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ANNEX #1 Survey Results Brief Overview

1.1. Conclusion of the contract/Probationary period


1.1.1. Statement #1
Statement #1 - Labor contract shall be concluded in written form in case if labor relations continues for more than three months.

Figure #1 - The conclusion of an agreement in a written form and its possible impact on the company
Do not agree at all Do not agree Agree Completely agree Do not know 27.5% 0.1% 2.6% 10.6% 59.2%
87% 13%

Very nagative Nagative No effect Positive

1.7%
38%

10.0% 26.0% 44.6%


62%

Very positive 17.7%

Sample size N=251

The project is implemented in the framework of The East-West Management Institutes (EWMI) Policy, Advocacy, and Civil Society Development in Georgia (G-PAC) Program, funded by United States Agency for International Development (USAID). The study is made possible by the generous support of the American people through the USAID. The content is the responsibility of the PMC Research Center and do not necessarily reflects the view of USAID, the United States Government, or EWMI.

Annex 1 Survey Results Brief Overview PMC Research Center

1.1.2. Statement #2
Statement #2 - Employer has the right to conclude a fixed-term contract with employee only in certain circumstances. In particular when the work is related to: (1) performance of the work of particular volume; (2) seasonal work; (3) temporary increase of the volume of work (4) substitution of the employee, who is not working temporarily, on the bases of suspension of labour relations (5) due to other objective circumstances. In any other case the employer has no right to conclude fixed term labour contract.

Figure # 2 - Fixed term contract and the potential impact on the company
Do not agree at all Do not agree Agree Completely agree Do not know 7.2% 2.6% 2.5% 19.6% 68.1%
75% 22%

Very negative Negative No effect Positive Very positive

1.4% 16.8% 24.6% 52.5% 4.7%


57% 18%

Full combination of selective N=251

1.1.3. Statement #3
Statement #3 In case of collective agreement the employer has no right to conclude individual contract with the employee for the same position, with worse contract term than provided in collective agreement

Figure # 3 - Collective agreement and its possible impact on the company


Do not agree at all Do not agree Agree Completely agree Do not know 4.2% 30.7% 56.2%
64% 35%

Very negative Negative No effect Positive Very positive

2.6% 32.6% 26.5% 34.4%


38% 35%

8.0% 0.9%

3.9%

Annex 1 Survey Results Brief Overview PMC Research Center

Sample size N=251 1.1.4. Statement #4


Statement #4 In case of collective agreements employer, within the frame of companys material and financial capacity, is obliged to provide trade unions with conditions necessary for their operation (provide premises, equipment, communication means) at companys own expenses.

Figure # 4 - Collective agreement and its possible impact on the company


Do not agree at all Do not agree Agree Completely agree Do not know 7.2% 45.3% 40.7%
44% 53%

Very negative Negative No effect Positive Very positive

6.3% 41.5% 21.9% 26.5% 3.8%


30% 48%

3.7% 3.1%

Sample size N=251

1.1.5. Statement #5
Statement #5 - An employer shall reimburse the probation period. The amount of reimbursement shall be determined by agreement between employer and employee.

Figure # 5 - Probationary period and its possible impact on the company


Do not agree at all Do not agree Agree Completely agree Do not know 2.1% 17.0% 63.4%
79% 19%

Very negative Negative No effect Positive Very positive

1.2% 15.1% 25.6% 45.2% 12.9%


58% 16%

15.6% 1.9%

Sample size N=251


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Annex 1 Survey Results Brief Overview PMC Research Center

1.1.6. Expected impact of the initiated amendments, evaluation based on all statements Figure 6 expected impact of the initiated amendments on the company
Additional staff will be required Legal costs will increase Administrative costs will increase Nothing will change I dont know 13.1% 10.5% 9.1% 29.2% 47.8%

Sample size N=251 note: total responses are more than 100 %, because more than one answer was permitted

Figure #7 measures taken by the company in case of changes/problems


Will reduce office expenses Will reduce employee benefits Will reduce salaries Will reduce employees Will abolish the bonus system Will reduce the corporate event costs Will refrain from requiring new staff Will reduce marketing/PR costs Won't change anything Do not know 8.4% 16.7% 13.3% 15.5% 15.9% 25.0% 7.5% 18.0% 18.5% 15.8%

note: total responses are more than 100 %, because more than one answer was permitted

Annex 1 Survey Results Brief Overview PMC Research Center

1.2. Overtime Work 1.2.1. Statement #6


Statement 6 - Employees shall work for no more than 40 hours per week, excluding breaks and holidays. Working more than 40 hours is considered as overtime work.

