Verlag:
University of Trier, Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier
Zusammenfassung:
In many countries, the termination of employment contracts has to be either on employer initiative or on employee initiative. In 2008, the French government introduced a change in doctrine: it became possible to terminate employment contracts by mutual consent at a lower cost. We show that the reform was followed by a very significant increase of about 20% in outflow of permanent workers as well as by the replacement of around 10% of dismissals for cause by terminations by mutual consent. By promoting terminations by mutual consent, the reform has improved labor market fluidity and reduced the risks of labor disputes.