policymakers demonstrate

76 Juan J. Dolado
Table 2.1 Chronology of EPL reforms in EU countries (Aleksynska and
Schmidt, 2014)
Area of regulation/country FRA GBR ITA ESP GRC PRT
Employment protection legislation
Maximum trial period – – 1919 1976 1920 1969
Regulation of fixed-term contracts 1890 a 1963 1919 b 1926 1920 a 1969
Obligation to provide reasons to the 1973 1975 1966 1956 – –
employee
Valid grounds (justified dismissal) 1973 ≈ 1963 c 1966 1926 – –
Prohibited grounds (unfair dismissal) 1910 1971 1966 1931 1920 1933
Workers enjoying special protection 1910 – 1919 1931 1928 1933
Notification requirements 1958 – – 1956 1930 1969
Notice period 1928 1963 1919 1931 1920 1969
Severance/redundancy pay 1967 1965 1919 1972 1930 1969
Compensation for unfair dismissal 1890 1975 1950 1926 – 1969
Procedure of reinstatement 1973 1975 1950 1931 – –
Court procedure (preliminary 1941 1918 1919 1926 1920 1933
mandatory conciliation, competent
court(s), existing arbitration, time
limits)
Regulation of collective dismissals 1975 – – 1972 1934 d 1974
Unemployment insurance 1905 e 1911 1919 f 1919 1945 1979
a Recognition of the use of temporary contracts as the laws on contracts of employment are only
applicable to indefinite contracts.
b The law acknowledges the existence of such contracts and provides an attempt to regulate them.
c Case law.
d Only applicable to public utility undertakings with more than 50 employees.
e This very first unemployment insurance system was founded by Decree of September 9, 1905
and consisted of state support to provincial syndicates that established sectorial unemployment
benefits schemes for their members.
f The Legislative Decree as of 1919 contains information on the Decree No. 670 as of April 29,
1917 introducing a general compulsory unemployment insurance.
of the existing EPL schemes in all these countries. With labour relations still
dominated by highly protected workers affiliated to unions (the median voter in
union elections) and by firms pushing for a quick implementation of cost-saving
policies, the only politically feasible way of allowing for internal and external
flexibility in firms’ adjustment to demand/supply shocks was through reforms
at the margin, that is, only applicable for newcomers. The typical reform made it
easier for firms to use fixed-term contracts or TC with low firing costs, without
significantly changing the protection of open-ended or PC (see Figure 2.1 where
time patterns of OECD indices of EPL strictness are displayed). This resulted
in a rapid increase of the share of fixed-term contracts, to the point of eventually
representing virtually all hires. Furthermore, subsequent reforms have also