As a special employment method, labor dispatch employment is conducive to integrating labor market information, promoting labor division and specialization in the labor market, especially helping to meet the temporary employment needs of some employing units in a more timely and convenient manner. The labor dispatch relationship is different from the labor relationship directly established between the employee and the employer, and the legal relationship of labor dispatch involves three parties, namely the employee, the labor dispatch agency and the employing entity, resulting in a three-fold legal relationship. Regarding the determination of labor dispatch relationships, this issue of the small editor has compiled relevant adjudication rules, expert views, laws and regulations around this topic for readers' reference.
Rules of adjudication
1. Labor dispatch personnel who have been engaged in the main business for a long time have a labor relationship with the employing unit - Chen v. Jiangsu B Juice Company confirmed labor relationship dispute
【Essence of the case】The employee is a labor dispatch worker who has been engaged in the main business for a long time, and the employer evades the statutory responsibility through labor dispatch, harming the legitimate rights and interests of the employee, and it should be determined that there is a labor relationship between the employee and the employer.
Source: People's Court Daily, January 21, 2021, 7th edition
2. The employer shall not use false labor dispatch to avoid the main liability - Liang v. An Automobile Company Labor Dispute Case
【Case Summary】The employer's act of evading the subject's liability through false labor dispatch violates the principle of good faith and infringes the legitimate rights and interests of employees. The people's court shall conduct a review and determination based on the substantive legal relationship between the two parties, and order the actual employer to bear the corresponding subject liability.
Source: Top 10 Typical Cases of Labor Disputes in Guangdong Courts
3. The obvious sign that distinguishes labor dispatch from labor outsourcing is the difference in the subject of management control over labor and production processes-Cheng Moumou v. Liu Moumou, Shanghai KDL Enterprise Development Group Co., Ltd. and Shanghai Jiyoujing Property Management Co., Ltd. over right to health
【Case Summary】The obvious sign that distinguishes between labor dispatch and labor outsourcing is that the subject of management control over labor and production process is different; In labor dispatch, although the employing unit does not establish a labor relationship with the laborer, it actually exercises management control over the employee, and in the labor outsourcing, the employing entity not only does not establish a labor relationship with the employee, but also does not participate in the management and control of the laborer.
Trial court: Shanghai No. 2 Intermediate People's Court
Source: Shanghai No. 2 Intermediate People's Court Network
4. The fact that the employing unit shall not use the name of labor outsourcing to carry out labor dispatch - Huang v. A company in Suzhou and a company in Nanjing over labor contract disputes
【Case Summary】Employers can reduce labor costs and improve work efficiency through business outsourcing and other means, but they must not practice "labor dispatch" in the name of "labor outsourcing", exclude their own legal responsibilities, and infringe on the legitimate rights and interests of employees.
Court of Trial: Nanjing Intermediate People's Court of Jiangsu Province
Source: Top 10 Typical Cases of Labor Disputes in Jiangsu Courts in 2019
5. If a service outsourcing company pays wages to the employee and provides certain working conditions, it should be deemed that the worker is a dispatched worker and there is an employment relationship between the two parties--Zhang v. a service outsourcing company confirming a labor relationship dispute
【Essence of the case】The content of the contract signed between the service outsourcing company and the employment platform is essentially similar to a labor dispatch agreement, the service outsourcing company pays wages to the employee and provides certain working conditions, and the employee shall be deemed to be the dispatched worker, the service outsourcing company shall be the employer, and the two parties shall establish a labor relationship.
Trial court: Wuzhong District People's Court of Suzhou City, Jiangsu Province (formerly Wu County Municipal Court)
Source: Jiangsu Court Network June 17, 2021
6. The dispatching unit recruits the worker and dispatches it to the employing unit, and there is a subordinate management and managed relationship between the dispatching unit and the employee, and the labor relationship is established-Wang Moumou v. Bortala Mongolian Autonomous Prefecture Zhengtong Security Service Co., Ltd. confirmed labor relationship dispute
【Case Summary】An employer with the qualification of labor dispatch entity recruits workers and dispatches them to work in the employing unit, the dispatching unit pays remuneration to the employee, the employee works for the employing entity, and there is a subordinate management and managed relationship between the dispatching entity and the employee, and a labor relationship is established.
