--- title: "Startup HR Legal Advisory" url: "https://legal.ge/en/service/corporate-and-commercial-law-en/startup-hr-legal-advisory-en" field: "Corporate & Commercial Law" description: "Startup HR law: contract terms, remuneration and termination under Articles 12, 41, 47, 48. Legal.ge." reviewed: "2026-07-09" updated: "2026-10-15" publisher: "legal.ge" --- # Startup HR Legal Advisory > Source: legal.ge, https://legal.ge/en/service/corporate-and-commercial-law-en/startup-hr-legal-advisory-en ## The Form and Term of the Employment Contract in a Startup For a startup, the team is the main resource, and the legal frame of that resource is set by the Georgian Labour Code. Article 12 regulates the conclusion of the employment contract: it is concluded orally or in writing, for a fixed or indefinite term; where the employment relationship exceeds 1 month, written form is mandatory. A fixed-term contract may be concluded only where one of the grounds named by law exists — for example, the performance of work of a specific volume, seasonal work, a temporarily increased workload or the replacement of an employee temporarily absent. The law treats chains of fixed-term contracts strictly: if the term of the contract exceeds 30 months, or the relationship continued through two or more successive fixed-term contracts exceeding 30 months, it is deemed concluded for an indefinite term; succession also arises where a new contract is concluded within 60 days of the expiry of the previous one. For startups, the exception for a starting enterprise matters: an entrepreneur whose state registration took place less than 48 months ago is not subject to the restrictions on fixed-term contracts, provided the term is not less than 3 months; after the 48-month period expires, the relationship transforms into an indefinite one. The employer is also obliged to inform a fixed-term employee about existing vacancies, so that fixed-term staff have the same opportunity to take positions under indefinite contracts as other employees. ## Remuneration and Liability for Delay Article 41 sets the rules of remuneration: remuneration is the basic or minimum remuneration, salary or any other remuneration that the employee receives from the employer in return for the performance of work; its form and amount are determined by the contract, and it is paid at least once a month. For each day of delay of any payment or settlement, the employer must pay the employee 0.07 percent of the delayed amount — this rule tightens payment discipline and is an essential element of a startup's financial planning. ## Grounds and Procedure for Termination Article 47 lists the grounds of termination: economic, technological or organizational changes necessitating a reduction of the workforce; expiry of the term; completion of the work; the employee's departure by written notice; written agreement of the parties; lack of qualification; gross or repeated breach of obligations; death; commencement of liquidation; and other objective circumstances. Each ground requires its own evidentiary material, and a breach of an obligation imposed by the internal labour rules becomes a ground of termination only where those rules are part of the employment contract. For a startup this means that linking the rules to the contract and recording breaches in writing must happen in advance, not during the dispute. The practical lesson for a startup is this: before using a fixed-term contract, verify and document the existence of a ground; while the 48-month window of the starting enterprise lasts, use the flexibility but plan the transition to an indefinite contract; observe the remuneration schedule to the day, since delay accrues daily; and record every termination decision in writing and within the deadlines. These four rules are a direct translation of the Labour Code's requirements into startup language, and observing them reduces the risk of dispute many times over. Article 48 establishes the procedure: on leaving at the employee's initiative, the employer is warned in writing at least 30 calendar days in advance; the employee may, within 30 calendar days, demand written substantiation of the ground of termination, and the employer must respond within 7 calendar days. Appeal to the court is possible within 30 calendar days of receiving the substantiation; where the employer fails to substantiate, the burden of proof shifts to it. Where an unlawful termination is established, the court reinstates the person, secures equivalent work or awards compensation; the employee may also claim compensation for forced absence from the date of termination until the enforcement of the judgment. A procedural mistake thus costs the employer materially, and written fixation of every step is in the interest of both sides. ## Frequently Asked Questions ### When is a written contract mandatory? When the employment relationship exceeds 1 month — written form is then required. ### When does the law deem a contract indefinite? When a fixed term exceeds 30 months, or successive contracts exceed 30 months; a new contract within 60 days counts as succession. ### What exception applies to a starting enterprise? Within 48 months of registration, fixed-term contracts are unrestricted, provided the term is not less than 3 months. ### What is the penalty for delayed remuneration? Payment of 0.07 percent of the delayed amount for each day of delay. ### How to protect against unlawful dismissal? Demand substantiation within 30 days and apply to the court within the same period; without substantiation, the burden of proof shifts to the employer. ## How We Help on Legal.ge The lawyers of Legal.ge assist startups across the full spectrum of HR law: drafting contracts, sound schemes of options and bonuses, documenting termination procedures and representing parties in disputes. Contact us on Legal.ge — we will help keep your team legally protected and the terms of cooperation transparent and motivating for every member. ### When is a written employment contract required? For a relationship exceeding 1 month; a fixed-term contract requires a ground named by law. ### What happens beyond 30 months? The contract is deemed indefinite, including in cases of successive conclusion. ### Does a startup have an exception? Yes — within 48 months of registration fixed-term contracts are free, with a minimum term of 3 months. ### What does delayed payment cost the employer? 0.07 percent of the delayed amount for each day.