The alternative for companies is to take on employees on short term contracts. This is even worse for the worker as they never build up enough service to qualify for any redundancy payment, or, worse still, have security of employment to support application for a mortgage. My Daughter in Law is currently having to re-apply for her own job due to the short term contract that she had to sign. If she doesn't get the job then she won't get any redundancy. Is that better than having the job on a proper basis and then being made redundant two or three years down the line? I don't think so as if her short term contracts were lumped together she would have been entitled to a small redundancy payment.
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