Well, they are (things have changed a bit during the last centuries, after all). There is a specific set of laws covering civil cervants (a police officer would be a civil servant here). Other types of employees, the best English word I can think of is clerks, also have a set of laws governing their employment. Hourly paid workers are generally covered by union agreements.
Some types of jobs are out in the dark, but generally, you cannot fire somebody here without a legal reason. We have numerous court cases all the time about illegal termination.
That this should leave employers as hostages is, however, a myth. First of all, there are plenty of legal reasons for firing people, and even if there isn't one, you can get rid of them anyway, it's just more expensive.
Also, both laws and union contracts proscribe ritghts and duties to both sides. I have worked as a manager for 12 years, and I can tell you that this system is mostly for mutual advantage.
Hans