Not saying your friend is mistaken, but I can't see them allocating funds that will be in a 'Risk Pot' to other things. In business you have to have these contingencies in place, otherwise when they happen it impacts you hughly. That is why we have car and house insurance.
I do agree though that it would be nice if we didn't have to keep chucking around these paydays. If I don't perform and the company want rid, as long as they follow the Employment act, I am out the door WITHOUT a pay day, and so are most of you. Money we could, as suggested above, be put to better use.