The Failure of Labor Dispatch Regulation and Its Remedy

In the course of the drafting, enactment and amendment of the Labor Contract Law of the People’s Republic of China, the legal provisions regulating labor dispatch have been tightened up. In practice, however, the labor dispatch system is flourishing in a way that defies market trends. The ultimate reason for this is that much of the system goes under the name of human resource outsourcing to bamboozle the public and evade the law, in effect making the legal provisions a dead letter. The result is that the more the industry is regulated, the more it multiplies and the more chaotic it becomes. Based on comparative law research methodology, this article reviews the legal systems relating to labor dispatch in Germany, the US and other countries. It demonstrates and affirms the institutional value of the labor dispatch system, and categorizes its different types. The fundamental cause of the phenomenon of labor dispatch’s assumption of the guise of human resource outsourcing is the absence of substantive review. We suggest introducing and perfecting such investigation to stem the industry’s deep-seated abuses.