IDEAS home Printed from https://ideas.repec.org/a/bla/labour/v35y2021i2p264-290.html
   My bibliography  Save this article

The impact of unfair dismissal regulation: Evidence from an Australian natural experiment

Author

Listed:
  • Benoit Pierre Freyens
  • Paul Oslington

Abstract

This paper assesses the outcomes of a unique Australian natural experiment with dismissal regulation introduced in 1996, radically reformed in 2006 and reregulated in 2009. Drawing on a large database of unfair dismissal cases, we assess the impact of dismissal regulation on unfair dismissal claims, how they are resolved, and on the determination of compensation amounts. Regulatory changes affect claims and success rates, but there is little change in compensation payments across the three regimes as legal conventions about their calculation were unaffected by the regulatory changes. One theme through all our findings is the large impact of administrative procedures on outcomes.

Suggested Citation

  • Benoit Pierre Freyens & Paul Oslington, 2021. "The impact of unfair dismissal regulation: Evidence from an Australian natural experiment," LABOUR, CEIS, vol. 35(2), pages 264-290, June.
    • Handle: RePEc:bla:labour:v:35:y:2021:i:2:p:264-290
    DOI: 10.1111/labr.12193
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/labr.12193
    Download Restriction: no
    File URL: https://libkey.io/10.1111/labr.12193?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Freyens, Benoit Pierre & Gong, Xiaodong, 2020. "Judicial arbitration of unfair dismissal cases: The role of peer effects," International Review of Law and Economics, Elsevier, vol. 64(C).
    2. Bertola, Giuseppe, 1999. "Microeconomic perspectives on aggregate labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 45, pages 2985-3028, Elsevier.
    3. Berger, Helge & Neugart, Michael, 2011. "Labor courts, nomination bias, and unemployment in Germany," European Journal of Political Economy, Elsevier, vol. 27(4), pages 659-673.
    4. Giuseppe Bertola, 2004. "A Pure Theory of Job Security and Labour Income Risk," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(1), pages 43-61.
    5. Ernst Fehr & Lorenz Goette & Christian Zehnder, 2009. "A Behavioral Account of the Labor Market: The Role of Fairness Concerns," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 355-384, May.
    6. Boeri, Tito & Garibaldi, Pietro & Moen, Espen R., 2017. "Inside severance pay," Journal of Public Economics, Elsevier, vol. 145(C), pages 211-225.
    7. Paul Oslington, 2020. "What is an Australian Job Worth?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 53(4), pages 482-493, December.
    8. John T. Addison & Paulino Teixeira, 2003. "The Economics of Employment Protection," Journal of Labor Research, Transaction Publishers, vol. 24(1), pages 85-129, January.
    9. Pedro S. Martins, 2009. "Dismissals for Cause: The Difference That Just Eight Paragraphs Can Make," Journal of Labor Economics, University of Chicago Press, vol. 27(2), pages 257-279, April.
    10. K.G. Knight & Paul Latreille, 2000. "Discipline, Dismissals and Complaints to Employment Tribunals," British Journal of Industrial Relations, London School of Economics, vol. 38(4), pages 533-555, December.
    11. Lawrence M. Kahn, 2012. "Labor market policy: A comparative view on the costs and benefits of labor market flexibility," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(1), pages 94-110, December.
    12. Booth, James Francis & Freyens, Benoit Pierre, 2014. "A study of political activism in labour courts," Economics Letters, Elsevier, vol. 123(3), pages 370-373.
    13. Alexander J. S. Colvin, 2006. "Flexibility and Fairness in Liberal Market Economies: The Comparative Impact of the Legal Environment and High‐Performance Work Systems," British Journal of Industrial Relations, London School of Economics, vol. 44(1), pages 73-97, March.
    14. David H. Autor & John J. Donohue & Stewart J. Schwab, 2004. "The Employment Consequences of Wrongful-Discharge Laws: Large, Small, or None at All?," American Economic Review, American Economic Association, vol. 94(2), pages 440-446, May.
    15. Samuel Bentolila & Giuseppe Bertola, 1990. "Firing Costs and Labour Demand: How Bad is Eurosclerosis?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(3), pages 381-402.
    16. Benoit P. Freyens, 2011. "Dismissal Disputes and the Incentives to Bargain: Estimates of the Contract Zone," ILR Review, Cornell University, ILR School, vol. 64(3), pages 576-598, April.
    17. Per Skedinger, 2010. "Employment Protection Legislation," Books, Edward Elgar Publishing, number 13686.
    18. Stephen Wood & Richard Saundry & Paul Latreille, 2017. "The management of discipline and grievances in British workplaces: the evidence from 2011 WERS," Industrial Relations Journal, Wiley Blackwell, vol. 48(1), pages 2-21, January.
    19. Paul Oslington & Benoit Pierre Freyens, 2013. "A First Look at Incidence and Outcomes of Unfair Dismissal Claims under Fair Work, WorkChoices and the Workplace Relations Act," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 16(2), pages 295-306.
    20. George L. Priest & Benjamin Klein, 1984. "The Selection of Disputes for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 1-56, January.
