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terminate the employee’s contract if the employee refuses a new dispatch offering equal or greater
conditions.
For more details, please refer to the later chapter on termination.
2.3 Outsourcing
Outsourcing is an additional option for FIEs. Generally, the most commonly outsourced tasks are
those that require specialist skills, a high degree of confidentiality, or those that have a clear scope but
incur major consequences if incorrectly implemented. Good examples in China include accounting,
tax filing, HR administration and payroll processing work. Many small andmedium-sized companies
will choose to completely outsource some or all of these functions, whereas large companies will
set up a separate entity to manage such back-office tasks on behalf of their regional subsidiaries.
An outsourcing contract is fundamentally different from a dispatching contract in several ways,
including:
• Responsibility for the behavior of the outsourced employee is borne by the company contracted
for the outsourcing.
• The role is often not a full-time one, and most of the work does not have to be completed on-site.
Working off-site improves the level of confidentiality. As the company does not need to hire a
full-time internal resource for the role, outsourcing can often be a money-saving solution.
• The outsourcing company retains the right to use whichever resources it feels are best for each
project. This ensures continuity in service provision.
• Such tasks will often use special software licensed by the company contracted for the outsourcing.
The company requesting the services does not need to pay for software licenses or development
work.