Figure # 8 Definition of overtime definition and its potential impact on the company

Do not agree at all Do not agree Agree Completely agree Do not know

1.2% 20.4% 60.7%


76% 22%

Very negative Negative No effect Positive Very positive

2.7% 20.6% 26.6% 38.7% 11.4%


50% 23%

15.4% 2.3%

Samle size N=251 1.2.2. Statement #7


Statement #7 - An employer shall reimburse employee additional overtime work or provide him/her with an additional vacation time.

Figure #9-Compensation for overtime work and its potential impact on the company

Do not agree at all Do not agree Agree Completely agree Do not know

0.6% 15.4% 69.5% 13.8% 0.7%


83% 16%

Very negative Negative No effect Positive Very positive

1.4% 18.3% 22.8% 47.1% 10.4%


57% 20%

Sample size N=251

Annex 1 Survey Results Brief Overview PMC Research Center

1.2.3. Statement #8
Statement #8 - In case of employee dismissal, if s/he has unused vacation, an employer shall compensate it at his own expanses, proportionally to labour relations.

Figure # 10 Compensation for unused vacation and its potential impact on the company

Do not agree at all Do not agree Agree Completely agree Do not know

3.9% 19.5% 65.7%


74% 23%

Very negative Negative No effect Positive Very positive

2.3%
24%

22.0% 20.5% 48.2%


55%

8.3% 2.6%

7.0%

Sample size N=251


1.2.4. Expected impact of initiated amendments taken into consideration all statements

Figure # 11 The expected impact of initiated amendments on the company

Salary expenses will increase Legal expenses will increase Administrative expenses will increase Nothing will change The number of staff will increase Some expanses will be balance Refused to answer Do not know

31.6% 5.6% 12.4% 52.9% 0.1% 0.1% 0.7% 6.1%

Samle size N=251 note: total responses are more than 100 %, because more than one answer was permitted

Annex 1 Survey Results Brief Overview PMC Research Center

Figure # 12 - measures taken by the company in case of changes/problems

Will reduce office expenses Will reduce employee benefits Will reduce salaries Will reduce employees Will abolish the bonus system Will reduce the corporate event costs Will refrain from requiring new staff Will reduce marketing/PR costs Will do nothing Will stop activities Do not know 0.5% 6.8%

15.5% 26.6% 14.4% 20.2% 24.1% 25.0% 18.1% 15.8% 14.4%

note: total responses are more than 100 %, because more than one answer was permitted

Annex 1 Survey Results Brief Overview PMC Research Center

1.3. Employment contract suspension/termination 1.3.1. Statement #9


Statement #9 an employer shall not dismiss an employee but suspend the labour relationships if an employee is temporarily unable to work, for not longer than 40 calendar days consecutively and 60 calendar days in total, during 6 months

Figure # 13 Termination of employee contract in case of temporary incapacity and its possible impact on the company

Do not agree at all Do not agree Agree Completely agree Do not know

1.2%
29%

Very negative 27.4% 61.3%


71%

2.7% 28.7% 23.4% 38.8% 6.4%


45% 31%

Negative No effect Positive Very positive

9.4% 0.7%

Sample size N=251 1.3.2. Statement #10


Statement #10 The employer can terminate labour contract with an employee only in case of flagrant violation, however if there is no flagrant violation and the employee violated any of obligations, in order to dismiss the employee, the employer should already have used any disciplinary measure against him/her (for example warning) The employer shall not dismiss the employee for ordinary violation, if warning is not used at least once.

Annex 1 Survey Results Brief Overview PMC Research Center

Figure # 14 Termination of employee contract in case of flagrant violation and its possible impact on the company

Do not agree at all

2.0%
16%

Very negative Negative No effect

1.7% 17.1% 28.6% 45.5%


53% 19%

Do not agree

13.9%

Agree

71.6%
84%

Positive Very positive

Completely agree

12.6%

7.1%

Sample size N=251 1.3.3. Statement #11


Statement # 11 The employee has right to request for written justification of his/her dismissal, which should be issued by the employer within 7 calendar days upon submission of the request. The employee has right to appeal the decision on termination of labour contract at the Court, within 30 calendar days upon the receipt of written justification

Figure # 15 Employees right to appeal against his dismissal in court and its possible impact on the company
Do not agree Do not agree Agree Completely agree Do not know 6.9% 0.2% 4.5% 19.7% 68.7%
76% 24%

