THE EFFECT OF TRADITIONAL AND MODERN POLICIES ON TERMINATION OF EMPLOYMENT CONTRACT
THE EFFECT OF TRADITIONAL AND MODERN POLICIES ON TERMINATION OF EMPLOYMENT CONTRACT

Summary/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 negatively. 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.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 negatively. 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.

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