From the TUC

Why let facts get in the way of scrapping workers’ rights to redundancy payments?

03 Dec 2011, by in Labour market

The World Bank demonstrated that deregulatory neo-liberalism is alive and well, but turned its back on evidence-based policy making this week, when it published a report calling for countries to dismantle or reduce laws requiring severance payments for redundant workers … despite finding absolutely no evidence that these payments had any negative effects on employment levels or recruitment!

Reforming severance pay, published by the Bank’s Social Protection and Labour Unit, suggests that unemployment benefit is all that redundant workers need, although it accepts that, if employers and unions choose to negotiate redundancy pay, that could still be acceptable (that’s big of them!)

But as Peter Bakvis of the ITUC/Global Unions’ Washington Office comments:

Curiously, despite its radical proposals for eliminating or scaling down severance pay programmes, Reforming Severance Pay states that the research carried out for the book found little evidence of negative impacts on labour market outcomes, particularly ‘in the few studies that isolate the severance pay impact’.

The report itself says:

While proponents argue that flexicurity increases productivity and employment without  sacrificing employment security or hurting vulnerable groups, the evidence relating to productivity effects is tenuous. After all, greater labor mobility and associated worker dislocations surely cannot be viewed as a goal per se but rather as a means to promote productivity. More research into the effects and particular channels of productivity effects is needed.

Presumably, such research will continue to be sought, until the facts get it right….