Very negative Negative No effect Positive Very positive

4.1%
29%

24.9% 28.3% 39.2%


43%

3.5%

Sample size N=251

Annex 1 Survey Results Brief Overview PMC Research Center

1.3.4. Expected impacts of changes taking into consideration all statements Figure # 16 expected impacts of changes on the company
Additional staff would be required Legal costs would increase Administrative costs would increse Nothing would change Company costs would increase Resufesd to answer I do not know

17.5% 16.9% 10.8% 55.0% 0.1% 0.7% 8.1%

Sample size N=251 note: total responses are more than 100 %, because more than one answer was permitted

Figure # 17 measures taken by the company in case of changes/problems


We would reduce office expenses We would reduce employee benefits We would reduce salaries We would reduce employees We would abolish the bonus system We would reduce the corporate event costs We would refrain from requiring new staff We would reduce markeing/PR costs We would do nothing We would accomplish all of the above Refused to answer Do not know 0.4% 2.1% 20.1% 9.4% 8.8% 8.4% 11.6% 17.3% 24.7% 23.6% 17.9% 17.4%

note: total responses are more than 100 %, because more than one answer was permitted

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Annex 1 Survey Results Brief Overview PMC Research Center

1.4. Mass dismissal 1.4.1. Statement #12


Statement #12 In case if the employer wants to implement collective dismissal (dismiss at least 50 employees within 15 calendar days) s/he shall notify the ministry in written form. The term for notification depends on number of employees in the organization and ranges between 15-30 days. If the management of the company with 100 500 employees wants to dismiss 50-100 employees, the Ministry shall be notified 15-30 days prior.

Figure # 18 mass dismissal and its possible impact on the company


Do not agree at all Do not agree Agree Completely agree Do not know 13.5% 35.6% 44.7% 4.4% 1.8%
49% 49%

Very negative Negative No effect Positive Very positive

13.0%
44%

31.3% 22.5% 29.9%


33%

3.3%

Sample size N=251

Figure # 19 Business leaders attitude to increasing the role of State in employee-employer relations

Very negative Negative Neutral Positive Very positive Refused to answer Do not know 0.5% 0.7%

8.2% 29.2% 22.6% 32.1% 33% 37%

6.6%

Sample size N=251

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Annex 1 Survey Results Brief Overview PMC Research Center

1.5. Dismissal 1.5.1. Statement #13


Statement #13 - After termination of labour relations, the use of experience obtained during employment period by the employee for benefit of competitor employer is prohibited by the Law.

Figure # 20 Dismissal and its possible impact on the company


Do not agree at all 7.0%
35%

Very negative Negative No effect

6.9%
36%

Do not agree

27.8%

29.0% 25.6% 33.5%


39%

Agree

58.0%
66%

Positive Very positive

Completely agree

7.2%

5.1%

Sample size N=251 Figure # 21 - The expected impact of changes on the company
The risk of flowing the information would increase Internal procedures would complicate It would not be dangerous for the company Terms,how long it is forbidden to use the knowledge for the other companies,would be set Do not know 0.7% 1.6% 8.6% 59.6% 36.0%

Sample size N=251 note: total responses are more than 100 %, because more than one answer was permitted

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Annex 1 Survey Results Brief Overview PMC Research Center

Figure # 22 - measures taken by the company in case of changes/problems

Will refrain from firing employees We would refrain from requiring new staff We would limit accessibility of the internal information No additional activity We would esteblish financial penalties during certain period We would add the obligation of confidentiality in the employee contract We would appeal to the court Do not know

20.3% 6.1% 65.2% 8.1% 0.3% 0.3% 0.5% 13.3%

note: total responses are more than 100 %, because more than one answer was permitted

1.6. Collective dispute 1.6.1. Statement #14


Statement #14 In case of collective dispute one party has right to apply to the Ministry for its involvement as a mediator, for purpose of facilitating parties in reaching agreement.

Figure # 23 Collective dispute and its possible impact on the company


Absolutely do not agree Do not agree Agree Absolutely agree Do not know 11.8% 40.0% 42.5%
47% 52%

Very negative Negative No effect Positive Very positive

10.9% 36.8% 19.4% 30.0%


33% 48%

4.9% 0.8%

2.9%

Sample size N=251

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Annex 1 Survey Results Brief Overview PMC Research Center

1.6.2. Statement #15


Statement #15 The Ministry has right to get involved in collective dispute as mediator at own initiative, without the parties request, in order to support the parties in reaching agreement.

