The Power to Dismiss

Abstract

This book analyses the historical development of job security regulations in Western Europe from the establishment of freedom of contract in the nineteenth century until the heyday of two-tier labour market reforms in the 2000s. Job security regulations restrict managerial capacity to dismiss employees or use new forms of employment (e.g. temporary work) when hiring new workers. The book makes four main contributions: First, it shows that trade unions are the main driving force behind the extension of job security regulations because these regulations protect the union organization in the workplace and award them an important role in company decision-making. Second, it demonstrates that the extension of dismissal protection was only possible in periods in which the power resources of the labour movement temporarily exceeded those of employers, such as in the immediate aftermath of World Wars 1 and 2 as well as in the late 1960s and early 1970s, when a ‘red wave’ swept over Western Europe. Third, it shows that the trade unions’ desire to maintain institutional control caused them to push for the regulation of job security by means of collective agreements. In the medium term, this preference had the paradoxical effect that countries with strong labour movements featured lower levels of statutory dismissal protection than countries with weak and fragmented labour movements. Finally, it demonstrates that the trade unions’ interest in dismissal protection prompted them to assent to two-tier labour market reforms from the 1980s onwards, thereby contributing to the dualization of Western European labour markets.

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