The easy fire and easy hire


An article published in 2008 by Ruud Muffels and Ruud Luijkx argues that the Anglo Saxon and the Nordic labour markets are the most flexible when it comes to labour mobility in the world. However, looking at the rules and regulations in the UK concerning when you would like to hire or fire a person, it is clear that this process is in fact far easier in the Nordic countries.

If you began looking for government regulation in Denmark on how to fire and hire people in the private sector you would end up using a lot of time, simply because there is not much. In the Danish system there is no legislation regulating reasons or notice periods of dismissals. According to most mutual conventions however, employers are required to give notice in advance excepting dismissals due to criminal offences or unsuitable behaviour in the workplace. Additionally employers are not required to justify the reasons for dismissal. In the UK, it is relatively difficult for en employer to fire employees because of the several notices and the necessity for a reason for the dismissal. By slowing down the firing process, the UK of course creates hesitation among employers to hire when the economy is changing. Just what you don’t need as the country tries to drag itself out of recession.

This sort of government interference in labour market issues is counterproductive and is ill suited to deal with a quickly changing international economy. Letting those people who are in touch with the economy on a daily basis deal with labour market contracts would by far increase the adaptability of the system and help increase job creation.