Chapter 6: Comparative Law and Political Economy
John C. Reitz* 1 1.1 THE POLITICAL ECONOMY THESIS Employment Law as an Example In the spring of 2006, riots gripped France. The French government proposed to amend the statutory law concerning employment by introducing a type of employment that could be terminated without any reason (‘at-will employment’) for young, first-time workers. Most employment in France is covered by statutory protections prohibiting dismissal without substantial reasons. The riots illuminated in a particularly dramatic way how different prevailing ideas about the appropriate degree of state intervention in the market can be in various countries, even as between Western democratic nations with robust legal systems and many common cultural traditions. Americans looked on with growing disbelief as the strikes spread in France because most Americans work under at-will contracts. Many Americans had difficulty seeing how the French rioters, who included not only students, but also union members and retirees, could be so incensed about the introduction of a limited form of at-will employment.1 This example illustrates not only national diversity in views over the appropriate level of state intervention in the market, but also how those differences are reflected in substantial and important variations in legal rules. French law regulates employment relationships generally through legislation restricting employee dismissals in most cases to ‘cause’ (that is, serious breaches by the employee) or such restructuring of the business that it is impossible, even with job retraining, to find a new job within the company for the employee. When dismissals are allowed, French law requires...
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