But from the perspective of the individual worker, a much more important continuity is the one of salary, insurance, and pension. This is the stability that the employee continues getting at Company D.
in the current scenario of contract works, the employee is getting all the negative effects of changing a job without any upside.
of course I am not talking about complete US style firing, but something in the middle. The option to fire with adequate notice let's say 3 months and adequate compensation, let's say 3 months of compensation after finishing your time. This way, the employee has 6 months of job Hunting, (I think that is a sweet spot to make it reasonable for both the company and the employee)
Companies also currently aren't completely banned from firing people. If and when they do, it can look like you described, with adequate notice and compensation.