The 1973 and 1975 legislation relating to the protection of employment has failed to bring about all of the expected results. It has failed to reverse unemployment which continued to rise. Having been designed and then refined over 35 years by theorists from the French school of employment law, it has burdened small and medium sized businesses by increasing the financial consequences of breach of open – ended employment contracts. Based on the three guarantees system (procedure, legal base and compensation) and strengthened by threshold considerations, it has curbed both the initiatives and expansion of the said businesses due to the psychological effects thereof on managers as well as to the effects thereof on the businesses’ economy. We recall the involvement of almost all of the legal professionals and of the political and union representatives, as well as the inability of the business world to evaluate and challenge a phenomenon despite it being ineffectual as regards reducing unemployment as well as other detrimental effects upon business. We complete our review of the literature in this field by considering various practical examples drawn from our own professional experience which latter relates to the effectiveness of the said three guarantees. We recall that the classic paradigm involves a consideration of the employee’s situation and an optimisation of the latter by means of laws which protect insiders (via O.E.E.C, Open – Ended Employment contracts) to the detriment of outsiders on fixed term contracts, temporary employees or job seekers. We are determined to reverse this by starting from the basic equation of a business: an individual, an idea, capital, an acceptance of risk. Thus the employment contract comes second. It depends from a logic of costs in which we intend to include all costs relating to employment in France, whether deferred – revealed after the employee has left, at the end of a case in the Employment Appeals Tribunal – or uncovered. Of course, we have differentiated uncovered costs from the notion of hidden costs, which latter are usually linked to the underperformance of a business. We came to carry out this research via Williamson’s transactional costs theory, and we have applied it to French legislation (the complexity of which still remains to be addressed by the Anglo-Saxons). It allows us to go beyond those employment costs which are generally acknowledged, in order to uncover other costs which have not been included in any French legal, fiscal or accounting regulations. Sometimes they are even ignored by managers. By drawing a new approach from our experience as practitioner and researcher and from our use of empirical examples, we have established a classification of uncovered costs. It has enabled us to redefine the reality of employment costs, related to a cause, namely to the presence of the employee in the business. However, the effects of the said presence are represented by various costs which are not accounted for in the immediate costs of work, such as operating and management costs relating to employee representative bodies, costs relating to incentive and participation, costs relating to comfort and especially, deferred costs, with the latter stemming from breach of employment contracts. Whether the said breach occurs in the context of a dismissal or it is another type of contractual breach, whether or not the causes are admitted or rejected by the parties (resulting in proceedings and the related imposition by the court of compensation, wages or supplements to wages) the said costs are not included in employment costs resulting from the provision by the employee of services in the context and at the time of his employment. Thus we are proposing a methodology which will take into account the uncovered costs of employment and which will seek to relocate them in the generally acknowledged immediate costs of the employee’s work.