Case No.: (2022) Xinmin Zai No. 86
Court of trial: Higher People's Court of Xinjiang Uygur Autonomous Region
Source: AFSHIN Selection
Judicial point of view
I. General circumstances for determining the legal relationship of labor dispatch
1. Form requirements: The legal relationship of labor dispatch involves three parties.
The legal relationship of labor dispatch involves three parties in terms of formal requirements, namely the employee, the labor dispatch service provider and the employing entity. This leads to a threefold legal relationship: first, the labor contract relationship between the labor dispatch service provider and the employee, and the two parties form an agreement to conclude the labor contract; The second is the civil contractual relationship between the labor dispatch service provider and the employing entity, in which the two parties form an agreement to conclude a labor dispatch agreement, and the labor dispatch agency dispatches the worker to work in the employing entity; Third, the relationship between the worker and the employing unit is the actual employment relationship, the worker provides labor services to the employing unit, and the employing unit directs and supervises the laborer.
2. Substantive requirements: separation of employment and use of labor.
Ordinary labor relationship is when an employee provides labor to an employer and accepts the supervision of the employer to obtain labor remuneration. However, in the legal relationship of labor dispatch, the employee is employed by the labor dispatch agency but provides labor to the employing entity. The separation of employment and use of labor is the essential feature that distinguishes the legal relationship of labor dispatch from other legal relationships.
(Excerpted from Huang Xiangqing, editor: "Essence of Adjudication Methods for Similar Cases (First Series)", People's Court Press, 2020 edition, pp. 163~164.) ）
Second, the difference between labor outsourcing and labor dispatch
Labor outsourcing and labor dispatch are two completely different employment models. Substantial differences between the two:
1. The nature of the service is different.
For employers, labor dispatch companies provide dispatch workers; Labor outsourcing, on the other hand, provides all labor services for a relatively independent project.
2. The nature of the contract is different.
Labor dispatch is a labor dispatch contract, labor outsourcing is a labor outsourcing contract, and the nature of the service is completely different depending on the nature of the agreement. In the labor dispatch agreement, the employer settles the fee based on the number of dispatched workers provided by the dispatching company, and the settlement method is "the number of workers multiplied by the unit price". In the labor outsourcing agreement, the contracting unit settles the fee according to the workload completed by the contractor, and the settlement method is "the number of work multiplied by the unit price".
3. The legal relationship formed is different.
In labor dispatch, labor dispatch agencies, employing units and workers are involved, labor dispatch agencies and employing entities constitute labor lease contract relationships, labor dispatch agencies and workers constitute labor contract relationships, and employers and workers constitute employment management contract relationships. In labor outsourcing, it involves the employing unit, the outsourcing unit and the laborer, among which, the employment unit and the outsourcing unit constitute an entrustment contract relationship, and the outsourcing unit and the employee constitute a labor contract relationship, but the employer and the employee do not constitute any direct legal relationship, and there is no employment management contract relationship similar to that in labor dispatch.
4. The service principals are different.
A labor dispatch service provider must be a legal entity established in strict accordance with the relevant provisions of the Labor Contract Law and the Company Law, with a registered capital of not less than RMB 500,0001. The contractor in labor outsourcing can be a legal person or other entity, or an individual (it is not recommended to award contracts to individuals, in practice, personal outsourcing is often judged as an employment relationship).
5. In the labor dispatch contract, the employing unit requires the labor dispatch company to sign a labor contract with the employee.
In the dispatch agreement, in accordance with the requirements of the Labor Contract Law, the number of dispatched posts and personnel, the period of dispatch, the amount and payment method of labor remuneration and social insurance premiums, and the liability for violation of the agreement shall be stipulated, and it is specified that the labor dispatch service provider shall inform the dispatched workers of the content of the labor dispatch agreement.
6. The assumption of employment risks is different.
In labor outsourcing, the employment risk of the contractor hiring workers has nothing to do with the contractor, and the issuer and the contractor bear their own employment risks, and their respective employment risks are completely isolated; As a labor employment method, the employing entity is one of the parties in the tripartite legal relationship of labor dispatch and needs to bear certain employment risks, for example, if the labor dispatch agency illegally causes damage to the dispatched workers, the employing entity and the labor dispatch agency shall bear joint and several compensation.
7. Business qualification requirements are different.
Contractors in labor outsourcing generally do not have special business qualification requirements, unless there are special laws; The labor dispatch service provider must be a legal entity established in strict accordance with the provisions of the Labor Contract Law and licensed by labor dispatch administration.
