In the news: Labour Dispatch Provisions, State Council approvals and a new financial supervision agency

Provisions over amended Employment Contract Law released

The Several Provisions on Placement came out on August 7 from the Ministry of Human Resources and Social Security (MOHRSS). The Draft, which is open for comments, places a 10% cap on the amount of labour dispatch workers a company can use as part of its total employee pool. The Draft also requires companies to list positions that would fall into the auxiliary category of labour dispatch workers in line with operational needs. This list will be confirmed with the labour union before being made public. Contractors are also included in the 10% ratio, so companies cannot circumvent the restrictions imposed in the Draft.

Source: MWE China

When the amended PRC Employment Contract Law (中华人民共和国劳动合同法) became effective on July 1, question marks remained over many of the changes to the Law. The Draft Provisions seek to clarify these issues. Specifically, the ratio of dispatch workers that a company could use was unclear. Many had estimated this percentage to be 30% to 40% and some voices had said that a national limit would not work as regions have different requirements. The 10% in the Draft is far below what was expected and some companies will find it hard to meet this requirement. When a formal version of the Draft is released, hopefully this number will be much higher. Clarifying auxiliary positions will be welcomed, but there is still room for loopholes, as there are no set requirements other than a list being approved by the union.

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