If you make it difficult to fire workers, then ...

...you also make it costly to hire workers.  The Economist has a pair of articles blaming the restrictive labor laws in the EU for its high unemployment.  Spain is singled out for being particularly bad.

Spain’s rules on firing permanent staff, which are particularly tough, though recent reforms have eased them slightly. That has been good for those lucky enough to hold a permanent contract. But Spanish rules give little protection to temporary workers. So employers hired lots of them—they made up about 30% of all employees before the crisis—and fired them when the downturn arrived