Guides - Human Resources & Payroll in China 2016 - 2017 (5th

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42 - Human Resources and Payroll in China 2016-2017 (5th Edition)
Contract between the Host Entity and the Dispatched Employee
The contract between the host entity and the dispatched employee is required in every labor
dispatching relationship. This contract is regulated by the PRC Contract Law rather than the PRC
Labor Contract Law. It is usually used as a supplementary document to clarify the relationship
between the host entity and the dispatched employee.
“Equal Pay for Equal Work” Principle
The InterimRegulations stipulate that the principle of“equal pay for equal work”is applied to all labor
dispatching agreements, meaning that employers should apply the same remuneration standards
for dispatched employees as they do for direct-hire employees who hold similar positions, including
overtime salaries and bonuses.
Where the employer has not hired any employee holding a similar position, the labor remunerations
payable to the dispatched employee should be determined with reference to those payable to
employees holding a similar position in the place where the employer is located.
Cross-Region Labor Dispatch
Under the Interim Regulations, if a labor dispatching entity dispatches employees to an employer
located in another region, the social insurance to be enjoyed by the dispatched employees should
be provided according to the rates and standards of the place where the employer is located.
With respect to who makes the insurance payment, if the labor dispatching entity has a branch in
the region where the employer is located, the local branch of the labor dispatching entity should
pay the social insurance for the dispatched employees; If it does not have a branch in the region,
the host entity should pay for the social insurance on behalf of the labor dispatching entity.
Termination of Labor Contract
The dispatched employee may terminate the labor contract by giving a written notification to the
labor dispatching entity 30 days in advance. During the probation period, such notification may be
given three days in advance.
The Interim Regulations stipulate that the host entity may return the dispatched staff back to the
dispatching company due to the following reasons:
• Major change in objective circumstances.
• Mass layoffs due to financial difficulties.
• The host entity is dissolved or its operation is discontinued.
• The term of dispatching contract is due.
If the dispatched employee is returned because of the above reasons, the labor dispatching entity
is responsible for redistributing the dispatched employee. The labor dispatching entity may only