![]() This option allows them to avoid concerns regarding severance pay and the early termination of employees. Labor dispatch allows companies to scale up or down their production force as the demands of their business change. This is particularly beneficial for seasonal businesses or who have primarily project-based work. Labor dispatch is ideal for temporary workers who will be working on a project for a limited amount of time. Some of the impressive benefits that are available through labor dispatch include: Labor dispatch has long been a popular option in China to hire domestic employees. The ILO reports that the rapid increase of the number of employment agencies was in response to the large-scale downsizing in the state sector, the continuous inflow of rural migrant workers to urban areas to seek employment and the growing number of unemployed school leavers and college graduates. The local governments started to suspect the agencies were violated labor rights to provide services at the lower end of labour market costs.Īs of 2001, 70% of the employment agencies were funded by the local governments at various levels as part of the multi-level employment services network. In the 80s and 90s, the number of employment agencies grew exponentially and started to change depending on the industry and region. This was done at first to make it easy for foreign firms to hire staff in China and to help unemployed youth to find jobs. The Employment AgenciesĪccording to the ILO’s Conditions of Work and Employment 64th issue, in China, employment agencies (initially known as labour service companies) first emerged in the late 1970s following the aperture of the Chinese economy. Since the implementation of the Labour Contract Law in 2008, the increasing use of dispatched labour has become a controversial issue in China. When said workers are no longer needed by the end users, they can swiftly return to their recruitment agencies. Because of this, Dispatched workers are usually paid less than contract workers even though they are doing the same tasks. ![]() The new modus operandi is for private employment agencies to recruit workers and send them as temporary employees to factories according to the factories requirements. The figure also describes a loophole that lacks both labor inspection and social protection which is commonly used in China.Įmployers are constantly trying to get around the regulations of the comprehensive labor protection measures that accompany the implementation of the Labour Contract Law and its amendments regarding labor dispatch. The figure above shows what is commonly referred to as the triangular relationship between the agencies, workers and the user Enterprises that exists in labor dispatch structures. #Dispatch definition series#Even though the dispatched workers are working for the user enterprise, due to the fact that there is no direct contract between them and the former, the user enterprise is protected from a series of liabilities. ![]() The workers sign employment contracts with the Dispatched work agency, rather their ultimate employer (that is, the enterprise they will be working for – de facto-).Ĭonsequently, these dispatched laborers work for and are supervised by the end user/ client/user enterprise. ![]() Labor dispatching involves three parties, commonly known as This form of atypical employment is extremely popular in China and is used by both foreign and national entities to manage and supply their workforce demands. According to the International Labor Organization ( ILO), the term “labor dispatch” refers to the practice of hiring employees through an employment service agency as opposed to the traditional legal labor relationship referred to as direct employment. ![]()
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