Employment Contract - The Clauses You Will Be Arguing About Later
Nobody cares about the employment contract on the day it is signed, and everybody does on the day it ends. That is when it turns out the "3-year non-compete" carried no compensation, the bonus was "at the employer's discretion", the place of work was "the territory of Georgia" and the salary was "as agreed". The Code voids many such clauses, but voidness has to be proved in court; it is cheaper to check before signing.
This page looks at the contract from both sides. For the employee: which clauses protect you, which restrict you and which contradict the Code. For the employer: how to write a contract that actually works, with a non-compete that will not be struck down, a training-cost clause that will be enforced, and a change of terms that does not turn into a lawsuit.
Updated · Practice area: Employment lawyer
Contract Clauses That Are Often Void - and What Should Be Written Instead
The Code is a minimum standard: a clause that puts the employee in a worse position than the Code is void, while the rest of the contract stays in force.
Reviewing a Contract Before Signing or Before a Dispute - Five Questions
The nature of the relationship
Employment or services, full-time or part-time, fixed-term or indefinite, with or without probation. This determines which protection applies, and the title frequently does not match the content. The lawyer assesses the content, not the title.
Completeness of the essential terms
Start date and duration, working time and rest, place of work, position and duties, pay and how it is paid, the overtime rule, leave, the termination procedure. Vagueness in any of them is the subject of a future dispute.
Checking the restrictive clauses
Non-compete, exclusivity, confidentiality, intellectual property, training costs, penalties. The lawyer measures each against the Code and case law and identifies clauses that are void for the employee or unenforceable for the employer.
Checking annexes and internal rules
The contract often "refers to" internal rules, a bonus policy, a job description; they become part of the contract only when the employee has been given them in writing. A document never provided does not bind the employee.
Negotiation and amendment
Before signing: proposed changes to the clauses in writing; after signing: a supplementary agreement. A change does not happen by unilateral order, and the employee's refusal to accept a change is not a ground for dismissal.
A "Service Contract" That Is Really Employment - What That Changes
Part of the business community engages staff under "service contracts" or as individual entrepreneurs: without leave, compensation, dismissal protection and often without the tax burden. The Code addresses this scheme directly: the relationship is classified by its actual circumstances, not by the document's title.
The signs of employment: the work is performed on the employer's instructions and under its control, at set hours and at a set place, with the employer's equipment, for a single client, for regular fixed pay, integrated into the organisational structure (a line manager, a job title, an email on the company domain). The more of these signs exist, the less it matters what the contract was called.
The effect of reclassification is retroactive: leave compensation for the entire period, dismissal protection and compensation, overtime, protected statuses. For the employer, tax consequences are added. The lawyer helps the employee with a reclassification claim, and helps the employer document the relationship in the form that matches reality, before the inspectorate or the court does it instead.
Restrictive Clauses - Where the Line Runs Between Lawful and Void
- Non-compete during employment
- A ban on working for a competitor or competing activity during the employment is generally lawful; it is part of the duty of loyalty. The exception: a total ban on other, non-competing activity.
- Non-compete after termination
- A reasonable period (in practice 6-12 months), a specific territory and activity, and compensation for the restricted period; without it the court often will not enforce the ban. A penalty for breach must be proportionate.
- Confidentiality
- Protection of trade secrets continues after termination, even without a time limit, but only for what is genuinely secret and was marked as such. "All information is confidential" will not protect a public client list; a client database, pricing policy or technology, yes.
- Poaching clients and staff
- A post-termination ban on soliciting clients and colleagues, narrow, time-limited and specific, is enforced far more often than a general non-compete. The lawyer recommends exactly this form to employers instead of a blanket ban.
- Intellectual property
- Economic rights in work created within the scope of the job belong to the employer unless the contract says otherwise; work created outside the job with the employee's own resources belongs to the employee. Defining the boundary in the contract protects both.
Template Audit - What the Lawyer Checks in a Company's Documents
- Every essential term with a specific amount and date, with no "as agreed" or "at the employer's discretion" wording.
- Probation, the ground for a fixed term and the overtime rate in writing: the three clauses whose absence most often costs employers the case.
- Internal rules, bonus policy and job description: a signed acknowledgement sheet for every employee.
- A non-compete with a period, territory, compensation and proportionate penalty, or its replacement with a narrow non-solicitation clause.
- Training-cost repayment with a proportionate formula and only on termination at the employee's initiative.
- A change procedure: a supplementary agreement form, not an order, and a termination procedure that matches the Code.
Three Contract Disputes
A 2-year non-compete without compensation
An IT specialist decided to move to a competitor; the former employer demanded a 20,000 lari penalty. Lawyer: a ban covering the whole sector, the whole country, for 2 years and without compensation is disproportionate; no disclosure of secrets was proved. The penalty claim was dismissed.
An "entrepreneur" who sat in the office for 4 years
An accountant on a service contract for 4 years, 9 to 6, on the company's computer, under a manager's instructions. "The contract was not renewed." Lawyer: a reclassification claim, unlawful dismissal, leave compensation for 4 years, forced-absence pay. Settlement at 80% of the full claim.
Employer: a salary cut in a crisis
A company needed to reduce salaries by 20%. Lawyer: instead of an order, a written offer to each employee, a temporary supplementary agreement with a term and a restoration condition, and as the alternative the economic-ground termination procedure for those who refused. 31 of 34 employees signed; no claim was filed.
Questions About Employment Contracts
I was not given a copy of the contract, I only signed it. What do I do?
The employer must hand one copy of the contract to the employee. Request a copy in writing, by email, so the request is recorded. A refusal is a matter for the inspectorate and, in a dispute, counts against the employer: terms it cannot produce are proved by your version.
I was made to sign a supplementary agreement reducing my salary. Can I challenge it?
A mutual written agreement is, in principle, valid. Voidness is proved if the signature was obtained by pressure, deception or a "sign or you are fired" threat; messages and witnesses are decisive. The lawyer advises not signing such a document on the spot and requesting time to consider, in writing.
An English-language contract with a foreign company: does the Georgian Code apply?
If the work is performed in Georgia, the mandatory rules of the Code (deadlines, compensation, dismissal grounds) apply regardless of a foreign-law clause. The contract must also be available in Georgian; where the language versions differ, the lawyer checks which version says what.
I am an employer. Does a non-compete work at all in Georgia?
It works if written correctly: a narrow activity, a specific territory, 6-12 months, compensation for the restricted period, a proportionate penalty. A general, uncompensated ban is struck down in court. In practice a combination of confidentiality and non-solicitation clauses is more effective.
Probation was 3 months and has now been "extended" by another 3. Is that lawful?
Probation is set only once, for no more than 6 months in total, and only in writing. If 3 months were agreed originally, an "extension" is a new agreement that needs your consent and cannot exceed 6 months in total. A verbal extension does not exist; after the period expires, ordinary protection applies.
Lawyers for Employment Contract Matters
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