Economic studies of employment protection systems tend to view law as an external reference system without considering that legal systems are based on dynamic factual and contractual relations and thus evolve over time. For us, legal regulations are a result of political compromises and unforeseeable legislative action, and labour law in particular is shaped by processes of implementation and control exercised by the industrial relations and employment protection systems. In order to analyse and compare various national labour regulations it is misleading in our view to rely on a single discipline approach. Our aim in this chapter is to show that legal and economic labour market theories, which assess the impact of regulation on labour market efficiency, are .to some extent complementary and can be used to develop a multi-disciplinary theoretical design for the analysis of employment relationships.