The OECD indicators of employment protection measure the procedures and costs involved in dismissing individuals or groups of workers and the procedures involved in hiring workers on fixed-term or temporary work agency contracts. It is important to note that employment protection refers to only one dimension of the complex set of factors that influence labour market flexibility. For information on other labour market policies and institutions in OECD countries, see the OECD Employment Database.
The indicators have been compiled using contributions from officials from OECD member countries and selected emerging economies and advice from labour law experts from the International Labour Organization.
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Legislation, Collective Bargaining and Enforcement: Updating the OECD Employment Protection Indicators, Social, Employment and Migration Working Paper no. 89, OECD, Paris
This paper presents updated estimates of the OECD employment protection indicators for 30 OECD countries and 10 emerging economies and examines the sensitivity of the synthetic indicators to the inclusion of provision though collective bargaining and exemptions of certain groups. It also provides evidence of the resources available in different countries for the enforcement of EP rules through courts and dispute resolution procedures.
Employment Protection in 2008 in OECD and selected non-OECD countries*
Scale from 0 (least stringent) to 6 (most restrictive)
* Data are for 2009 for France and Portugal. OECD average is the unweighted average for the 30 countries that were members of the OECD in 2008.
The OECD employment protection indicators are compiled from 21 items covering three different aspects of employment protection:
Individual dismissal of workers with regular contracts: incorporates three aspects of dismissal protection: (i) procedural inconveniences that employers face when starting the dismissal process, such as notification and consultation requirements; (ii) notice periods and severance pay, which typically vary by tenure of the employee; and (iii) difficulty of dismissal, as determined by the circumstances in which it is possible to dismiss workers, as well as the repercussions for the employer if a dismissal is found to be unfair (such as compensation and reinstatement).
Additional costs for collective dismissals: most countries impose additional delays, costs or notification procedures when an employer dismisses a large number of workers at one time. This measure includes only additional costs which go beyond those applicable for individual dismissal. It does not reflect the overall strictness of regulation of collective dismissals, which is the sum of costs for individual dismissals and any additional cost of collective dismissals.
Regulation of temporary contracts: quantifies regulation of fixed-term and temporary work agency contracts with respect to the types of work for which these contracts are allowed and their duration. This measure also includes regulation governing the establishment and operation of temporary work agencies and requirements for agency workers to receive the same pay and/or conditions as equivalent workers in the user firm, which can increase the cost of using temporary agency workers relative to hiring workers on permanent contracts.
For full details on the methodology and weights used to compiled the indicators, click here
|Detailed information on employment protection
For more information on dismissal regulation, visit the International Labour Organization’s employment protection legislation database EPLex. It provides detailed information on more than 50 variables relating to employment protection regulation in 72 countries in a searchable format as well as links to national labour legislation through the NATLEX database.