On Legal Issues Of Economic Compensation

China’s economic compensation system is a system of protecting workers’legal rights and interests after canceling or terminating labor contracts. Inrecent years, the issue of the economic compensation system has beenconcerned by different sectors of the community,especially those employersand labor law’s scholars,the reason is that the promulgation of the "LaborContract Law" expands the payment scope of the system and improves thecompensation level. Improvement of the compensation level increases greatlycosts of employers, a wide range of payment also led that the nature and legalfunction of the economic compensation system became ambiguous,theprospect of the system is also reached an important turning point.Firstly,the nature of economic compensation system was defined in thispaper. Based on the system’s different regulations,the nature of the economiccompensation system is also significantly different.After comparing the natureof foreign economic compensation systems and analyzing the legal regulationsof our system,our system’ nature will be defined as a legal obligation,namelyeconomic compensation is that the employers perform a legal obligation aftercanceling and terminating labor contracts according to law.Secondly, the issue of the economic compensation system’ legal functionwas studied. Labor law’s scholars have been systematically studied the legalfunction of the economic compensation system,and formed three kinds oftheories: The Compensatory Theory,The Punishment Theory and The SecurityTheory.Based on these theories,our system’ legal function should follow theCompensatory Theory,namely economic compensation system is used tocompensate variety of employees’loss caused by rescission of laborrelations, the most important interest is unemployed workers’ seriouslythreatened survival interest.Finally, after the foundation of the nature and legal function of theeconomic compensation system,the paper puts forward three suggestionsabout the economic compensation system.The development goal of theeconomic compensation system should be "wide coverage, low standard".Compared with the other areas’ compensatory situations, the economic compensation system in "Labor Law"has had a broad compensation rangethat included all of situations of canceling labor contract,except employees’faults.Our economic compensation system has achieved a " broadcoverage",therefore we should abolish the regulation of paying economiccompensation after terminating the labor contracts,reducing the role oftightening labor relations.In addition, the standard that employers payeconomic compensation as the age of the employees should be established,enhancing protection of older workers; and the minimum amount of economiccompensation payment should be setted,it makes economic compensationsystem link with unemployment insurance,so that better protect underlyingworkers’ basic survival rights and interests.