Here in the Netherlands, it is very common for companies to hire people on external contracts. That means, the person is not a direct employee of the company, but of another company, like Randstad. Only the place of work and direct supervisor of the person is from the "host" company. In my company, almost 50% of the workforce is employed like this. If the company wishes to stop their employment at short notice, they can do it without any pushback.
Companies also pay 1.5-2 times the salary of the contractors to their "parent" companies, which then get divided between employee and "parent" company. They are willing to take this loss, in return for flexibility to fire the employee when economy is rough or if they underperform severely. It is also very difficult to fire or lay off direct employees with indefinite contracts.
Is this system common in your country as well? What is the use of having strong labour laws when companies are going to circumvent rules in this manner?