The Kutaisi Municipal Pre-School Union (NPLE - Non-Profit Legal Entity) recently underwent a staff reorganization that was flawed on both legal and structural levels. The reorganization, carried out in beginning of the 2015 academic year, had problems with transparency and substantiation.

Reorganization Process

On July 1, 2015, the directors of 35 union kindergartens were informed about a possible reorganization and staff reduction by the head of NPLE Kutaisi Municipal Pre-School Union. According to Kutaisi local government, changes made in its NPLEs were necessary and inevitable. Kindergarten directors, however, suspect political motivations behind the reorganization.

Soon after receiving the warning kindergarten directors held a press conference stating that the local government had offered them to voluntarily request examination and consent to resignation in case of failing to overcome its threshold. The directors turned down the offer and requested the examination be postponed by a year. The request was rejected. Kutaisi City Hall denies either offer.

After the press conference, on August 6, 2015, the head of Kutaisi Pre-School Union initiated a staff reorganization and ordered the termination of employment contracts with all kindergarten directors, effectively abolishing this staff position. Only 3 directors were not dismissed in this process due to maternity leave.

After the dismissal, on August 19, 2015, kindergarten directors requested a written substantiation of the union’s decision. On August 21, 2015, the head of the union issued a written response accompanied by the August 3, 2015 Order #38 of the director of NPLE Kutaisi Municipal Pre-School Union defining the functions of a new staff position - union director representative. It should be noted that the new statute of the union does not mention the position of a ‘union director representative’. According to the order, the union director of the union is authorized, in agreement with the city mayor, to have a representative in a union branch (kindergarten), with whom the director signs a fixed-term employment contract. The functions of this representative are almost identical to those of the kindergarten director – a position abolished through the staff reorganization.

Consultations regarding the staff reorganization and the planned examination resulted in 10 day temporary employment contracts for the former kindergarten directors signed on September 1, 2015. The contracts stated that the pre-school union would take into account the examination results when deciding whether to extend the new employment contracts (Article 2.3).

24 former kindergarten directors took part in the examination, of which 15 passed the threshold. The pre-school union signed a one-year employment contract with each of them (previously they had open-ended employment contracts). One year contracts were also signed with 17 other examination participants who had received high scores.

Identified Problems

• The staff reorganization did not result in a reduction of total staff, since the abolished position (kindergarten director) was replaced by a position with identical functions. The order dismissing kindergarten directors explicitly stated that the reorganization was started in order to reduce staff positions. Ultimately, however, the reorganization did not result in the reduction of staff positions, since all vacant positions were immediately refilled.
• The functions of the position of a kindergarten director abolished during the reorganization are identical with those of the newly created position of a union director representative. This naturally raises a suspicion that these changes were not made for the purpose of improving the system. If there is a need for having a position of a kindergarten director, then a simple change of name is not necessary and cannot serve as the reason for reducing staff positions.
• The employer has a clear obligation to substantiate the need for staff reorganization. According to the Labor Code, the employer is obligated to provide explanation regarding the socio-economic circumstances that made reorganization necessary. This has not happened in the case of the pre-school union.
• The examination participants requested the involvement of National Examination Center in the staff selection-examination process. The local government turned down the request.
• Those kindergarten directors, who successfully passed the examination and held open-ended employment contract before the reorganization, were offered  1-year employment contracts, which can be considered a deterioration of working conditions. The pre-school reunion will not be required to offer any explanation for dismissing these employees after their contracts expire.

The position of Transparency International Georgia

• Kutaisi local government needs to uphold a high standard of substantiating decisions regarding general staff reorganizations as well as individual dismissal cases.
• Staff reorganizations need to be characterized with changes that are structural and substantial and not simply formal in nature.
• Candidate examination during staff reorganization needs to actively involve an independent and impartial party. This will increase public trust and ensure an impartial outcome.

We hope that future staff reorganizations in local government NPLEs will be carried out in accordance with the law, based on the principles of fairness, objectivity and healthy competition.