Electronic System of Employment Contracts (AM0055)

Brief Description of the Commitment
Through the introduction of a digital system for recording and concluding labor contracts in RA, to digitize labor contracts (individual legal acts on employment) signed in both the public and private sectors of RA, in order to improve the system of free choice of work and protection of labor rights. The electronic management system will enable employees to have employment contracts that meet the requirements set by RA legislation, and the Health and Labor Inspection Authority (hereinafter, the inspection authority) will have a more transparent, accountable, controllable and legal protection toolkit. In particular, as a result of the implementation of the system, employees will have the opportunity to familiarize themselves with the content of their employment contract, and in case of violation of the terms of the employment contract, refer to the specific point of the contract and submit a complaint to both the employer and the inspection body. On the other hand, the inspection body will have the opportunity to carry out effective control based on both monitoring and submitted complaints, identifying violations of labor legislation, including labor contract conditions, and improving workers' rights and protection. At the same time, based on the results of the analysis of the above problems, the inspection body will have the opportunity to more effectively evaluate and determine the employers with a high-risk level in order to include them in the annual inspection program. In addition, the presence of the platform will exclude the established practice in the private sector of concluding back-number contracts, not registering the actual work performed in the tax authority (illegal work), or specifying in the contract an amount less than the actual salary.

Problem Definition
1. What problem does the commitment aim to address? The commitment is aimed at increasing the level of free choice of work and protection of labor rights of RA employees, as well as risk management in the field of labor law. Employers, especially in the private sector, very often do not sign employment contracts (or do not adopt individual legal acts on employment) or individual legal acts on employment, job description/job passport (not applicable to the civil service system), or employment contracts with new employees. are not provided to employees, which subsequently makes it difficult, and sometimes even impossible, to protect the labor rights of employees and control over labor legislation. And already during the inspection, the labor contract is drawn up on paper, signed by the employee and presented as a previously signed document. It is also a related problem when the employee is accepted for such a job, in which case the initial and therefore the periodic medical examination is mandatory. Moreover, there are often cases when private sector employers specify the amount of salary in employment contracts at the minimum monthly salary provided by law, in order to avoid tax and other state payments stipulated by legislation, about which the employee often does not have any information due to not having the opportunity to familiarize himself with the contract. Another problem is when a person is hired to perform work required by the employer, corresponding to his profession, but due to not sign an employment contract or due to the fact that the contract was signed for another position (real estate unit) instead of the work actually performed, duties different from the work actually performed are stipulated in the contract. able to justify that he performed professional work, he does not receive both the supplements and other social guarantees provided for by the law. For example, a person actually carrying out professional work, which at the same time is provided by the legislation of the Republic of Armenia as particularly difficult, particularly harmful works, professions and positions in the list, is registered by the employer for another position (substance) in the relevant company, without paying the supplements provided for by law, for the specified works for not providing other guarantees, and later, the person who performed the mentioned work is deprived of the opportunity to calculate the professional work performed by him in the professional internship, as well as the allowances available to him and other social guarantees provided by the state. In the public sector, there are often cases when the employee is provided with the individual legal act on hiring, but the job description (passport of the position) is not provided with the order, as a result of which the civil servant carries out the instructions given by his direct supervisor, without having a clear idea of his main job duties. about The above-mentioned problems are especially common in marzes and small communities, but in the city of Yerevan, similar problems are regularly raised during inspections. Among the mainly affected groups, we can single out people who are socially insecure, who have a low level of legal awareness, who do not have the opportunity to be employed in other ways than the proposed conditions, and who occupy low positions (property units) in the public sector. The absence of a digital system for recording and signing employment contracts enables employers to show an unscrupulous approach to employees by not providing and distorting the terms of the employment contract, depriving employees of effective means of protecting their rights, and the inspection body of effective control tools. Effective inspection control in the field of labor law, of which the digital system of registering and concluding labor contracts will become an integral part and control tool, will create an opportunity to minimize similar cases mentioned above.

