The Effect of Traditional and Modern Policies on Termination of Employment Contract

• Author: Omed A. Ismail
• Position: PhD Candidate, University of Debrecen, Marton Géza Doctoral School of Legal Studies.
• Pages: 34-52

LESIJ NO. XXVI, VOL. 2/2019

THE EFFECT OF TRADITIONAL AND MODERN POLICIES O N

TERMINATION OF EMPLOYMENT CONTRACT

∗

Omed A . ISMAIL

∗∗

Abstract

This paper is looking for the best model of articulating termination rules of employment contract

by referring to the most popular policies on this regard. Meanwhile, it tests how the provisions of such

policies affect termination rules in terms of rigidity and flexibility. An acceptable degree of rigidity and

flexibility of termination rules can be tested based on the possibility of combination between the basic

argumentations of job security policy and what has been promoted by labour market flexibility in a

new era. The policy of job security in regards to the termination of employment has taken a various

forms. One form is termination costs including severance pay, notice periods for employees and

compensation for dismissal based on the seniority. From an individual perspective, it is crucial for

employees to be protected from the employers’ arbitrariness, while, from an economic perspective, the

rate of employment and job turnover can be affected nega tively. A balance, then, is needed by reducing

the degree of job security provisions to an acceptable level according to the policy of flexibility in the

labour market.

Keywords: job security, workers’ right, flexibility, termination rules, employment composition,

severance pay.

1. Introduction

The formulation of rules and

regulations is hig hly effected by policies and

regimes followed by a state in reaction of

political, cultural, economics, and social

needs from time to time. Philosophically, the

law can be investigat ed within the context of

above categories to examine its root and the

logic of its adaptation. From this point, the

governmental policies and patterns for the

process of articulating law also might be

analyzed in light of political and social

needs, meaning that t he distinguish between

different policies which impact formulating

∗ The study was made under the scope of the Ministry of Justice’s programmes on aiming the strengthening of

the quality of legal education.

∗∗ PhD Candidate, Universi ty of Debrecen, Marton Géza Doctoral School of Legal Studi es.

1 Axel, B., Bengt, F., & Leif, J., (1997) “Labour Market Regi mes and Patterns of Flexibility : A SwedenCanada

Comparison”, Archiv Förlag, p. 35.

law in a state to another, depends on social,

economic and political changes.

The variety of policies, however, can

serve different aspects, and reflect the

strategy of government in dealing with

labour markets. In this regard, t he number of

regimes and policies that could affect

regulating the subject of termination of

employment contract is numerous.1

Accordingly, termination rules of

employment contract may differ in terms of

rigidity and flexibility due to the different

policies involved with labour markets.

Rigidity and flexibility in termination rules,

then, can be interpreted by referring to

adopted policy in responding to the social

variables. The classification of involved

Omed A ISMAIL 35

LESIJ NO. XXVI, VOL. 2/2019

policies at that area to distinguish between

the traditional and modern one, rely on the

historical background of emerging those

policies in the past and ongoing effect on the

future of enactment towards sustainable

developments.

It is apparent that the major policies

provided in the field of labour law, are the

policy of “job security” and “labour market

flexibility” in which the terminati on rules of

employment contract, internationally or

locally, can be regulated. Though, the

boundaries between job security and labour

market flexibility are complex, and

debatable, theories and justifications

concerning both of them are clear. It is worth

mentioning that job security initiates from

the point aims at providing more protections

to workers, in contrast, labour market

flexibility tends to reduce the level of

protections based on different

argumentations.2 An examination of the

basic elements of job security and labour

market flexibility, with examining the

necessity of emerging such those policies,

will respond the real questions about how

rules of termination of employment contract

have been changed and developed in

different ways and in multiple periods

between states. Another question also could

be answered is to what extent should

employees be protected under those policies

from not been fired unfairly in the job, and

the negative or positive impact for providing

2 Tamas Gyulavari, Gabor Kartyas, (2015), “The Hungarian Flexicurity Pathway? New Labour Code after

Twenty Years in the Market Economy”, Pazmany Press – Budapest, p. 47.

3 See Termination of employment instruments, Background paper for the Tripartite Meeting of Experts to

Examine the Termination of Employment Convention, 1982 (no. 158), and the Termination of Employment

Recommendation, 1982 (no. 166), prepared by; International Labour Organization, International Labour Standards

Department, Geneva, 18–21 Apri l 2011, p. 3.

4 Adriana D. Kugler. (2004). The Effect of Job Security Regulations on Labor Market Flexibility. Evidence from

the Colombian Labor Market Reform. University of Chicago Press, Volume ISBN: 0-226-32282-3, p. 183. Available

at: https://www.nber.org/chapters/c10070.pdf. Accessed: 28-02-2019.

5 Molz, R. (1987). Employee Job Rights: Foundation Considerations. Journal of Business Ethics, 6(6), 449-458.

Retrieved from http://www.jstor.org/stable/25071683 Accessed: 27-03-2019.

6 Clark, A., & Postel-Vinay, F. (2009). Job Security and Job Protection. Oxford Economic Papers, 61(2), new

series, 207-239. Retrieved from http://www.jstor.org/stable/20529416. Acc essed: 27-02-2019.

such a high protection of employees on

labour market activities.

2. “Job Security” and Termination

of Employment Contract

The most common policy that would

impact termination of employment contract

is the policy of job security, which

establishes its argument based on the

necessity of providing social and legal

protections for employees in their

relationship with employers. It is essentially

intended to provide protection for employee,

since loss of his job will causes loss of his

and his family’s livelihood.3 In general, job

security requires government imposing

adequate regulations to reduce the ability of

employers to hire and fire employees.4

Considering what has b een said above, Molz

has defined employee job security as “the

degree to which an employee can be certain

of retaining his job in the future.”5

Accordingly, this policy is used “to

protect workers against labour market

risks”6 where the protection legislations are

needed to protect workers against arbitrary

dismissal. The term of employment

protection legislations (EPL), then, refer to

the entire set of legislations, regulations, and

court rulings that place some restrictions to

the employers’ willing in the employment

contract. Such those regulations and

restrictions are, of course, serving workers in