Confusion reigns as Employment Contract Law comes into effect

The amended Employment Contract Law (中华人民共和国劳动合同法) came into force this week. Since it was first promulgated in 2008, the use of dispatch workers and agencies has soared. The main purpose of the amendments was to remove loopholes that have led to widespread abuse.

But many users of dispatch workers have been unsure how to deal with the amended Law because implementing regulations have not been released. In addition, the Ministry of Human Resources and Social Security (MOHRSS) has not released the percentage of dispatch workers a company is permitted to use.

This has left some uncertainty as to what actions companies should take to ensure they are in line with the Law. There has also been criticism from academics over the percentage, as they believe a percentage would not be necessary if the three types of labour dispatch workers allowed were clearly defined.

Workforce percentages

Article 66 of the amended Law states: “The employer of temporary workers shall strictly control the number of temporary workers and the same may not exceed a certain percentage of the total workforce. The specific percentage shall be specified by the State Council's labour administrative department.”