Comparative employee relations Essay Example | Topics and Well Written Essays - 2000 words

Comparative employee relations - Essay Example They feel that labor flexibility would negatively impact bargaining power of labor and would only increase firm’s profitability. Thus they seek greater protection from increased bargaining power of employers and job insecurity. They argue that insecurity has been consistently increasing due to liberalization, privatization and globalization. It is now important to study the issue within a proper theoretical framework. What constitutes an inflexible labor market? According to Solow (1998), an inflexible labor market is created â€Å"if the level of unemployment-insurance benefits is too high or their duration is too long, or if there are many restrictions on the freedom of employers to fire and to hire, or if the permissible hours of work are too tightly regulated, or if excessive generous compensation for overtime work is mandated, or if trade unions have too much power to protect incumbent workers against competition and to control the follow of work at the site of production, or perhaps if statutory health and safety regulations are too stringent† [Solow 1998]. This definition is exhaustive enough but still doesn’t touch upon the important relevant issues of generous severance pay, costly legal battles that are important to study since they form an integral part of job security legislations. Such legisla tion regardless of the country where it was form would most likely include provisions that increase the costs connected with firing an employee and regulating hiring process. Job termination is not such an inexpensive process. It includes the costs of notification and the money incurred during non-performing period, compensation, legal costs, legal compensation, etc. Due to all these problems, employers might try to decrease the strength of workers but then comes job security legislation, which provides coverage to employees. Even in good economic times, employers might want to hire new workers but may find themselves at a disadvantage because they