A Study On The Labor Contract In Unequipollent Terms

The labor contract is a series of agreements between the workers and the capital owners through the bargaining in the labor market. From an economic point of view, the labor contract reflects the exchange of factors; from the sociological and legal point of view, it reflects the employment relationship between workers and employers. Through transferring part of labors'property rights or the right to use their labor factors, it combines the capital and the labor into a contract. The capital owners pursue the maximized profit and the workers for the maximized personal utility as well as both parties are seeking for the residual claims of production in a cooperation positive-sum game. However, as the workers are in a naturally weak position with the capital owners, they do not have the essentially ability to bargain with the employers. It is obviously that the labor contract is formally equal but substantially unequipollent bargaining results. Domestic and foreign scholars have done a lot of theoretical and empirical research on the fact that the unequipollent power relationship between employers and employees is always exist. It had been descripted as early as in Adam Smith's "Wealth of Nations", and well Carl Max had more profound analysis of this phenomenon. As he said that:"The interests between the capital and the wage labors are diametrically opposed". Property rights theory in modern economics also pointed out that the allocation of the residual claim is lean to the entrepreneurs, and it is in a strong position against to the workers. These views all reflect their interest conflicts while few scholars studied this question from the point of contract theory and discussed this issue on the view of unequipollent bargaining power. Based on the theoretical and practical importance of the problem, this dissertation attempts to achieve a breakthrough in this field.In this dissertation, we firstly review the contract theory and the study of labor relationships. After sorting and summarying the existing research results and the problems, we propose the concept of unequipollent labor contract and explain the reasons for its exist. Then the author reviews the background of China's labor market formation and the changes of its history. It is found that the factor markets reform has lagged far behind the product market during Chinese economic and social reform in last three decades, especially in the labor market reforms. And the rights of workers have been put into "public domain", which aggravates the unequipollent degree in China's labor market. Based on these observations, the author analysis the workers'bargaining and income rights, and directly points out the important significance of improving them. We believe that the essential protection for the workers is to relieve the weak position of the workers against to the capital owners in the labor market as well as reduce the unequipollence in their contracts. In the following chapters, through analysis the regulatory role of the bilateral bargaining contracts between workers and employers so as to the workers' organization, we find that the effective way to release the unequipollent status of the two parties is to enhance the workers'reserve price, authorize them organizational power and establish a collective bargaining mechanism. And the market need government and legislation intervention as the employers control over it. As public goods provider, government has the responsibility to provide an institutional guarantee for fair and justice contract in the labor market.