Remuneration of Persons Employed in Public Institutions on the Basis of Administrative and Labor Contracts

News | Good Governance | Pressing Issues | Analysis 15 September 2020

Employment in the public service in Georgia is regulated by the “Law of Georgia on Civil Service”, which entered into force in July 2017. According to the law, the categories of public servants are: a professional public servant / public servant, a person employed on the basis of an agreement under public law (administrative contract), a person employed on the basis of an employment agreement (labor contract).

 

A professional public servant is appointed in a public institution for an indefinite term, while a person employed under a labor contract performs temporary or non-permanent tasks, and the position of a person employed under an administrative contract consists of assisting a public political official in performing official duties, their term is directly linked to the official’s term.

 

According to the Law on Remuneration in public institutions, the maximum salary for a person employed under a labor contract is GEL 4,000 and the maximum salary for a person employed under an administrative contract is GEL 6,000, however, the law also provides for exceptions.

 

Unlike public servants, contract employment has a simpler screening process, and in many cases, their functions and responsibilities are vaguely described. Persons under an administrative contract are appointed on a non-competitive basis, while a simplified public job-posting is announced and the final hiring decision is made by an authorized person only on the basis of an interview. Therefore, the risks of nepotism and irrational management of budget funds are higher in this area. Indicators of similar risks are the ever-increasing rates of pay for contract employees. For example, according to the state budget execution reports, in 2019, GEL 242.2 million was spent on the remuneration of contract employees, which is about 100 million GEL more than in 2015. The report for the first quarter of 2020 is already available, according to which up to GEL 57 million has already been spent on salaries for contract employees in three months, which is 10 million (21%) more than the expenditure of the first quarter of last year. 

 

Expenditures on the remuneration of contract employees in the public sector are increasing by an average of 12% annually, which is about 3 times the rate of economic growth of the country.

 

Key Findings

 

- In 2019, GEL 242.2 million was spent on the remuneration of contract employees, which is approximately GEL 25 million more than in 2018, and GEL 100 million more than in 2015.

 

- In the first 6 months of 2020, up to GEL 125.9 million was spent on the remuneration of contract employees, which is 20.4 million (19%) more than in the first 6 months of the previous year.

 

- Most of the persons employed in ministries on the basis of administrative contracts are advisers to the Minister and their salary ranges from GEL 2,800 to GEL 6,000.

 

- In some cases, an employment contract is awarded for positions, which warrant an administrative contract under the legislation of Georgia. 

 

- In 2019, the number of labor contracts has increased by 18% in the 31 LEPLs studies. From 4,629 contracts signed in 2018, this number has already reached 5,452 in 2019.

 

- The subjects of the contracts and the names of the positions in the contract registries, kept by public institutions, are often vague and do not provide detailed information on the job description of the employees. 

 

- Salaries of employees contracted for vaguely defined positions may vary significantly. For example, the salary of a consultant or an expert in different agencies ranges from GEL 1,000 to GEL 4,000. 

 

- The National Center for Assessment and Examinations provides significantly higher salaries for contract employees compared to other agencies. For standard positions such as a worker/cleaner/gardener, the National Center provides GEL 1,200, while in other agencies the average salary for these positions is GEL 400. 

 

- As a result of the analysis of the work experience (CVs) of advisors, it can be argued that in certain cases this position is likely to be used to appoint Security Liaison Officers.

 

- 56 agencies out of 104 did not comply or only partially complied with the FOI request.

 

Conclusion

 

The findings of the research show, that despite the reforms carried out in the public sector in recent years, the existing practice of contract employment at public institutions remains a significant bureaucratic challenge. In particular, the ambiguity of the functions and duties of contract employees selected through a simplified screening process and the practice of providing significantly different pay for similar positions increases the risks of nepotism and mismanagement of public funds.

 

These risks are also significantly increased by the lack of transparency of the employers. The fact that a significant part of the research targets refused to disclose data raises suspicions that this may be an attempt to cover up the shortcomings of the existing employment policy.

 

The increasing public expenditures on remunerations for labor contract employees may be considered one of the side effects of deficient regulations existing in this field. This constitutes a significant bureaucratic burden for the state, which gains special significance in the post-pandemic period.

 

Based on the circumstances discussed in the study, IDFI calls on the Georgian authorities to:

 

- Review the existing contract employment practices to minimize the risks of nepotism, bias and corruption.

 

- Provide detailed duty descriptions for various vaguely defined positions (Advisors, Consultants, Experts).

 

- Develop a unified standard that ensures fair regulation of the remuneration of labor contract employees.

 

/public/upload/Analysis/Administrative-and-Labor-Contracts-in-Public-Institu.pdf 

 

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The study was prepared within the grant for Good Governance for Georgia (3G) project from the global philanthropic organization, Luminate. The Institute for Development of Freedom of Information (IDFI) is responsible for the content of this analysis. Views expressed in therein do not reflect the position of Luminate.

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