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China has recently announced that it will change its labour law to close loopholes when companies hire workers through staffing companies or labour agents. But the amendments, which are due to come into force on 1 July, have since come under criticism.
Legal expert Zhou Bho of Chinese law firm Fangda Partners said: “This amendment is a little too far away from the current situation in China. You cannot just pass a law and expect companies to change overnight after such a long time.”
Speaking to China Law and Practice, he said that the amendment remained too vague and could create new loopholes. The revision of labour law now states that the “temporary” use of contract workers refers to durations of less than six months. Substitute workers should only replace staff on leave, and auxiliary workers should be found in supporting positions.
According to Mr Bho, these definitions are too simplistic, making it difficult to justify the use of contract workers in some cases. Moreover, employers can still abuse their power by creating another temporary contract after the first contract runs out after six months. Additionally, he said, penalties for those breaking labour law are not imposed directly. The labour inspectorate will first ask violators to rectify the problem before imposing a penalty.
The proposed new regulations will also aim to control the proportion of workers contracted through agencies with a ratio expected to be under 50%. They are aimed at preventing abuses and regulating the overall use of contract workers.