> Why would labor protections be needed if the rational move would be to work with the employee to improve their performance?

Because management isn't necessarily rational?

Dilbert's pointy-haired boss resonates with a lot of office workers for a reason.

We've all had, or at least heard about, that boss who was utterly incompetent, who masked that incompetence in self-important blustering, and who were physically unable to listen to the rank-and-file.

Regulation is and should be there to deal with the abusers, and not with the companies that do, in fact, look out for the long-term welfare of both their employees and their customers.