularly around termination, redundancy documentation, and leave compensation - that generate significant financial exposure when ignored. International businesses operating in Georgia benefit from investing in properly drafted contracts, consistent HR documentation, and legal advice at the point of restructuring rather than after a dispute has arisen. The cost of prevention is a fraction of the cost of contested litigation.

Our law firm Vetrov & Partners has experience supporting clients in Georgia on employment and labour law matters. We can assist with employment contract drafting, redundancy procedure design, Labour Inspectorate compliance, and representation in employment disputes before Georgian courts. To receive a consultation, contact: info@vlo.com.

To receive a checklist on employment dispute risk assessment and pre-litigation strategy for Georgia, send a request to info@vlo.com.