(World Bank, Washington, DC, 2002-12)
Employment protection - the set of rules
governing hiring and terminating employees - is a key
feature of any country's labor market. What types of
contracts will be permitted between employers and employees?
Under what conditions can the relationship be terminated?
What are the requirements for providing advance notice? What
are the obligations of the employer regarding severance or
termination payments? These are important questions for
policy-makers in addressing the trade-offs between labor
market flexibility and the economic security of employed
workers. A mix of cultural norms, collective bargaining, and
legislation determines employment protection practices in
any country. This primer note focuses on the statutory
regulations affecting employment protection. It provides a
basic overview of the policy options and a summary of what
is known about their impacts on workers and on the labor
market. It also addresses the institutional and political
aspects of employment protection.