Job Security

The concept of job security relates to the level of stability a job has over time. In addition to the actual stability of a job, job security also relates to the perception held by an employee that his or her job is secure. Historically, job security held a central role in the psychological contract between workers and their employers. The employee believed that in return for providing his or her services and loyalty, the employer would provide stable employment. However, there is a sense that the contract has been broken, that the work rules have changed, driven both by employer and employee actions.

The employment relationship takes a number of forms, from temporary or contract employment intended for a specific term or project duration, to a relationship perceived by the employer and/or the employee as a long-term commitment. That relationship can be covered under the terms and conditions of a specific employment contract, as is the case in a unionized employment relationship, or simply exist as long as it satisfies the needs of the parties. In such an “at-will” employment relationship, both parties retain the right to end the relationship for any reason or for no reason.

In the United States, the employment relationship is based on the doctrine of employment at will. This doctrine holds that in the absence of a specific employment contract, an employee can be terminated for any reason or no reason, and in turn the employee can quit for any reason or no reason. Under this doctrine, employers were under no legal constraints to provide secure or stable employment. They could terminate any employee, at any time, with no requirement to provide justification to the employee. In the [Page 1212]1970s and 1980s the courts began to weaken this doctrine, holding that employer actions could create an implied contract that changed the relationship from “at will” to one of “just cause.” Shifting to a “just cause” doctrine of employment requires an employer to provide a valid and justifiable reason for terminating a worker and allows the worker to challenge that reason in court. The courts found that statements in employee handbooks or made by managers, which implied career-long employment, or job security for good performance, were sufficient to limit the employer's right to terminate without reason or cause. Thus, to protect their rights to terminate employees “at will,” many employers began explicitly to indicate to all new hires, and periodically to existing employees, that the employment relationship between the company and worker is one that is “at will” and that they may be terminated at any time without the need for a reason. Such declarations had the effect of highlighting for all employees the tenuous nature of the employment relationship and further eroded perceptions of job security. The doctrine of employment at will, while somewhat restricted by a number of court rulings and statutes, is still the prevailing employeremployee relationship in the United States and holds that flexibility in the employment relationship is more important than security.

In European countries, the employment relationship is based on regulations and statutes that give much greater protection to the worker and make it much more difficult for employers to terminate them. Many believe that the flexibility employers have with regards to terminating employees in the United States is, in part, the reason that unemployment in the United States tends to be consistently lower than in EU countries. The argument goes that in the United States, an employer would be more willing to add workers as business needs require, knowing that those workers can be removed should conditions warrant, while in EU countries, employers, knowing that once hired they will not be able to terminate the worker easily, will hold off hiring new workers for as long as possible. To address this structural unemployment, several European governments sought to modify existing work rules early in the 21st century that would make terminating younger workers easier for employers, giving employers greater flexibility in terminating workers. These proposals have generally been met with widespread protests.

...