The Current Dilemma Of The Labor Dispatch System In China And Its Reform

As a product of the market economy, the labor dispatch system has the characteristics of flexibility and convenience. It can offset the inadequacy of the traditional recruitment methods in a certain extent, and plays a unique role in relieving the dilemma of enterprise recruitment and promoting employment. With the implementation of reform and opening-up policy, it has been more than30years since the labor dispatch system formally was introduced into China, the path of change in China has experienced two stages-the induced change and mandatory change. The Labor Contract Law was implemented in2008, the legal status of labor dispatching had been formally confirmed in our country, this also become the symbol of labor dispatching system from the induced change transformed into mandatory change in our country. Labor dispatching system is mainly decided by negotiation and consultation between the systems of subjects during the induced change phase, but the management owns the absolute initiative. The supply of system mainly been done by the government during the mandatory change phase, the government provide formal labor dispatch system under the premise of balancing the interests of all parties. The purpose of formulating and implementing the Labor Contract Law is to further standardize the order of labor market in our country, and protect the legitimate interests of the labor dispatching workers, but the result is counterproductive, the implementation of the law making these pre-existing problems are further deteriorated. They mainly include the system’s body, the definition of property rights is not clear, the high transaction costs, the abusing of the system, the difficulty to maintain the rights and interests of labor dispatching workers, and so on. The current dilemma of labor dispatch system in China is not only reflected in a variety of outstanding problems, and most importantly, these problems have been around for long time, but still can’t get effective solution.Currently, the research of dispatch is on the level of legal and Sociology, most of them pointed the disadvantages of the legal system and proposed the measures to improve the dispatch. This paper analyses the deep reasons which making current dilemma based on the theory of institutional change, and put forward feasible Suggestions for the reform of the existing labor dispatching system in China under the guidance of theory of institutional innovation.Compared with foreign countries (mainly western developed countries), the subject qualification of labor dispatch system in China is not clear. The legal relationship between different subjects is not clear, the scope operation of main body is also not limited, the legitimate rights and interests of labor dispatch workers are in the lack of adequate protection. On the surface, this is due to different formal systems (mainly including the political system and economic system) and the informal systems between our country and abroad.But from a deeper perspective, labor dispatch system in our country has experienced decades of change and has gradually formed the current situation, this is mainly due to the political structure in our country, interest groups, formal system, informal system driven path dependence, as well as,the technical innovation and learning promoting the change in the specific direction. In addition, the time-lag of cognizing and organization, invention and design of the system subject and the choice of menu and startup time delay caused the time-lag of labor dispatch system changes, and then delayed the solution of the issues. The fundamental reason of causing the current dilemma of labor dispatch system in China is the unclearness of the property rights’ definition, especially the allocation of residual control right and residual ownership is vague, this results in fierce competition.In order to reform the current labor dispatching system and set up a new system which can represent the benefit of all citizens and long-term interests of our country, the government which is the biggest demanders and suppliers of the system must organize exclusively institutional innovation. The government also needs to take overall planning, coordinate the contradiction between the interests of the masses and the interests of individual citizen, short-term interests and long-term interests as well. Based on the current situation of our country, this article takes the perspective of clearing property right, reducing transaction costs, reconstructing organization system, improving informal institution, and proposes suggestions at the end. By doing this, we hope that the Labor Dispatch System could be out of trouble soon.