Oh! I always like to hear from the Dutch. If you come back Scrooge, I have read that the unemployment benefits in the Netherlands are terrific and this creates this amazing dynamic workforce where everyone is finding great jobs because no one is stuck anywhere etc, and employers have a lot of freedom to hire and fire? Thoughts?
Unemployment benefits are pretty good I suppose. For an employee who is fired beyond his own fault, you usually receive 3 or X months worth of unemployment benefits, where X is the amount of years worked in succession prior to becoming unemployed. The benefit is approximately 70% of your last earned wage, up until € 2800 euros per month. There is also a base grant of between € 668 and € 1336 per month for people without a job, but you are very restricted in what you are allowed to do if you receive that (no holidays, all the way up to unannounced house visits to check if you still are allowed that grant in extreme cases). For people who work as contractors, there are no unemployment benefits. You're expected to save for periods of unemployment through the fee you charge as a contractor.
From an employer point of view, there is a strange division in three classes of people who can work for you however in terms of freedom to hire/fire:
A) Employees on a temporary contract
It is basically impossible to fire people on a temp contract, as a judge would assign a compensation worth the rest of the wages of the temp contract as reimbursement. You can let the contract expire and don't have to pay anything additional however, if the employee is not performing well. Most people start with a temp contract, and while legally not allowed to have more than 3 temp contracts in a row, there is a loophole that if you are not employed for 3 + months inbetween your 3rd temp contract and your next, that the counter resets, even if it is with the same employer. Employers use this trick to avoid having to hire someone on a permanent contract, because ...
B) Employees on a permanent contract
These are very hard to fire. Except if someone is really being an jerk, harassing etcetera, for a seriously underperforming employee you will have to make a case against them. Usually this takes two years of gathering evidence, showing you did a lot to try to improve that employee, and then bringing it to court. The other way to fire people is if you can show that for economical reason, you will have to do so in order for your business to survive. If you take that route, usually you will have to show that with the group of people you fire, that the composition of age groups in your company after the firing is comparable to the composition of age groups before firing. If you take a re-organization route, you have a bit more freedom if you change functions more than 20%. The re-organization route is most popular in getting rid of employees once you have to.
C) Contractors
A big move the past few years has been moving to contractors for work (now about 15% of workforce). These are a double edged sword. For middle to high income contractors, it's a great move. Your pay tends to go up bigtime and you have much more freedom to work where and how you want and these contractors have massively reduced the burden on companies to hire expensive people on a permanent contract. For low income contractors, the move was often initiated by the employer, by firing (or expiring temp contracts) the workers, and then suggesting they may hire them back as contractors (for about the same net income for the contractor). Difference is, they miss out on a lot of the social benefits of working (such as unemployment, pension etc). There is a burden on the company hiring the contractor to ensure it's not a "fake contractor" and can be taxed as employee, but I have never heard of this being put in practice where it should, but rather to chase down the middle to high income contractors.
Bit of a long story, and I think we're doing quite ok. The US employment type is probably more like the contractors situation here, with 2 weeks notice and all. I would like less protection for the people on a permanent contract, and a bit higher wages in general as a result (the huge protection is an additional reason for employers to not increase wages too much once on a permanent contract). Overall I think we're doing allright though.