    21. Benoit Freyens & Paul Oslington, 2007. "Dismissal Costs and Their Impact on Employment: Evidence from Australian Small and Medium Enterprises," The Economic Record, The Economic Society of Australia, vol. 83(260), pages 1-15, March.
    22. Freyens, Benoit Pierre & Gong, Xiaodong, 2017. "Judicial decision making under changing legal standards: The case of dismissal arbitration," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 108-126.
    23. Vince, Joanna & Smith, Anthony D.M. & Sainsbury, Keith. J. & Cresswell, Ian David & Smith, David C. & Haward, Marcus, 2015. "Australia׳s Oceans Policy: Past, present and future," Marine Policy, Elsevier, vol. 57(C), pages 1-8.
    24. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Does Employment Protection Reduce Productivity? Evidence From US States," Economic Journal, Royal Economic Society, vol. 117(521), pages 189-217, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul Oslington, 2020. "What is an Australian Job Worth?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 53(4), pages 482-493, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Henri Fraisse & Francis Kramarz & Corinne Prost, 2015. "Labor Disputes and Job Flows," ILR Review, Cornell University, ILR School, vol. 68(5), pages 1043-1077, October.
    2. Federico Cingano & Marco Leonardi & Julián Messina & Giovanni Pica, 2016. "Employment Protection Legislation, Capital Investment and Access to Credit: Evidence from Italy," Economic Journal, Royal Economic Society, vol. 126(595), pages 1798-1822, September.
    3. Benoit P. Freyens, 2011. "Dismissal Disputes and the Incentives to Bargain: Estimates of the Contract Zone," ILR Review, Cornell University, ILR School, vol. 64(3), pages 576-598, April.
    4. Anders Bornhäll & Sven-Olov Daunfeldt & Niklas Rudholm, 2017. "Employment protection legislation and firm growth: evidence from a natural experiment," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(1), pages 169-185.
    5. Freyens, Benoit Pierre & Gong, Xiaodong, 2015. "Dismissal Laws in Australia: Reforms and Enforcement by Labour Courts," IZA Discussion Papers 9295, Institute of Labor Economics (IZA).
    6. Okudaira, Hiroko, 2018. "The economic costs of court decisions concerning dismissals in Japan: Identification by judge transfers," International Review of Law and Economics, Elsevier, vol. 53(C), pages 60-75.
    7. Pierre Cahuc & Stéphane Carcillo & Bérengère Patault & Flavien Moreau, 2024. "Judge Bias in Labor Courts and Firm Performance," Journal of the European Economic Association, European Economic Association, vol. 22(3), pages 1319-1366.
    8. Freyens, Benoit Pierre & Gong, Xiaodong, 2017. "Judicial decision making under changing legal standards: The case of dismissal arbitration," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 108-126.
    9. O’Higgins Niall & Pica Giovanni, 2020. "Complementarities between Labour Market Institutions and their Causal Impact on Youth Labour Market Outcomes," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(3), pages 1-37, July.
    10. Benoît Pierre FREYENS, 2010. "Measuring firing costs: The case for direct methods," International Labour Review, International Labour Organization, vol. 149(3), pages 287-313, September.
    11. Marco Bertoni & Simone Chinetti & Roberto Nisticò, 2023. "Employment Protection, Job Insecurity, and Job Mobility," CSEF Working Papers 684, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    12. Parsons, Donald O., 2011. "Mandated Severance Pay and Firing Cost Distortions: A Critical Review of the Evidence," IZA Discussion Papers 5776, Institute of Labor Economics (IZA).
    13. Bjuggren, Carl Magnus, 2018. "Employment protection and labor productivity," Journal of Public Economics, Elsevier, vol. 157(C), pages 138-157.
    14. Benoit Freyens & Paul Oslington, 2007. "Dismissal Costs and Their Impact on Employment: Evidence from Australian Small and Medium Enterprises," The Economic Record, The Economic Society of Australia, vol. 83(260), pages 1-15, March.
    15. Goerke, Laszlo & Neugart, Michael, 2015. "Lobbying and dismissal dispute resolution systems," International Review of Law and Economics, Elsevier, vol. 41(C), pages 50-62.
    16. repec:zbw:bofitp:2008_029 is not listed on IDEAS
    17. Bassanini, Andrea & Garnero, Andrea, 2013. "Dismissal protection and worker flows in OECD countries: Evidence from cross-country/cross-industry data," Labour Economics, Elsevier, vol. 21(C), pages 25-41.
    18. Chen, Yu-Fu & Funke, Michael, 2009. "China's new Labour Contract Law: No harm to employment?," China Economic Review, Elsevier, vol. 20(3), pages 558-572, September.
    19. Etienne Lale, 2019. "Labor-market Frictions, Incomplete Insurance and Severance Payments," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 411-435, January.
    20. Pierre, Gaëlle & Scarpetta, Stefano, 2004. "Employment Regulations through the Eyes of Employers: Do They Matter and How Do Firms Respond to Them?," IZA Discussion Papers 1424, Institute of Labor Economics (IZA).
    21. MacLeod, W. Bentley, 2011. "Great Expectations: Law, Employment Contracts, and Labor Market Performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 18, pages 1591-1696, Elsevier.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:labour:v:35:y:2021:i:2:p:264-290. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/csrotit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.