The problem of bonuses in the public sector has been in the news for years, with frequent cases of various public officials receiving disproportionately high bonuses, causing considerable public dissatisfaction. Transparency International Georgia has repeatedly written about this problem. Everybody seemed to agree about the necessity to create common standards for issuing bonuses.

The first step in this direction was the government’s decision to adopt a resolution On Approval of Rules for Determining the Amount of Bonuses in Public Institutions on July 15, according to which, bonuses can only be issued once per quarter and should not exceed a monthly remuneration of a recipient person employed at a public institution. The basis for granting a bonus can be thorough and exemplary performance of duties, long and honest service, and/or completing of a particularly complex or important task. A decision to issue a bonus stands with an appropriate higher official. 

The government’s resolution only covers ministries, offices of state ministers, government administration, governors, legal entities of public law and services under the government’s supervision.

Initiated Legal Changes

On July 19, a few days after the resolution was adopted, parliamentary faction Georgian Dream – Republicans registered a package of legislative amendments related to new regulations on issuing bonuses. The initiative consisted of three draft laws with proposed amendments to Parliamentary Regulations as well as to the Law on Public Service and the Law on Status of a Member of Georgian Parliament. The Parliament has yet to start consideration of this legislative proposal. It will be interesting to find out exactly what new regulations are being proposed.

A List of High Officials

Unlike the government resolution, the draft law proposes a list of civil servants, who will be prohibited from receiving any bonuses. These are:

State-political officials, in particular:

• President of Georgia
• Member of Parliament
• Prime Minister and other members of government
• Members of highest representative bodies of Abkhazia and Adjara
• Heads of Autonomous Republic governments
• Members of Autonomous Republic governments
• Members of local government representative bodies (council members)
• Mayors of self governing cities
• Municipality governors

Also officials elected, appointed or approved in accordance with constitutions of Georgia and its Autonomous Republics, for example:

• Chairman of the Supreme Court
• General Auditor of the State Audit Office
• Board Members of the National Bank
• And more

In other words, all civil service high officials are imperatively prohibited from receiving bonuses.

Basis, Frequency and Amount of Issued Bonuses

Head of a government institution has the right to issue bonuses to any civil servant other than those listed above. The basis for issuing a bonus is slightly different from the government resolution of July 15:

• Overtime work
• Outstanding performance
• Being in charge of particularly important responsibilities
• Completion of a large volume of work during non-working hours
• Long and honest service
• Completion of a particularly complex assignment

Bonuses can be issued if one or more of the above criteria are met. Head of an institution can issue a bonus to a specific employee once per quarter, based on proper justification provided by the person’s nominator. The amount of an issued bonus must not exceed double the amount of an employee’s monthly salary.   

As we can see, legal amendments proposed by Georgian Dream – Republicans prohibit issuing of bonuses to state-political officials, even in cases when they complete a particularly difficult task or put in extra work hours. These officials often receive salary supplements, which appears to be the authors of the draft law decided not to grant them the right to receive bonuses.      

The main novelty the draft law introduces is imposing restrictions on civil servants employed in the local government. This change should be considered as a step forward, since no such restrictions have ever been in place, resulting in cases of inappropriate use of the right to issue bonuses. It should be noted that the draft law allows for an upper limit of double the amount of an employee’s monthly salary, while the government's resolution settles on an amount equal to only one month’s salary. Considering the fact that bonuses will only be given to medium or low-ranking civil servants, having an upper limit of double the employee’s monthly salary can be considered a reasonable amount.

Our Overall Assessment

Regulation of bonuses is a definitely a welcome step. For the most part it was the existing legal vacuum that distorted the essence of bonuses and contributed to malpractice. However, in our opinion, the changes outlined above should be followed by an increase of salaries across the board, since not doing so will reduce the competitiveness of civil service and may lead to outflow of qualified personnel.

We also believe that regulations and restrictions related to bonuses must be extended to enterprises founded with 100% state ownership. Neither the proposed legal amendments nor the government’s resolution currently apply to such enterprises, which creates a possibility that these institutions could abuse the existing lack of regulation.

We hope that regulations related to bonuses will be improved further in the context of a larger reform of civil service.