If an employer knows they may lose money from claims of unfair firing, then they will resist hiring employees until they have sufficient funds to cover the cost of losing someone.
Anecdote in point : a member of my family runs a business. A new hire didn't work out, and after counselling them several times, they decided the person had to go. They waited until after Christmas, fired the employee, who said that they understood the reasons. The former employee found representation, came back and successfully won compensation for an unfair dismissal. The reason was that some paperwork had not been completed correctly during the firing process. The resulting legal costs and compensation meant that the position will remain unfilled for several months until the balance sheet position is restored.
It's the same law of unintended consequences that means rent controlled apartments actually decrease housing affordability in cities (apart from the lucky few). Employment policies like this decrease employment (apart from the lucky few). In both cases the results are the direct opposite for what they are intended.
In terms of a social policy : governments should cover minimum wages, working conditions and other safety issues. Compensation for unfair dismissal should be capped regardless of salary and paid out of a central fund taken from company income taxes.
That might be tough but that is life.