Dispatched labor

Last updated

Dispatched labor refers to an atypical employment relationship. Dispatch work agencies receive requests from businesses to have them hire and manage labor on the business' behalf. This type of labor is known as "dispatched labor". There is in fact no direct contract between dispatched laborers and the enterprise which uses the agency's services, so in this way, dispatched employment follows a triangle structure. As dispatch agencies are often highly adept in hiring and managing workforces, businesses are more than happy to use an agency to manage part of their workforce as it saves time, money, and if you are a foreign enterprise, the hassle of quickly understanding the legal workings of a local labor force. [1]

Contents

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 the 1920s. Samuel Workman created the idea of "rented help". Samuel hired began by hiring married women to make inventory at night in order to meet temporary or short-term demand of enterprises at that time. [2]

1940s ~ 1980s - Growth stage

At this time, labor dispatching was popularized in America, Japan and all over Europe. The most important and common labor dispatching in America was founded in 1946 to 1951. For example, the biggest dispatched work agency at present, Manpower, was founded in 1948.

According to statistics from NAPEO, the growth of labor dispatching in the US keeps to roughly 20% per year. In the late 1940s and early 1950s, Belgium, France, UK, the Netherlands, Norway and America already had the service of labor dispatching, and most well-established dispatched work agencies were founded at during this period. In Japan, labor dispatching emerged in 1965. 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 was in demand. At that time, labor dispatching played as matchmaker between females, older workers and dispatched work agencies. After 1975, due to the rising demand of many enterprises, dispatched work agencies grew rapidly.

1980s ~ 1990s - Stable stage

In 1980s, labor dispatching starting blossoming and developing in America, partly due to a high post-war employment rate. 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 a labor force that can adopt quickly to market variations. 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 bylaws and executive orders, and entered the era of legal labor dispatching in 1, July, 1986.

1990s ~ nowadays - Rapid growth stage

According to the labors of personnel supply services research conducted in 1996, almost 9 out of 10 laborers were hired by dispatched work agencies. In addition, according to the statistics of America Staffing Association, 90% of American enterprises used the services provided from labor dispatching industry. This illustrated how ingrained the concept of labor dispatching had become in American society. In Japan, since making the law of labor dispatching in 1985, labor dispatching developed rapidly, leading to the development of 615 general dispatched work agencies, 3,266 specific dispatched work agencies, and 1.4 billion dispatched laborers.

As of 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 in Japan changed for the 4th time. In the 90s, EU labor dispatching was the fastest growing employment form in all of the atypical employment networks. Among most member states, the population of dispatched labor forces multiplied in growth. The ILO went on to approve the Convention Concerning Private Employment Agencies (NO. 181), which had two key corrections: First, corrected the Convention Concerning Fee-Charging Employment Agencies(NO. 96). The activities of private employment agencies were not confined to placement services and job placement anymore but the employer could provide laborers to third parties. Second, urged the international society members to attach importance on the flexibility of labor market. Because of the legislation of ILO Convention 181, it spurred big progress in the development of labor dispatching.

Dispatched Labor by Country

Japan

Regularly Employed

Dispatched work agencies send their regular employed workers to client 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 relationship 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.

Registered

There is no irregular labor relationship between dispatched work agencies and dispatched workers. Dispatched workers merely go to dispatched work agencies to register. Only when client 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 a labor contract is usually the same as with dispatched contracts, so when the dispatched contracts expire, the labor contracts do, too. Dispatched workers will go back to the status of registered.

Germany

(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. [3]

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 in China. The changes have come into force from 1st July 2013 and mainly found to affect the machinery of 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 foreign invested. 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. [4] [5]

There have been debates and criticism on the usage of labour dispatch because of its tendency to make it easier for employers to evade liabilities, and thus dispatched employees often have less protection than the 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. [6]

See also

Related Research Articles

Labour laws, labour code or employment laws are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, employer, and union.

Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any other entity, pays the other, the employee, in return for carrying out assigned work. Employees work in return for wages, which can be paid on the basis of an hourly rate, by piecework or an annual salary, depending on the type of work an employee does, the prevailing conditions of the sector and the bargaining power between the parties. Employees in some sectors may receive gratuities, bonus payments or stock options. In some types of employment, employees may receive benefits in addition to payment. Benefits may include health insurance, housing, and disability insurance. Employment is typically governed by employment laws, organisation or legal contracts.

<span class="mw-page-title-main">Temporary work</span> Type of employment

Temporary work or temporary employment refers to an employment situation where the working arrangement is limited to a certain period of time based on the needs of the employing organization. Temporary employees are sometimes called "contractual", "seasonal", "interim", "casual staff", "outsourcing", "freelance"; or the words may be shortened to "temps". In some instances, temporary, highly skilled professionals refer to themselves as consultants. Increasingly, executive-level positions are also filled with interim executives or fractional executives.

A pre-entry closed shop is a form of union security agreement under which the employer agrees to hire union members only, and employees must remain members of the union at all times to remain employed. This is different from a post-entry closed shop, which is an agreement requiring all employees to join the union if they are not already members. In a union shop, the union must accept as a member any person hired by the employer. By comparison, an open shop does not require union membership of potential and current employees.

Featherbedding is the practice of hiring more workers than are needed to perform a given job, or to adopt work procedures which appear pointless, complex and time-consuming merely to employ additional workers. The term "make-work" is sometimes used as a synonym for featherbedding.

In labor law, a union shop, also known as a post-entry closed shop, is a form of a union security clause. Under this, the employer agrees to either only hire labor union members or to require that any new employees who are not already union members become members within a certain amount of time. Use of the union shop varies widely from nation to nation, depending on the level of protection given trade unions in general.

An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain. The contract is between an "employee" and an "employer". It has arisen out of the old master-servant law, used before the 20th century. Employment contracts relies on the concept of authority, in which the employee agrees to accept the authority of the employer and in exchange, the employer agrees to pay the employee a stated wage.

<span class="mw-page-title-main">United States labor law</span> US laws on fair pay and conditions, unions, democracy, equality and security at work

United States labor law sets the rights and duties for employees, labor unions, and employers in the US. Labor law's basic aim is to remedy the "inequality of bargaining power" between employees and employers, especially employers "organized in the corporate or other forms of ownership association". Over the 20th century, federal law created minimum social and economic rights, and encouraged state laws to go beyond the minimum to favor employees. The Fair Labor Standards Act of 1938 requires a federal minimum wage, currently $7.25 but higher in 29 states and D.C., and discourages working weeks over 40 hours through time-and-a-half overtime pay. There are no federal laws, and few state laws, requiring paid holidays or paid family leave. The Family and Medical Leave Act of 1993 creates a limited right to 12 weeks of unpaid leave in larger employers. There is no automatic right to an occupational pension beyond federally guaranteed Social Security, but the Employee Retirement Income Security Act of 1974 requires standards of prudent management and good governance if employers agree to provide pensions, health plans or other benefits. The Occupational Safety and Health Act of 1970 requires employees have a safe system of work.

<span class="mw-page-title-main">Wage labour</span> Relationship where a worker sells labour to an employer

Wage labour, usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under a formal or informal employment contract. These transactions usually occur in a labour market where wages or salaries are market-determined.

<span class="mw-page-title-main">Labor market of Japan</span>

The labor force in Japan numbered 65.9 million people in 2010, which was 59.6% of the population of 15 years old and older, and amongst them, 62.57 million people were employed, whereas 3.34 million people were unemployed which made the unemployment rate 5.1%. The structure of Japan's labor market experienced gradual change in the late 1980s and continued this trend throughout the 1990s. The structure of the labor market is affected by: 1) shrinking population, 2) replacement of postwar baby boom generation, 3) increasing numbers of women in the labor force, and 4) workers' rising education level. Also, an increase in the number of foreign nationals in the labor force is foreseen.

