On December 28, 2012, the Decision regarding the Modification of
Employment Contract Law (the "Decision") was passed by
the 30th session of the Standing Committee of the 11th National
People's Congress, which will be implemented from July 1, 2013.
This modification is relating to the labor dispatch part in the
Employment Contract Law, which clearly expresses the qualification
of the dispatch service providers, the administrative license for
dispatch service, the "equal pay for equal work" of the
dispatched employees and the position applying to the dispatch
The Decision mainly has the following requirements regarding the
qualifications of the dispatch service provider: (1) increasing the
registered capital requirement of the dispatch service provider
from RMB 500,000 to RMB 2,000,000; (2) requiring the dispatch
service provider to legally apply for and obtain the prior
administrative license from the competent labor administrative
bureau. The enterprise who is operating the dispatch service before
the effectiveness of the Decision shall obtain the administrative
license and apply for the change registration before June 30,
The Employment Contract Law only stipulates that the dispatched
employee shall be generally applied to the temporary, ancillary and
substitute positions without any specific definition. The Decision
further explicitly defines that labor dispatch shall be an
ancillary method of the employment and only can be applied to the
temporary, ancillary and substitute positions.
The temporary position means the position existing no more than
six months, the ancillary position means the position relating to
non-core business which provides certain services to the core
business positions; and the substitutive position means the
position can be substituted by other labor when the employee can
not perform his/her duties for certain period due to full-time
study, vacation and other reasons. The enterprise using the
dispatched employees shall strictly control the number which shall
not exceed certain ratio of the total employees (which ratio will
be regulated by the labor administrative department of State
When using the dispatched employees, we suggest pharmaceutical
companies should review relevant qualifications of the dispatch
service providers. Besides, whereas the Decision will narrow the
applicable scope of the dispatched employees, we suggest
pharmaceutical companies seek for legal advice on whether dispatch
arrangement could be used for a particular position.
You can find the Decision at
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
The festive activities of staff at employer endorsed Christmas functions should be of concern to employers.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).