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Comparative Wrongful Dismissal Law: Reassessing American Exceptionalism Samuel Estreicher

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Comparative Wrongful Dismissal Law: Reassessing American Exceptionalism Samuel Estreicher NORTH CAROLINA LAW REVIEW Volume 92 | Number 2 Article 2 1-1-2014 Comparative Wrongful Dismissal Law: Reassessing American Exceptionalism Samuel Estreicher Jeffrey M. Hirsch Follow this and additional works at: http://scholarship.law.unc.edu/nclr Part of the Law Commons Recommended Citation Samuel Estreicher & Jeffrey M. Hirsch, Comparative Wrongful Dismissal Law: Reassessing American Exceptionalism, 92 N.C. L. Rev. 343 (2014). Available at: http://scholarship.law.unc.edu/nclr/vol92/iss2/2 This Article is brought to you for free and open access by Carolina Law Scholarship Repository. It has been accepted for inclusion in North Carolina Law Review by an authorized administrator of Carolina Law Scholarship Repository. For more information, please contact [email protected]. COMPARATIVE WRONGFUL DISMISSAL LAW: REASSESSING AMERICAN EXCEPTIONALISM' SAMUEL ESTREICHER & JEFFREY M. HIRSCH** Commentators have long debated the merits of the American "at- will" rule, which allows employers and employees to end the employment relationship without cause or notice, absent a constitutional,statutory, or public policy exception. One premise for both proponents and opponents of at-will employment is to stress the uniqueness of this default among other developed countries, which generally require "cause" for most dismissals. Although other countries' cause regimes differ significantly from the United States' on paper, this Article addresses whether those differences in normative law also reflect differences in employees' protection against wrongful termination in reality. The existing literature on dismissal law stops at a comparison of countries' normative laws as they appear on the books. In comprehensively examining the dismissal regimes of numerous countries, this Article goes beyond the text of the relevant statutes and cases by using information from foreign employment law practitionersand available data-particularlyclaimants' success * @ 2014 Samuel Estreicher & Jeffrey M. Hirsch. ** Respectively, Dwight D. Opperman Professor of Law, New York University School of Law, and Associate Dean for Academic Affairs and Geneva Yeargan Rand Distinguished Professor of Law, University of North Carolina School of Law. The authors owe a debt of gratitude to the wonderful librarians at their respective institutions and to distinguished practitioners and academics from abroad, including Luca Allevi, Gordon Anderson, Raffaela Betti, Susan Bison-Rapp, Anne Boileau, Erika Collins, Hugh Collins, Alexander Colvin, David Doorey, Bryan Dunne, Friederike Gobbels, Stephane Henry, Bob Hepple, John Howe, Daniel Hund, Pietro Ichino, Georgina Kabemba, Katrina Linos, Frangois Longpr6, Michael Lynk, Francesca Marinelli, Lisa Mayhew, Morton Mitchnick, Barbara Mok, Mariko Morita, Hiroya Nakakubo, Adam Salter, Deborah Sankowicz, Corinne Vargha, and Michael Zimmer. This Article also benefited greatly from feedback generated during presentations at the Seventh Annual Comparative Law Works-in- Progress Workshop, Princeton University; Duke University School of Law Faculty Forum; and Seventh Annual Colloquium on Current Scholarship in Labor & Employment Law. The authors were very ably assisted by students Leslie Caia, Thomas Hodge, Casey Turner, and Gisela Valle-Garcia. This Article updates and expands upon an earlier effort by one of its co-authors, Samuel Estreicher, Unjust Dismissal Laws: Some Cautionary Notes, 33 AM. J. COMP. L. 310 (1985), updated in GLOBAL ISSUES IN EMPLOYMENT LAW 74-85 (Samuel Estreicher & Miriam A. Cherry eds. 2008). 344 NORTH CAROLINA LAW REVIEW [Vol. 92 rates and average remedies-in an attempt to observe how the laws actually operate. The authors find that, even on paper, the cause protection of the surveyed countries is far less robust than typically described. Moreover, the actual practice in these countries shows that challenges to dismissal can be difficult to pursue and generally result in modest remedies by U.S. standards. This suggests that the United States, with its at-will default and broader remedies, is actually part of a relatively narrow continuum of employment laws found in advanced countries. This Article hopes to spur more in-depth descriptive work on the employment laws of other countries and to broaden the terms of the debate over the relative merits of the U.S. employment dismissal system and the dismissal systems of cause regimes. INTRODUCTION .......................................... 346 I. AN INTERNATIONAL SURVEY OF UNJUST DISMISSAL PROTECTION ................................ ....... 352 A. Australia ................................. 357 1. Individual Unjust Dismissal .................. 