2. What are the causes of the problem? Employers sometimes consider the compulsory existence of an employment contract (individual legal act on employment) or its provision to employees as unimportant. In addition, even if an employment contract is signed (an individual legal act on hiring is adopted), the next issue is its content or the reflection of the minimum conditions defined by the RA labor legislation (for example, the year, month, date of starting work, the validity period of the employment contract, type of annual leave (minimum, additional, extended) and duration, pay, etc.). According to the current legislation, the employment contract (individual legal act on hiring) clearly stipulates the name of the position and (or) work functions or a reference to the document defining the functions arising from the position, the amount of the basic salary (including taxes paid from the salary, social or other mandatory payments defined by law ) and the way of determining it (hourly, daily, wage rate or monthly rate), supplements, bonuses, additional payments given to employees in the prescribed manner, working time regime (normal duration of working time or part-time working time or reduced duration of working time or total calculation of working time) and weekly duration (except for the sum calculation of working hours), etc., but in practice, employees are actually required to perform functions not provided for by the employment contract (individual legal act on employment) in an amount different from the amount of salary specified in the employment contract (individual legal act on employment), supplements, bonuses are not provided , allowances, durations of working time and rest time are not observed, etc. At the same time, the employment contract (individual legal act on employment) is sometimes not provided to employees for not registering their work activities with the tax authority (illegal work) or for registering less than the amount of wages actually provided, as well as for violating the terms of the contracts (individual legal act on employment). in order to refrain from complaints addressed by the employee to the employer or the inspection body. Moreover, employers often sign service contracts with employees instead of employment contracts in order to circumvent the basic principles and guarantees of labor legislation. These issues became more apparent during the pandemic (Covid-19) and war. One of the reasons for the mentioned problems is the lack of sufficient tools for the inspection body to carry out control with modern regulations.

Commitment Description
1. What has been done so far to solve the problem? As a result of the changes made within the framework of the inspection reforms, starting from September 2013, the authorized body exercising state control over labor legislation, according to the regulations in force until July 2020, was entrusted only with the control of relations related to the maintenance of health and safety of employees and persons under 18 years of age, as well as pregnant or control powers over the provision of labor law guarantees for breastfeeding women and child care workers. From July 1, 2021, the Health and Labor Inspection Authority has been given the authority to exercise full control over labor legislation. At the same time, until July 1, 2021 (before the entry into force of the above-mentioned legislative amendments), when a state of emergency was declared in the Republic of Armenia due to the coronavirus pandemic from March 2020, and then quarantine, amendments were made to the RA Labor Code and the Administrative in the RA Code on Offenses. Legal practice shows that very often the procedure for concluding labor contracts is violated by employers due to a lack of knowledge of labor legislation. The Health and Labor Inspection Authority continuously implements labor rights awareness activities, which, however, do not yield satisfactory results.

2. What solution are you proposing? In order to improve and increase the effectiveness of the tools of state control over labour legislation, it is proposed to introduce a digital system for recording and concluding labour contracts, which will help employers conclude labour contracts in accordance with the procedure established by legislation (adopting individual legal acts on hiring in accordance with the procedure prescribed by legislation), activities involving labour relations artificially not to be transferred to the civil law field, to register the work activity in the tax field in accordance with the legislation, in a simultaneous mode, the signed labour contracts (accepted individual legal acts on hiring) will be available at any time. The procedure for concluding employment contracts (adoption of individual legal acts on employment) by employers is often violated due to a lack of knowledge of labour legislation, and to solve the problem, it is planned to conclude employment contracts in the digital system (adoption of individual legal acts on employment) to implement individual employment agreements in labour contracts by filling in the relevant fields reflected in the system regarding the conditions to be included in the legal act defined by RA legislation. The introduction of a digital system for recording and concluding employment contracts itself implies the establishment of appropriate legal regulations by law. In particular, the law (Labour Code of the Republic of Armenia) will define the duty of employers to sign employment contracts or accept individual legal acts on employment through the system. For violating the mentioned duty, the law (the RA Code on Administrative Offenses) will provide for the application of an administrative penalty, as well as the authority to issue instructions (mandates) to the business entity (the RA Law "On the Organization and Conduct of Inspections in the Republic of Armenia"). Moreover, in case of non-fulfilment of the mentioned duty, the inspection body will be authorized to initiate administrative proceedings based on the complaints submitted by the employees, as well as on the cases revealed by it during the control or on the basis of the information received during the work activity, applying appropriate intervention measures against economic entities. The digital system (platform) for recording and concluding employment contracts will be implemented in the electronic management system of the RA State Revenue Committee https://file-online.taxservice.am, and for individuals/physical persons, the contract will be visible in the income declaration system, and the system can be integrated as https://file-online.taxservice.am, https://e-citizen.am/ platform, as well as be accessible to the electronic systems of other state bodies, in accordance with the competences and technical maturity of each. With this action, citizens can find their employment contract along with their passport, registration, driver's license, movable property, family status, civil registry, notary, educational and other data, as well as find out which bodies have made these inquiries about the data.

