policymakers demonstrate

100 Juan J. Dolado
Table 2.2 Political support for transition to SOEC
(Dolado et al., 2015b)
Pro Con Indiff
Young workers Employed 100 a 0 0
Not employed 100 0 0
Older workers Employed 31.7 68.3 0
Not employed 0 0 100
Overall 79.7 10.2 10.1
a
All numerical entries refer to population measures in per cent.
EPL reform, when EPL for unfair dismissals of workers on PC went down from
45 d.w.y.s. to 33 d.w.y.s, whereas compensation for nonrenewal of TC went up
gradually from 8 d.w.y.s. to 12 d.w.y.s. The main finding is that while SOEC
will bring in a welfare gain (in terms of consumption equivalent units for the
current population at the time of the reform) of 1.93 per cent, the 2012 reform
would imply half of that gain.
2.7.3 Single/Unified Contracts in Practice
Nonetheless, a key requirement of all these proposals is the restriction of the
definition of unfair dismissal to false reasons, discrimination and prohibited
grounds. In other words, any economic motive or personal reason related to the
worker’s performance (such as reduction of individual productivity or unsuitability)
would be a fair and justified reason for dismissal, with the judicial
review of courts restricted to just assessing that the purported reason is not
in fact masking prohibited grounds. However, implementing this requirement
might be very difficult in countries whith a long tradition of judicial review of
employers’ decisions (see Ichino et al., 2003 and Jimeno et al., 2015). 15 For this
reason, since the aim of SOEC is to ensure that open-ended contracts become
the default option of firms, they should include a probation period to screen
applicants, as Dolado et al. (2015b) suggest. The objective is not to eliminate
short-duration jobs, but rather to avoid the rotation of temporary workers on the
same job as a means to save costs. Nonetheless, it is clear that the termination of
an open-ended contract is more costly and/or time-consuming for the firm than
the expiration of a fixed-term contract. This is true even if redundancy pay were
equalized across TC and PC. Workers on PC must receive an advance notification
explaining the motive for the dismissal and they have a right to challenge
this decision in court. Moreover, the dismissal of several workers within a short
time may entitle the worker to higher compensation or additional services as
part of a collective dismissal procedure. None of these obligations exists in