Abstract:
Abstract: China’s Labor Contract Law (“LCL”) came into force on January 1,
2008. The first major piece of labor legislation since the 1994 Labor Law, the Labor
Contract Law expanded legal protection for workers by mandating that labor contracts be
in writing and delivered to all workers. Employers, predicting that the law would
effectively raise the cost of employing full-time, long-term workers, sought methods of
“creative compliance” with the law. One avenue for creative compliance emerged
through the loophole in the LCL for so-called “dispatch workers.” Dispatch workers are
formally employed by third-party dispatch service agencies and thus not covered by
employment contracts with the firms where they perform their job (“accepting entities”).
In the first five years following the LCL’s enactment, dispatch workers grew from a
negligible share of China’s labor force into a pervasive phenomenon. The dispatch
worker exception began to swallow the rule, eroding the intended labor protections of the
LCL. In response, the Standing Committee of the National People’s Congress amended
the LCL, effective July 1, 2013. These amendments drastically reduced the permissible
scale and purpose of dispatch labor and augured tighter regulation for the dispatch
industry. Following a period of public comment, the Ministry of Human Resources and
Social Services provided specific departmental rules regarding the licensing of dispatch
agencies and standard industry-wide practices, effective March 1, 2014. The new
regulations restricted enterprises from hiring more than ten percent of their workers as
dispatch workers and clarified the obligations of dispatching agencies as employers.
With reports of abuse of dispatch workers continuing to surface, the effects of the
amendments and the provisions on labor remain unclear.
This comment addresses China’s effort to intervene in employment arrangements
via legislation. It first surveys the background of labor legislation in China from the Mao
era, through reform, and into the twenty-first century. It then examines the interaction of
the labor market and labor legislation, as employers respond to changes in China’s labor
regime through the introduction of Amendments to the LCL. Finally, this comment
suggests that reform in labor legislation based on individual contract should be secondary
to expanding collective labor rights.
Description:
Washington International Law Journal, Volume 24, Number 1, January 2015