Interesting, in Brazil all the companies in the chain are liable in a labor-related law suit. Before the 2017 Labor Reform[1], frivolous law suits by former employees were a billionaire market because it used to be a risk-free gamble - after the reform the litigant is liable for exaggerated claims and there was a 46% drop in labor cases[2].
When I look at any market where the labor code is excessively protective, I see high unemployment rates specially among the young - Brazil, Spain, France[3]... I don't know about causation but clearly there is a correlation between employee over-protection and unemployment rates. I think it is the law of unintended consequences[4] in action: the legislator intention was good (protecting employee) but the net result is negative.
There is definitely a causation for high unemployment by such laws. But it actually goes even deeper.
In France for example, it is difficult for a company to fire an employee once they are legally hired.
Oracle, for example, has a policy of initiating an "intra-country transfer" where the employee is mandated to relocate from Paris to Montpellier. Not everyone wants to uproot their family like that. And then if they do accept the move, next year Oracle will relocate them to Bordeaux...
As I understood, once you hire someone in France the labor code makes it virtually impossible to terminate the contract.
In Brazil employers have to pay a fine if they fire a worker without a "fair cause" (~ 3.2% over the sum of all compensation paid to the employee while they worked for you), so the longer someone worked for you the more expensive it gets to fire them.
In France for example, it is difficult for a company to fire an employee once they are legally hired.
Oracle, for example, has a policy of initiating an "intra-country transfer" where the employee is mandated to relocate from Paris to Montpellier. Not everyone wants to uproot their family like that. And then if they do accept the move, next year Oracle will relocate them to Bordeaux...