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Verkerke, J.H. --- "Discharge" [2009] ELECD 418; in Dau-Schmidt, G. Kenneth; Harris, D. Seth; Lobel, Orly (eds), "Labor and Employment Law and Economics" (Edward Elgar Publishing, 2009)

Book Title: Labor and Employment Law and Economics

Editor(s): Dau-Schmidt, G. Kenneth; Harris, D. Seth; Lobel, Orly

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847207296

Section: Chapter 16

Section Title: Discharge

Author(s): Verkerke, J.H.

Number of pages: 33

Extract:

16 Discharge
J.H. Verkerke


1 Introduction
Discharge occurs when a firm initiates an involuntary termination of the
employment relationship. This chapter focuses on economic analysis of the
legal rules that govern these terminations.
We begin with the legal framework. While US law principally restricts
individual discharges, in other parts of the world redundancy statutes also
impose significant constraints on large-scale reductions in force. Scholars
often use the term `employment protection law' (EPL) or, less accurately,
`employment protection legislation' (also EPL) to refer collectively to any
limitation on termination. It will be helpful, however, to define more care-
fully the various types of `employment protection' with which we will be
concerned.
A series of dichotomous distinctions clarifies both the source of this pro-
tection and the circumstances under which it will bind. First, we should dis-
tinguish between legally enforceable constraints and those that arise instead
from industry or workplace norms. For many workers, the self-enforcing
norms that govern internal labor markets provide more practically signifi-
cant job protection than any of the myriad legal grounds for challenging
a discharge (Rock and Wachter 1996; Wachter 2004). Second, we need to
distinguish individual from collective employment rights. Countries vary
widely in the relative importance of unions and collective bargaining, but
even in the US, a country notoriously inhospitable to collective represen-
tation, significant segments of the workforce look principally to collective
agreements for employment protection. Third, we must consider the dis-
tinction between statute and common law. Legislation provides ...