It is legal to work for an “agency” if you teach at a school?

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Working for an agency that dispatches teachers to work in schools is a common practice in some cities in China. However, the legality of this practice is questionable, at best, and all foreigners should avoid labor dispatch relationships.

The interconnection of several elements of the law makes labor dispatch legally problematic for foreign workers in the education sector. First, dispatch relationships are only allowed for temporary, auxiliary or substitute positions. Temporary positions must be for no longer than six months; auxiliary positions must not be for the main business of the receiving entity, and substitute positions are those where the dispatched worker is temporarily taking the place of a regular (i.e. not dispatched) worker at the receiving entity (Interim Provisions on Labor Dispatch 3). Second, dispatching entities must also sign a fixed term labor contract of at least two years in duration with the dispatched worker (Interim Provisions on Labor Dispatch 5). Third, foreign workers must have a clearly defined employer (RAEFC 7). Fourth, a foreign worker’s employer must be the same as that specified on that worker’s work permit (WP) (RAEFC 23). Fifth, for a foreign worker to establish a legal labor relationship, that foreign worker must have a WP (Interpretation (I) of the Supreme People's Court 33). Sixth, working outside the scope of one’s WP is unlawful employment (EEAL 43.2).

There are two basic scenarios when a foreign educator is hired by a labor dispatch company and dispatched to work in a school. In one scenario, the employer shown on the WP is the school, and in the other the employer shown on the WP is the dispatching entity. Of course, there are other permutations involving a third entity being on the WP or there being no WP, but the former is covered by the discussion of the two basic scenarios as well as point six above, and the latter is simply unlawful employment (EEAL 41; RAEFC 8).

In the scenario where the school is shown as the employer on the WP, there is, or can be a legal labor relationship with the school, but there is no labor relationship with the dispatching entity, the agency (RAEFC 7, 23; Interpretation (I) of the Supreme People's Court 33). Since there is no legal labor relationship between the agency and the worker, the agency has no right to manage, discipline, or arrange anything to do with the worker’s work, as those activities are the hallmarks of a labor relationship. Also, if the worker had signed a labor contract with the agency, as required by law (Interim Provisions on Labor Dispatch 5), that contract would not be a valid labor contract and would not form a legal labor relationship (Interpretation (I) of the Supreme People's Court 33). In this scenario, if there has been no written labor contract signed between the worker and the school, then the school will have a large potential legal liability to pay the worker double wages for each month after the first month of employment (LCL 82).

In the scenario where the agency is shown as the employer on the WP, then the requirements for the worker to have signed a written labor contract of at least two years in duration with the dispatching entity (Interim Provisions on Labor Dispatch 5) could have been fulfilled. But, the requirement that the worker have a clearly defined employer, and that that employer be the same as the employer specified on the WP would be violated, as would the prohibition on working outside the scope of the WP (RAEFC 7, 23; EEAL 43.2) since the actual place of work is not the agency but the school.

There are a few other minor points worth mentioning. One, if the agency has not signed a labor contract with the worker, then the agency cannot act as a dispatching entity (Interim Provisions on Labor Dispatch 5). The labor relationship for dispatched workers is supposed to be with the dispatching entity, that is the point of the requirement to sign the labor contract with the dispatching entity, and the point of the whole dispatch arrangement. But if the dispatching entity has signed a labor contract with a foreign worker, then the contract would be void, unless the WP is also with the dispatching entity (Interpretation (I) of the Supreme People's Court 33). And if the WP is with the dispatching entity, then the worker cannot legally work at the school (EEAL 43.2).

Two, most foreign workers in education are teachers, and they are dispatched to schools thus those positions are not auxiliary. If the teaching position is for more than six months, then the position would also not be temporary. And since the positions are usually not temporarily replacing another regular (i.e. not dispatched) worker, in almost all cases the teaching positions which foreign workers are dispatched to fill are not substitute. Thus dispatching worker to these sorts of positions is a violation of the Interim Provisions on Labor Dispatch (3).