Figure # 24 Government interference in collective disputes and its possible impact on the company
Absolutely do not agree Do not agree Agree Absolutely agree Do not know 19.6% 52.8% 24.1% 1.2% 2.3%
25% 72%

Very negative Negative No effect Positive Very positive

19.2% 44.2% 18.5% 17.0%


18% 63%

1.1%

Sample size N=251 1.6.3. All the possible impact of changes in total provisions Figure # 25 - The possible impact of changes on the company
The probability of corruption would increase Manufacturing process would interrupt Business environment would deteriorate Business environment would improve Employee rigths would be more protected nothing would change Excessive bureaucracy Changes would positively reflect on both sides Refused to answer Do not know

29.6% 18.5% 35.9% 5.2% 20.6% 5.6% 0.1% 0.7% 0.7% 7.4%

Sample size N=251 note: total responses are more than 100 %, because more than one answer was permitted
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Annex 1 Survey Results Brief Overview PMC Research Center

1.7. Strike/Lockout 1.7.1. Statement #16


Statement #16 The employees or employers have right for strike or lockout only after 21 days upon notifying the Ministry in written. Conciliation procedures will be conducted within these 21 days, in which the mediator nominated by the minister can also participate.

Figure # 26 The right of strike/lockout and its possible impact on the company
Absolutely do not agree Do not agree Agree Absolutely agree Do not know 11.4% 41.0% 42.6% 3.7% 1.3%
46% 52%

Very negative Negative No effect Positive very positive

12.5% 37.0% 18.1% 29.3% 3.1%


50%

32%

Sample size N=251

1.7.2. Statement #17


Statement #17 Before starting strike or lockout the parties shall not later than 3 days prior to strike or lockout notify the Minister in written form regarding place and nature of strike or lockout

Figure #27 The right of strike/lockout


Absolutely agree Do not agree Agree Absolutely agree Do not know 13.80% 36.50% 43.70% 3.50% 2.50%
47% 50%

Very negative Negative No effect Positive Very positive

12.40% 35.00% 21.40% 28.80% 2.40%


47%

31%

Sample size N=251

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Annex 1 Survey Results Brief Overview PMC Research Center

1.7.3. All the possible impact of changes in total provisions

Figure #28 Position about increasing the role of the government in the same relations
Very negative 11.9%

44%
Negative 32.5%

Neutral

20.4%

Positive

29.3%

31%
Very positive 1.5%

Do not know

4.4%

Sample size N=251

1.8. General assessment Figure # 29 expected impact on the business environment and creating new jobs

Very negative Negative No effect Positive Very positive Do not know

7.5% 25.6% 12.5% 32.7% 2.6% 19.1%


35% 33%

9.9% 21.2% 19.6% 3.3% 3.3% 21.0%


28% 31%

Sample size N=251

Annex 1
Research Methodology 16

Annex 1 Survey Results Brief Overview PMC Research Center

Quantitative research was conducted using face to face interviews. 251 managers of business organizations were interviewed (See Table 1: Description of Research Methodology). Note: Data were weighted according to enterprise size. Table1 Description Research Methodology Research method Research technique Target sample Research area Sample size Sampling method Sampling error Average length of interview Period of Research Quantitative research Face to face interview Managers of small, medium and large-sized enterprises Tbilisi 250 enterprises Quota sampling 6-7% 20 minutes April 2013

Overall, 1339 enterprises were contacted by telephone. 315 of them agreed to be interviewed. Face to face interview was conducted with 251 organizations. Enterprises were grouped in a following way: (See Table 2: Group of enterprises) Table 2Research Methodology Non-Financial Small-sized enterprise 97 Medium-sized enterprise 72 Large-sized enterprise 73 Total 242

Financial 3 3 3 9

Interviews were conducted mainly with Executive/Managing Directors (73%), relatively small number of respondents were Financial and Operational Directors (11%-11%). Presidents, Deputy Directors and HR Directors were also interviewed (4%). 83% and 13% of participating organizations are limited liability companies and individual entrepreneurs relatively. Only a small number of joint stock companies and general partnerships were interviewed (4%). More than half of enterprises interviewed by telephone are service providers (54%), every third of the respondent companies operates in commerce sector (29%), only a small number of manufacturing and construction companies participated in survey (7-8%). Interviews were conducted with financial organizations in compliance with quota sampling methodology.

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