Employment protection regimes and dismissal of members in worker cooperatives

In connection with the "Great Reset" literature in management and organizational theory, this article discusses human resource sustainability, employment stability, and layoffs in worker cooperatives, a unique organizational form in which employees are members holding residual control rights. Theoretical and empirical contributions show that worker control stabilizes employment better than investor ownership, opening the door to stronger employment protection. The paper leverages key theoretical insights from evolutionary economics and systems theory to discuss the benefits and critical elements associated with limiting member layoffs in worker cooperatives. While strong employment protection can lead to short-term inefficiencies and underperformance due to labour hoarding, imperfections in governance and control mechanisms, it can foster better accumulation and retention of firm-specific human capital and dynamic capabilities, thereby supporting long-term performance.