Dispatched labor

Dispatched labor refers to an atypical employment relationship. Dispatched work agencies receive customer ("Users enterprise") requests for workers to fulfill particular tasks. The workers have employment contracts with the Dispatched work agency, rather than the customer. By mutual consent, dispatched laborers work for and are supervised by the customer. There is no direct contract between dispatched laborers and the customer.

In labor dispatching, there are three parties: "Dispatched work agencies", "Users enterprises" and "Dispatched laborers".

History ILO 181

1920s ~ 1940s - Initial germinating stages

The earliest labor dispatching came out in London, UK before World War I, but the form of labor dispatch at that time was different from nowadays. In addition to labor dispatching, it also contained the job of private placement agencies. The initial development of labor dispatch originated from 1920s. Samuel Workman created the idea of "rented help". He hired some married women to make inventory at night and met the temporary or short-term demand of enterprises at that time.

1940s ~ 1980s - Growth stage

At this time, labor dispatching has popularized in America, Japan and all over Europe. Most of important and typical labor dispatching of America in nowadays were founded in 1946 to 1951. For example, the biggest dispatched work agency at present "Manpower" was founded in 1948.

According to the statistic of NAPEO, the growth of America labor dispatching keeps 20% per year roughly. In the late 1940s and early 1950s, Belgium, France, UK, the Netherlands, Norway and America already had the service of labor dispatching, and most of well-established dispatched work agencies were founded at that time. In Japan, labor dispatching started coming out in 1965. The employers of dispatched work agencies already hired or registered a certain amount of laborers, and dispatched them to the users enterprise to provide labor services when the enterprise had the demand. At that time, labor dispatching played matchmaker between the females, the older workers and dispatched work agencies. After 1975, due to the arising demand of many enterprises, dispatched work agencies grew rapidly.

1980s ~ 1990s - Stable stage

In 1980s, labor dispatching starting a blossoming developing in America, part of the reason lay on the highest employment rate and the lowest unemployment rate of America after World War II. The labor market of America also faced a structural change. With the rapid development and the stability of social environment, enterprises started to pursue the goal of maximum profits and minimum costs. At the same time, enterprises also started to pursue the labor force that can adopt soon to market variations. The enterprises attached more importance to the flexibility of human resource utilization. Japan made the law of labor dispatching for the first time in July, 1985. The Ministry of Labor started to formulate a chain of detailed by laws and executive orders, and entered the era of legal labor dispatching in 1, July, 1986.

1990s ~ nowadays - Rapid growth stage

According to the research, the labors of personnel supply services in 1996, almost 9 out of 10 labors were hired by the dispatched work agencies. In addition, according to the statistics of America Staffing Association, there were 90% American enterprises used the services provided from labor dispatching industry. That means the concept of labor dispatching has commonly existed in the American society. In Japan, since made the law of labor dispatching in 1985, labor dispatching has developed rapidly. After the law of labor dispatching putting in execution, there were 615 general dispatched work agencies, 3,266 specific dispatched work agencies, and 1.4 billion dispatched laborers. Until 1998, there were 3026 general dispatched work agencies, 6985 specific dispatched work agencies, and 9 billion dispatched labors. In a short span of 12 years, the population of dispatched labor has grown six times, and it still kept increasing. Especially after the law of labor dispatching of Japan has changed for the 4th time, it increased furiously. In 90s EU, labor dispatching was the fastest growing employment form in all of the atypical employment relationship. In most of the member states, the population of dispatched labor all had multiples of growth. ILO has approved the Convention Concerning Private Employment Agencies (NO. 181), there has two key point in this conventions: First, corrected the Convention Concerning Fee-Charging Employment Agencies(NO. 96). The activities of private employment agencies was not confined to placement services and job placement anymore but could be the employer to provide labors to the third party. Second, urged the international society members to attach importance on the flexibility of labor market. Because of the legislation of ILO Convention 181, it has a big progress in the development of labor dispatching.

Types of Labor Dispatch

I. Japanese mode

(1) Regularly employed type (in Worker Dispatching Act, which is called "specified worker dispatching business")：Dispatched work agencies send their regularly employed workers to users enterprises to provide labor. The labor contracts between dispatched workers and dispatched work agencies are irregular labor contracts; thus whether the period of dispatched contracts expire or not, it will not influence the labor relation between dispatched workers and dispatched work agencies. As long as the relation between dispatched workers and dispatched work agencies exists, whether dispatched workers engage in dispatched jobs or not, dispatched work agencies still have to pay wages to dispatched workers.

(2) Registration-type ( in Worker Dispatching Act, which is called "general worker dispatching business") : There is no irregular labor relation between dispatched work agencies and dispatched workers. Dispatched workers merely go to dispatched work agencies to register. Only when users enterprises ask dispatched work agencies for human resources and the demand meets dispatched workers' conditions do dispatched work agencies sign labor contracts with dispatched workers. The period of labor contracts is usually the same as dispatched contracts, so when the dispatched contracts expire, the labor contracts do, too. And dispatched workers go back to the situation of registration.

II. German mode

(1) Non-profit labor dispatched: Employees works for their employers, but at some special situations, employers lend them to the third one. Employers need employees to work for them for a long term, and they don't use employers to get profit, so they only dispatch workers to other enterprises temporarily; therefore, this kind dispatched workers' wages are better than who are in dispatched work agencies. As a result, there is no any specific law to regulate non-profit labor dispatched.

(2) Profit labor dispatched: This is the same as "regularly employed type" in Japan; however, there is no "register-type" in Germany. About profit labor dispatched, Germany passed and executed Arbeitnehmerüberlassungsgesetz in 1972, and it included detailed contents to regulate this kind of dispatched work.

Development and Current Situation

On 28 December 2012, the Standing Committee of the National People's Congress passed an amendment to the Labour Contract Law. The changes will come into force on 1 July 2013 and mainly affect labour dispatch. The Amendment increases the registration requirements for labour dispatch agencies, improves how dispatched employees are remunerated, clarifies the scope of eligible positions and assigns liabilities to host employers. Labour dispatch is highly relied upon in China to staff companies, both domestic and foreigninvested. Under a typical labour dispatch arrangement, a dispatch agency enters into an employment contract with an employee and then enters into a dispatch agreement with a host employer, pursuant to which the employee is dispatched to the host employer. Under this scheme, the dispatch agency, instead of the host employer, assumes all obligations and liabilities of an employer, such as paying social security contributions and severance for the employees. There have been debates on the use of labour dispatch because it makes it easier for employers to evade liabilities, and thus dispatched employees often have less protection than regular employees. When promulgated in 2007, the Labour Contract Law compromised on this issue by intentionally leaving certain provisions ambiguous and general. As a result, the use of labour dispatch has continued to grow even after the law was introduced. The purpose of the Amendment is to tighten the rules on labour dispatch.

References

1.Labor Situation in Japan and Analysis:Detailed exposition 2011/2012 2.Translate from: http://nccuir.lib.nccu.edu.tw/bitstream/140.119/34466/5/62027105.pdf