China’s Draft Labour Dispatch Provisions

SUNNYVALE, Calif. - Oct. 9, 2013 - PRLog -- The Chinese government recently issued draft regulations relating to provisions of Labour Dispatch. Public comments were sought till the first week of September. This is the first time that provisions provide a clear definition of "Labour Dispatch". Labour Dispatch is defined as an employment arrangement where an employer employs and dispatches its labour to another employer and the work process of such labour is managed by the latter employer, says Nair & Co.’s International HR Services Team.

The new regulations specifically outline labour dispatching arrangements and states that they are to be applied to the following positions:

*          A back-up position that can be performed, during a specified period, by a dispatched employee in place of a permanent employee.

*          A temporary position with a duration of no more than six months.

*          An auxiliary position that continues services to maintain the employer’s core business.

In addition, the new draft provisions mandate that an entity to which dispatched employees are assigned shall provide a list of "auxiliary" positions for which such employees will be used. The list shall be prepared in consultation with the trade union or employees’ congress.

Further, the proposed regulations limit the number of dispatched employees in "auxiliary" positions to 10 per cent of the total workforce. However, this rule is not applicable to the Chinese representative offices of foreign companies.

The draft regulations are yet to be finalised. Once the regulations come into force, they would affect foreign investors with large workforces in China as it would impact the use and definition of independent contractors.

For more information about this regulation change, about doing business in China (https://ibg.nair-co.com/home/china.html) or to learn more about Nair & Co.’s International Expansion Services (http://www.nair-co.com/)  team please contact us (http://www.nair-co.com/global-offices.aspx).

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