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China: Guidance Issued for Protection of Labour Rights for Workers under New Forms of Employment

The Ministry of Human Resources and Social Security (“MOHRSS”) together with seven other departments, recently issued the Guiding Opinions on Protecting the Labour Rights and Interests of Workers under New Forms of Employment (“Guiding Opinions”). The Guiding Opinions stress to protect the labour rights and interests of workers under new forms of employment in the aspects of determining employment relations, eliminating employment related discrimination, maintaining the minimum remuneration standards, arranging reasonable workload and rest, providing work safety measures, contributing for social insurance, and preventing occupational injury or disease.

The Guiding Opinions specifically mention those workers who do not fully meet the conditions to form de-facto employment relations, but are under supervision of the platform companies, and require the rights and obligations of such companies and workers to be reasonably defined. To avoid shifting of responsibilities, the Guiding Opinions also clarify that, if the platform companies adopt labour dispatch, outsourcing or other cooperative employment methods, the platform companies and their cooperative organisations shall bear the respective employment responsibilities in accordance with the law.

Key Action Points for Human Resources and In-house Counsel 

Most labour disputes involving platform companies are about whether their workers have formed de-facto employment relationships.  If the workers are found to have formed de-facto employment relations, the platform companies will have to bear high labour costs; if not, very little labour protection will be available to the workers. To balance the interests of the two parties, the Guiding Opinions have introduced a middle ground between employment relations and non-employment relations, where basic protection and minimum benefits shall be provided to certain workers, even if they do not form de-facto employment relations.