By Linda Liang Hongchuan Li King & Wood Mallesons’ Commercila & Rehulatory Group
Article 27 of Interim Provisions on Labor Dispatch stipulates that “where an employer uses workers in the form of Labor Dispatch under the name of hire of work, outsourcing, etc., the provisions hereof will apply.” The so-called concept of “de facto labor dispatch” is derived from this article. There isn’t a definitive line in distinguishing outsourcing and labor dispatch in practice. Certain local regulations in Shanghai and Jiangsu do provide guidance, but not enough to be conclusive. It is imperative that we append supplemental materials in judicial documents after proper review.
Referencing 28 relevant cases, this article summarizes the key factors surrounding “de facto labor dispatch” by presenting statistics and corresponding analysis.
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