Meaning
Labour law regulation in China defines this legal arrangement as a bipartite mechanism where a worker holds a formal contract with a dispatched entity while performing duties for a receiving firm. A dual contract employment structure establishes a tripartite relationship involving the employee, the dispatch agency, and the actual service user. The Ministry of Human Resources and Social Security oversees these arrangements to ensure statutory protections remain binding.
Provisions within the Labour Contract Law limit such assignments to temporary, auxiliary, or substitutable positions. Jurisdiction remains complex because the legal obligations to pay social insurance reside with the agency, yet the receiving company carries liabilities for workplace safety. Liability splits between these entities to prevent gaps in statutory compliance.
Legal Status
Regulations dictate that the dispatch agency holds the status of the employer of record for tax filing and social security administration. The actual service user directs daily operations and monitors output without acting as the legal signatory on the primary employment document. Official guidance mandates that total dispatched headcount must not exceed ten percent of the overall workforce at any facility.
Auditors examine payroll records to verify that the agency manages contributions correctly because the receiving company stays accountable for any outstanding arrears if the agency defaults. Failure to maintain these proportions results in administrative penalties for the user company.
Operational Logic
Implementation of this model allows firms to scale labor requirements according to seasonal demand shifts. Human resources departments utilize these agreements for non-core functions where permanent recruitment creates excessive rigidity. Compensation packages typically originate from the agency based on the budget provided by the client organization.
Dispatched workers possess the same right to equal pay for equal work as direct hires performing identical roles. Disputes regarding overtime or wrongful termination require careful coordination between both corporate parties to resolve the grievance.
Jurisdictional Scope
Compliance rests upon the local administrative enforcement of the regional labor bureau which interprets the permissible duration of these assignments. Agreements involving foreign parties undergo rigorous scrutiny to determine if the arrangement conceals a standard labor relationship that avoids permanent headcount reporting. Regulatory authorities view excessive reliance on this structure as an attempt to bypass statutory benefits that accrue to direct staff.
Courts evaluate the nature of the supervision performed by the client to determine if a de facto employment relationship exists despite the existence of an agency intermediary. Legal finality depends on the precise alignment between the filed dispatch agreement and the actual labor deployment practice at the shop floor.
