It curious that the European Union has Directives to cover many aspects of the employment relationship – but is silent about individual dismissal. If the EU was serious about the issue of employment protection why leave it up to individual member states to decide what minimum restrictions to apply to the ending of an employment relationship?
Perhaps the truth is that there is no need for such a Directive as most EU countries are already very successful in making it as unattractive as possible to hire anyone because of the costs involved if the employment relationship does not work out. Take the Netherlands, for instance, where no employer is allowed to make a dismissal decision unless the state or a court gives them prior permission to do so.
But it gets worse; far worse, the compensation per year of service in Spain remains so prohibitive that only the most desperate employer would consider creating a permanent job there. Then there is ineffable Italy where an employment minister was once assassinated because he tried to reform job reinstatement rules. Here recent reforms have removed the right to reinstatement – but only for new hires and in return employers face double the financial penalties for unfair dismissal… and “unfair” in Italy can be claimed for virtually any reason short of finding an employee’s hand in the till. In a bizarre throw back to paternalism it also remains impossible in Italy to sack a woman within twelve months of her marriage.
Last – but certainly not least – are the two countries where (in my view) an employer needs incredible courage to employ anyone.
France is one of my two favourite countries in the world, but it is also home to that certifiably deranged trades union the CGT. Not only does a dismissal in France require an employer to base it on an “exact, accurate and objective” cause, but must also establish that it is impossible to continue an employment relationship. Those employers unwise enough to try to justify their conduct before a labour court will then discover that such courts are heavily biased against them.
But I give the employment protection wooden spoon to Sweden. Here it is virtually impossible to dismiss an employee for “personal reasons” such as underperformance or bad conduct. If an employer tries to do so the employee will almost certainly apply for a hearing before the labour court – and whilst waiting that out come will have the right to remain at their post and receive their pay in full. This could mean having to face a disruptive and unproductive employee for up to three years. Furthermore, if the case is eventually kicked out by the court the employee does not have to repay the salary they received during this waiting period.
When governments impose such crazy conditions it is no surprise that economic growth in the European Union remains so sluggish, even with low interest rates and global demand picking up. Maybe what Europe needs is a new type of Directive – which imposes upper limits to employment rights as well as a safety net?