Europe's ridiculous labor regulations do more to strangle startups in the crib than almost anything else. Zynga may have done some unethical things, but firing employees they didn't need was not one of them.
"Europe's ridiculous labor regulations do more to strangle startups in the crib than almost anything else"
Or alternatively, and this is just my opinion here, you could say that Europe's labor regulations help protect employees from unscrupulous employers seeking to take advantage.
I just don't buy the argument that EU labour laws "strangle startups". Firstly, the actual laws vary from country to country. Secondly, most labour restrictions are phased in over the course of employment. For example, in the UK employees can be dismissed without reason for up two years from the date of hiring. I doubt this is "strangling" start-ups, especially when you consider that in the start-up space many people work less than two years per company.
Perhaps you personally have had some bad experiences, but I don't go to meet-ups around Europe and hear people saying "if only we had a labor market that favoured employers more, then I could get my start-up off the ground!"
Let me put it another way: last month, the UK government put forward some proposals that would drastically reduce employee rights in exchange for companies offering employees small (£2-10k) amounts of equity when they joined. If what you say is true, you would expect companies to jump at the chance. However, the CBI (the main lobby group for British industry) was very luke-warm towards the proposals. They felt that labor laws in the UK were not "strangling" business in the UK, and were in fact an issue of secondary importance when compared to tax incentives and other financial matters.
It's difficult to make generalizations about "Europe" because each country has its own set of labor laws. From what I hear, Britain has a pretty heavy tax situation. This leads to multi-national companies setting up "dutch sandwiches" and other ridiculous tax schemes. They end up paying very little; small and medium-sized businesses pay the full amount. I'm not surprised that various business interests felt that tax reform should be high up on the government's agenda. I don't see how it in any way invalidates the need for other reforms.
I also don't see why making people ridiculously hard to fire is "favoring employees." Maybe it just disadvantages employees who are actually good at their jobs, but didn't manage to get in the door before the incompetent or unsuitable ones? I've been fired before. It's part of life, like breaking up with a significant other. Relationships that have gone bad shouldn't be forced to fester.
For an extreme example of "pro-employee" (but not really) regulations gone bad, check out Spain. More than half of young people under 25 cannot get a job, because of the gold-plated employment contracts their elders negotiated years ago. The unemployment rate for the country as a whole is at least 25% now. See http://www.huffingtonpost.com/2012/08/01/europe-youth-unempl....
Spain has a two-tier labor market where temporary employees are treated very poorly, and usually fired before various "magic dates" kick in when they would automatically get benefits. In the meantime, full-time employees are virtually unsackable and coddled. The older generation, like vampires, are living off the young.
I do think that one problem with the situation in the UK is that 'getting sacked' is a real problem for your career - there's a big stigma associated with it and it can make it very hard to get your next position. If there's less of a sense of fault in dismissal, maybe that's less of a problem.
However, I'm somewhat dubious about claims of it leading to unemployment due to old and useless employees who are entrenched in their jobs - if it were, wouldn't there be more scope for new companies to emerge who weren't weighed down by those older employees? If adding a new employee did add value, wouldn't it be worth doing anyway? If those employees sacked before the magic date were in high value roles, would companies be willing to throw away their experience? I suspect that the problems ultimately stem from deeper problems than this, especially in the case of Spain and Italy - there's probably a thesis that centres around them being historically poor, agricultural countries who've artificially benefited from the EU in a way that has masked big problems in the fundamentals of their economies.
"startups" are not the economy. A startup is barely a real business, so let's not get to hung up on the effect that labour laws have the questionable benefit startups bring to Real Life (tm).
Now US employment law might help startups grow quickly, but the flip side is uncertainty and insecurity for millions of employees in all walks of life. That's your trade off, and you have to get out of the startup bubble world if you really think it's worth it.
New Zealand and Australia also have relatively strong (compared the the US) labour protection laws, and unemployment remains low. Yes, companies need to be more careful when planning, but they are able to lay off staff when the business is suffering, without compromising the protection of employees to spurious dismissal.
Actually, no. Obviously I don't know where you're from, but I'd assume it's not the UK.
Most employee rights come into effect immediately. After one month, you earn the right to one weeks notice, and pay if you are suspended from work for medical reasons, or if you're laid off.
After that, the only extra benefits you get are after 1 year, you can claim unfair dismissal. After 2 years, you can claim redundancy pay.
If you are from the UK, here's some help from the Citizens Advice Bureau.
Actually, your own link is contradicting what you're saying! Here's what it says:
"In most cases to be able to claim unfair dismissal you will have to have worked for your employer for one year if you started before 6 April 2012 or two years if you started on or after that date"
Note the bit at the end about the period changing to two years as of last April. This is a new change, if you're not actively involved in HR or hiring you may not be aware of it.
>Please read what economists have written before you add your opinion.
You're either being obnoxious or are not as informed as you think you are when characterizing all economists' opinions on "at-will" employment as monolithic enough, and the IMF's economists as representative enough of that monolithic opinion that making a statement that disagrees with them should disqualify you from having an opinion.
>Europe's ridiculous labor regulations do more to strangle startups in the crib than almost anything else.
That's your opinion. A different opinion might be that Europe simply lacks a good "startup hub" like PG talks about.
The fact is, it depends on where you're talking about. In Switzerland and the UK you can certainly fire people if you want/need to. You just have to give them notice of a few weeks (or months in Switzerland). This isn't "ridiculous" and the employee is held to the same standard.
Unlike the US where the power difference between employer and employee is clearly seen with the expected two week notice of employees and 0-minute notice expected of employers.
One analysis of Europe's inflexible labor market is here, by the IMF: http://www.imf.org/external/pubs/ft/fandd/2000/06/soltwede.h...
Europe's ridiculous labor regulations do more to strangle startups in the crib than almost anything else. Zynga may have done some unethical things, but firing employees they didn't need was not one of them.