358 2. Economic Dismissals and Layoffs ............. 360 3. Unemployment Assistance.. .........................362 4. Enforcement ...................... ...... 363 B. Brazil ............................ ........ 365 1. Individual Unjust Dismissal .......... ....... 365 2. Economic Dismissals and Layoffs; Unemployment Assistance ........................ ..... 367 3. Enforcement ............................ 368 C. Canada .................................. 370 1. Canadian Federal Law......... .................. 370 a. Individual Unjust Dismissal .......... ..... 370 b. Economic Dismissals and Layoffs ....... ...... 371 c. Unemployment Assistance.......... ...... 372 d. Enforcement.. ......................... 373 2. Canadian Provincial Law....... ................. 374 3. Canadian Common Law....... ................. 376 D. China............. ................ ..... 378 1. Individual Unjust Dismissal ......... ....... 378 2. Economic Dismissals and Layoffs .......... ........ 381 3. Unemployment Assistance .................... 382 4. Enforcement ....................... ..... 384 20141 WRONGFUL DISMISSAL COMPARISON 345 E. France ................................... 387 1. Individual Unjust Dismissal .......... ....... 387 2. Economic Dismissals and Layoffs ........... ........ 389 3. Unemployment Assistance .......... ........ 391 4. Enforcement ...................................392 F. Germany ................................. 395 1. Individual Unjust Dismissal ............ ...... 395 2. Economic Dismissals and Layoffs ......... .... 398 3. Unemployment Assistance. ......... ........ 399 4. Enforcement ............................ 400 5. German Works Councils .............. ..... 403 G. Ireland ............................ ....... 405 1. Irish Statutory Law................. ...... 405 a. Individual Unjust Dismissal .......... ..... 405 b. Economic Dismissals and Layoffs .. ............ 407 c. Unemployment Assistance......................408 d. Enforcement.............................410 2. Irish Common Law.......................412 H. Italy ........................ ................. 413 1. Individual Unjust Dismissal .......... ....... 413 2. Economic Dismissals and Layoffs ........... ........ 417 3. Unemployment Assistance .......... ........ 418 4. Enforcement ............................ 419 L Japan ................................... 420 1. Individual Unjust Dismissal .......... ....... 421 2. Economic Dismissals and Layoffs ............. 424 3. Unemployment Assistance .......... ........ 425 4. Enforcement ...................................426 J. Mexico .................................. 428 1. Individual Unjust Dismissal ......... ....... 428 2. Economic Dismissals and Layoffs ........... ........ 430 3. Unemployment Assistance. ......... ........ 431 4. Enforcement ............................ 431 K. United Kingdom ............................ 434 1. British Statutory Law...................434 a. Individual Unjust Dismissal .......... ..... 434 b. Economic Dismissals and Layoffs ...... ..... 436 c. Unemployment Assistance......................438 d. Enforcement.........................439 2. British Common Law..... ................. 442 L. United States... .............................. 443 II. SUMMARY OF UNJUST DISMISSAL REGIME COMPARISONS ..445 346 NORTH CAROLINA LAW REVIEW [Vol. 92 A. Individual Unjust Dismissal....................445 B. Economic Dismissalsand Layoff . ................ 449 C. Unemployment Assistance.....................452 D. Enforcement..............................453 1. Adjudication Systems........................453 2. Statutes of Limitations.......................455 3. Remedies.................................456 4. Success Rates .................. ............ 458 5. Award Sizes................. .............. 460 III. LESSONS FROM ABROAD..........................463 CONCLUSION........................................467 APPENDIX: SUMMARY TABLES...........................468 Table 1: Australia....................... ........... 468 Table 2: Brazil............................ ........... 469 Table 3: Canada,Federal Statutory Law ...... ..... 470 Table 4: China................................471 Table 5: France............................ .......... 472 Table 6: Germany ...................... ............ 473 Table 7: Ireland......................... ........... 474 Table 8: Italy.................................475 Table 9: Japan................................476 Table 10: Mexico..............................477 Table 11: United Kingdom........................478 Table 12: United States..........................479 Table 13: Country Summary ................................. 480 INTRODUCTION Terminations from employment are among the most significant' and frequently litigated aspects of American employment law.2 The 1. See Louis JACOBSON. ROBERT LALONDE & DANIEL SULLIVAN, THE COSTS OF WORKER DISLOCATION
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