The question then turns to why labor dispatch for foreigners in the education sector still exists. The first, and most likely, explanation is that administrative agencies operate in their own silos, and so do not put together the disparate elements needed to form the whole picture described above. Second, there is no one positioned such as to understand the problem and have both the resources and motivation to pursue it. Most foreigners working in labor dispatch will be unaware of the legal issues described above (as will most Chinese including officials in administrative bodies and those working at schools or for agencies). And even if they are, say, after having read this article, they will only be in a position to extricate themselves from the situation through arbitration and court cases. Those single cases, however, will not solve the structural tunnel vision in the administrative bodies that would need to be overcome for this issue to be addressed systematically.

There are also several possible work arounds that might solve these issues in practice for the dispatch entities. These companies could, in theory, operate in other capacities that look somewhat like dispatch but are not. They could perform HR functions for many schools, and in that capacity facilitate shifting of workers between employers in their network who share the same pseudo-dispatch entity as an HR services provider. They might also act as recruiters and have a non-labor contract with foreign workers in which the foreign worker pays fees to the pseudo-dispatch entity for services of some type. And these two functions could even potentially be combined. But none of those would strictly be labor dispatch.

The takeaway for foreign workers is twofold. One, do not get involved with agencies that act in any labor dispatch like capacity. There is no inherent structural problem with companies that provide job introduction, often called head hunters or recruiters. As long as those companies have proper licenses and act in good faith, they can provided valuable services for workers and employers alike. Two, take the time to understand what the legalities of your work situation are. Read your contract BEFORE you sign it and do not sign it if you feel it is unfair, suspicious, or not with the actual employer. (If you need labor contract review that is a service that Reliant provides.) Apply this skeptical eye to all paperwork needed for your employment. Get and keep originals of all documents signed and used in your WP and residence permit for work (RPw) application processes. If you absolutely cannot keep a stamped and signed original document (remember you and the employer can always sign and stamp more than one copy of any document thereby creating more than one original) then get a clear color scan. Ask for a copy of your employer’s business license, your employer has copies of your documents after all. Make sure you keep your WP card. Get and keep clear records of your pay, etc. Most of these recommendations go for all foreign workers, but they are all the more important in making sure you avoid any complex and consternation causing conundrum with a labor dispatch agency.

References

(1) Interim Provisions on Labor Dispatch

劳务派遣暂行规定

http://www.gov.cn/gongbao/content/2014/content_2667613.htm

(2) RAEFC

Rules for the Administration of Employment of Foreigners in China

(translation does not incorporate revisions of 2017 thus numbering is off after article 13)

http://english.www.gov.cn/services/work_in_china/2018/08/02/content_281476245886934.htm

外国人在中国就业管理规定

http://www.mohrss.gov.cn/SYrlzyhshbzb/zcfg/flfg/gz/201704/t20170413_269433.html

(3) Interpretation (I) of the Supreme People's Court

The Interpretation (I) of the Supreme People's Court of Issues Concerning the Application of Law in the Trial of Labor Dispute Cases

No. 26 [2020] Supreme People's Court.

最高人民法院关于审理劳动争议案件适用法律问题的解释（一）

http://www.court.gov.cn/fabu-xiangqing-282121.html

(4) EEAL

Entry Exit Administration Law

http://english.www.gov.cn/archive/laws_regulations/2014/09/22/content_281474988553532.htm

中华人民共和国出境入境管理法

http://www.gov.cn/flfg/2012-06/30/content_2174944.htm

(5) LCL

Labor Contract Law of the People’s Republic of China

(ironically not the 2013 revision much of the content of which dealt with labor dispatch)

http://english.www.gov.cn/archive/laws_regulations/2014/08/23/content_281474983042501.htm

中华人民共和国劳动合同法

http://www.mohrss.gov.cn/SYrlzyhshbzb/zcfg/flfg/fl/201605/t20160509_239643.html

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