I love/cry about this.
What you describe sounds so much worse than the basic protections one would expect in EU employment law.
In the UK, once an employee has two years under their belt, they can only be fired for one of 5 reasons. Conduct, Incapacity, Redundancy, because it’s required by law, or the wonderful catch-all “some other substantial reason”.
Even if you have those grounds, you still have to give notice unless the reason for the dismissal is sufficiently serious to warrant no notice. So punching your boss in the face in front of several witnesses might be justify a ‘gross misconduct’ dismissal, but your boss simply deciding that ‘you’re not up to the job’ wouldn’t.
There is a requirement to have a fair and reasonable process for making decisions about whether to dismiss someone and for example if the reason is inability to do the job, the employer would be expected to make some fairly hefty efforts to help the employee get up to speed instead of simply sacking them - which seems fair enough given that this would only apply to an employee who has been working (apparently satisfactorily) for at least two years.
As you say the temptation is then, of course, not to let employees get those two years. And that does happen.
Amusingly, that period was relatively recently extended back up from one year because politicians and employers argued that one year wasn’t long enough to know whether a new employee was working out. Really? How bad are you at managing your business if you can’t tell within a year?
There is also a bunch of stuff that does not need two years employment to allow an employee to make a claim - sacking someone for discriminatory reasons, like say “She got pregnant”, “looked a bit muslim”, “he’s just so old…”, “wanted to join a union”, etc.
But trying to argue that someone who has worked for you for 6 years on repeatedly renewed one-year contracts is not entitled to the same rights as a permanent employee just because they had fixed term contracts wouldn’t get you far.
Employers are not allowed to discriminate between fixed-term and permanent staff doing the same job. If a fixed term contract comes to an end after two years, the employee is entitled to redundancy pay and if the arrangement continues for more than 4 years, the employee is probably going to automatically become a permanent employee.
We have that too but at least here, the money promised for not suing and keeping stumm is usually on top of the severance pay.
I’m particularly interested in how these things work in the US (and Canada) given that once we leave the EU, the chances are we’re going to get a lot of pressure to get rid of all these pesky protections and enter into the same sort of arrangements you have other there.
We’ve had years of lobbying to that effect already, most of which was only held back by the governments of the day being able to say “We can’t do this because of EU law. We’d love to help you Mr Big Business but our hands are tied. If only…”
Well, now ‘if only’ is here. 