3. What results do we want to achieve by implementing this commitment? As a result of the implementation of the digital system for accounting and concluding labor contracts, the inspection body will have the opportunity to provide proper control with more optimal resources, the transparency of the labor market will be improved, the role of the human factor and the risk of corruption in the labor rights control process will be reduced, it will be possible to carry out state control without visiting economic entities, to highlight violations of labor rights. cases through monitoring (for example, if a person is employed in a profession (miner, construction worker, food industry worker, etc.) for which it is mandatory for the employer to provide preliminary and periodic medical examination, the system informs the inspection body about this, in respect of which control is established (availability of necessary documents, deadlines, etc.), to carry out effective state control on the basis of received applications/complaints regarding labor law violations. The system will contribute to the accountability of employer-employee relations and the improvement and modernization of the system of protection of workers' rights, through the system, the employee will receive his copy of the labor contract digitally, and the employer will not be able to change it or refuse to perform it during state control. Within the framework of the implementation of the digital system of concluding labor contracts and accounting, it is necessary to provide solutions for those cases when labor relations arise with an individual legal act on employment.

Commitment Analysis
1. How will the commitment promote transparency? Within the framework of the implementation of the digital system of concluding labor contracts and accounting, it is necessary to provide solutions for those cases when labor relations arise with an individual legal act on employment.On the one hand, as a result of providing access to the data related to each employee to the digital system of recording and concluding labor contracts, the opportunity and right to monitor their work activities and manage the necessary information will be ensured for employees, as well as the possibility of its realization, in particular, to submit an application-complaint to the employer or an inspection body. on the other hand, the transparency of the state control over the fulfillment of the requirements of the labor legislation will be ensured, in the way of reducing the human factor and corruption risks.

2. How will the commitment help foster accountability? As a result of the implementation of the digital system for accounting and concluding labor contracts, the relevant inspection body exercising control and other public agencies with access to the system will have clear data on the content of labor contracts (individual legal acts on hiring) signed in the labor market, the new toolkit in the field of control over the fulfillment of labor law requirements will contribute to accountability, including the provision of more detailed annual or quarterly reports by the authorized inspection body of the sector on detected violations and sanctions, while expanding the scope of information on labor rights, their possible violations, compensation opportunities and the application of sanctions, both substantive and result data growth, which it will be possible to make it a subject of public control at any time, which in turn will give an opportunity to evaluate the activities of the RA government in this field. At the same time, the possibility of providing access to the data related to the system for each employee will contribute to increasing the level of accountability of employee-employer relations.

3. How will the commitment improve citizen participation in defining, implementing, and monitoring solutions? Citizens will have the opportunity to report violations of labor rights and other issues by alerting the inspection body. Control by citizens will contribute to the regulation of labor relations (in particular, alerting about material violations, about the employer's failure to properly fulfill obligations) and increase the protection of social guarantees.

Commitment Planning (Milestones | Expected Outputs | Expected Completion Date)

Action 1. Implementation of legislative initiative | Elaboration of the draft Law of the Republic of Armenia "On making supplements to the Labor Code of the Republic of Armenia", circulation and submission thereof to the Government for approval as prescribed | 4 th quarter of 2022

Action 2. Establishment of a working group for the introduction of an electronic system (platform) for record-registration of employment contracts | Coordination of activities of introducing the electronic system (platform) for record-registration of employment contracts by the working group | 3rd quarter of 2024

Action 3. Creation and technical description of the digital system for recording and concluding labor contracts, organization of the purchase process and implementation of program works. | Development of a digital system based on the system of the State Revenue Committee, with proper provision of cyber risk measures, combining https://ecitizen.am/ and http://www.taxservice.am platforms | 3rd quarter of 2024

Action 4. Implementation of a digital system for recording and concluding labor contracts in the State system | Digitization of existing and newly signed employment contracts and individual legal acts on current and newly hired employment in the state system. | 4th quarter of 2024

Action 5. Introduction of a digital system for recording and concluding labor contracts in the non-state system | Digitization of current and newly signed employment contracts and individual legal acts on current and newly hired employment in the non-state system. | 4th quarter of 2024

Relation of the Commitment to strategic documents and other international processes Public Administration Reform Strategy The 2021-2026 Program of the Government of the Republic of Armenia: Subsection 4.6 "Labor and social protection" of the Section "Development of human capital" Armenia Digitalization Strategy for 2021-2025 OECD recommendation to improve access to information and public communication in the Republic of Armenia Sustainable Development Goal 1 No poverty: End poverty in all its forms and manifestations everywhere: targets 1.3 and 1.4 Sustainable Development Goal 8 Decent work and economic growth: Promote inclusive and sustainable economic growth, employment and decent work for all Sustainable Development Goal 16 Peace, justice and strong institutions: Promote building fair, peaceful and inclusive societies.

Action Plan Review

Commitment 10. Electronic system of employment contracts

● Verifiable: Yes

● Does it have an open government lens? No

● Potential for results: Modest