<span class="mw-page-title-main">Employment agency</span> Organization which matches employers to employees

An employment agency is an organization which matches employers to employees. In developed countries, there are multiple private businesses which act as employment agencies and a publicly funded employment agency.

Japanese labour law is the system of labour law operating in Japan.

The degree of labour market flexibility is the speed with which labour markets adapt to fluctuations and changes in society, the economy or production. This entails enabling labour markets to reach a continuous equilibrium determined by the intersection of the demand and supply curves.

<span class="mw-page-title-main">Labor relations</span> Study of work and workers

Labor relations or labor studies is a field of study that can have different meanings depending on the context in which it is used. In an international context, it is a subfield of labor history that studies the human relations with regard to work in its broadest sense and how this connects to questions of social inequality. It explicitly encompasses unregulated, historical, and non-Western forms of labor. Here, labor relations define "for or with whom one works and under what rules. These rules determine the type of work, type and amount of remuneration, working hours, degrees of physical and psychological strain, as well as the degree of freedom and autonomy associated with the work." More specifically in a North American and strictly modern context, labor relations is the study and practice of managing unionized employment situations. In academia, labor relations is frequently a sub-area within industrial relations, though scholars from many disciplines including economics, sociology, history, law, and political science also study labor unions and labor movements. In practice, labor relations is frequently a subarea within human resource management. Courses in labor relations typically cover labor history, labor law, union organizing, bargaining, contract administration, and important contemporary topics.

In Australia, labour hire is referred to by the legal term of art labour hire arrangement, and it refers to the employment practice of an employer supplying its employees to another workplace, for profit.

Agency worker law refers to a body of law which regulates the conduct of employment agencies and the labour law rights of people who get jobs through them. The typical situation involves the person going to an employment agency and then the employment agency sending the person to an actual employer for proper work.

Iranian labor law describes the rules of employment in Iran. As a still developing country, Iran is considerably behind by international standards. It has failed to ratify the two basic Conventions of the International Labour Organization on freedom of association and collective bargaining, and one on abolition of child labor. Countries such as the US and India have also failed to ratify many of these Conventions and a mere 14 other Conventions, only 2 since the Islamic Revolution.

The Labor policy in the Philippines is specified mainly by the country's Labor Code of the Philippines and through other labor laws. They cover 38 million Filipinos who belong to the labor force and to some extent, as well as overseas workers. They aim to address Filipino workers’ legal rights and their limitations with regard to the hiring process, working conditions, benefits, policymaking on labor within the company, activities, and relations with employees.

Haken is the Japanese term for temporary employees dispatched to companies by staffing agencies.

Labour hire is a form of employment in which an employer directs their de jure employees to perform work at an external workplace, belonging to a client of the legal employer.

References

  1. "Labor Dispatch Services". chinabusinessreview.com. 24 Apr 2017.
  2. Willey, T. Joe (1988). The Business of Employee Leasing: A Guide to Employee Leasing. Employee Leasing Consulting Group. ISBN   978-0-944308-02-8.
  3. Arbeitsrecht, Rechtsanwalt Dr Martin Hensche, Fachanwalt für Arbeitsrecht, HENSCHE Rechtsanwälte, Fachanwälte für. "HENSCHE Arbeitsrecht: Arbeitnehmerüberlassungsgesetz". www.hensche.de. Retrieved 2021-01-29.{{cite web}}: CS1 maint: multiple names: authors list (link)
  4. Briefing, China (2018-03-19). "Labor Dispatch in China: Definition, Scope, and Limit". China Briefing News. Retrieved 2021-01-29.
  5. "Labor Dispatch in China - A Guide on Benefits and Limits". HROne. 2020-08-24. Retrieved 2021-01-29.
  6. "The Dispatch Labor System in China Questioned". www.chinalaborwatch.org. Retrieved 2021-01-29.