8. Applicable law is different.
In the labor dispatch, if the employee suffers damage, the employing unit shall be liable for compensation in accordance with the Labor Contract Law. Article 2 of the Contract Law applies between the employing unit and the outsourcing unit in labor outsourcing, and the rights and obligations are assumed according to the entrustment contract between the two parties, and the employing unit is not liable to the employee. If the employee infringes against a third party, the provisions of Article 34, Paragraph 1 of the Tort Liability Law apply, and the outsourcing unit shall bear the tort liability against the third party as the employer. In the case of labor dispatch, if the employee suffers damage, the employing unit shall bear the liability for compensation in accordance with the Labor Contract Law, and if the employee infringes on a third party due to the performance of duties, the employing unit shall bear joint and several compensation with the employee according to the degree of fault.
(Excerpted from Yan Qianxian, ed.: Reference for the Trial of Labor Dispute Cases, People's Court Press, 2018 edition, pp. 310~311)
Notes:1. Editor's note: According to Article 57 of the Employment Contract Law (amended in 2012), this should be 2 million yuan.
2. Editor's note: The Contract Law has been abolished and the Civil Code shall apply here.
3. Editor's note: The Tort Liability Law has been abolished, and paragraph 1 of Article 1191 of the Civil Code shall apply here.
Legal Provisions
1. Employment Contract Law of the People's Republic of China (Amended in 2012)
Article 58 [Rights and Obligations of Labor Dispatch Service Providers, Employing Units and Workers] A labor dispatch service provider is an employer as referred to in this Law and shall perform the obligations of the employer to the workers. In addition to the matters specified in Article 17 of this Law, the labor contract concluded between a labor dispatch service provider and a dispatched worker shall also specify the employing unit of the dispatched worker, as well as the period of dispatch and the position of the dispatched worker.
The labor dispatch service provider shall conclude a fixed-term labor contract with the dispatched worker for more than two years, and pay labor remuneration on a monthly basis; During the period when the dispatched worker is not working, the labor dispatch service provider shall pay him monthly remuneration in accordance with the minimum wage standard stipulated by the local people's government.
Article 59 【Labor Dispatch Agreement】A labor dispatch service provider shall conclude a labor dispatch agreement with the entity that accepts the employment in the form of labor dispatch (hereinafter referred to as the employing entity). The labor dispatch agreement shall stipulate the number of posts and personnel to be dispatched, the duration of the dispatch, the amount and method of payment of labor remuneration and social insurance premiums, and the liability for violation of the agreement.
The employing entity shall determine the dispatch period with the labor dispatch service provider according to the actual needs of the post, and shall not divide the continuous employment period into several short-term labor dispatch agreements.
Article 66 【Applicable Positions of Labor Dispatch】Labor contract employment is the basic form of employment of enterprises in mainland China. Labor dispatch is a supplementary form and can only be carried out in temporary, auxiliary or substitute positions.
The temporary jobs provided for in the preceding paragraph refer to posts that last for less than six months; Auxiliary jobs refer to non-main business positions that provide services to the main business positions; Substitute jobs refer to positions in which other workers can be replaced by other workers for a certain period of time when the employees of the employing unit are unable to work due to reasons such as off-the-job study, vacation, etc.
The employing unit shall strictly control the number of labor dispatch employees, which shall not exceed a certain proportion of its total employment, and the specific proportion shall be stipulated by the labor administrative department under the State Council.
Article 67 [Employers shall not set up their own labor dispatch units] Employers shall not set up labor dispatch units to dispatch workers to their own units or their affiliated units.
2. Regulations for the Implementation of the Labor Contract Law of the People's Republic of China
Article 28 A labor dispatch service provider funded or established by a partnership by an employer or its subordinate unit that dispatches workers to its own unit or its affiliated unit shall be a labor dispatch service provider that must not be established as provided for in Article 67 of the Labor Contract Law.
Article 29 The employing entity shall perform the obligations stipulated in Article 62 of the Labor Contract Law and safeguard the lawful rights and interests of the dispatched workers.
Article 30 Labor dispatch service providers shall not employ dispatched workers in the form of part-time employment.
3. Interim Provisions on Labor Dispatch
Article 27 Where an employer uses workers in the form of labor dispatch in the name of contracting, outsourcing, etc., it shall be handled in accordance with these Provisions.
Source: AFSN Issue 2615