Draft would shield workers

Legislators on Tuesday got their first opportunity to review a draft amendment to the Labor Contract Law that is aimed at preventing the overuse of labor outsourcing and at ensuring people are treated equally in their workplaces.

Wu Ritu, vice-chairman of the Financial and Economic Affairs Committee of the National People's Congress, said too many employment agencies are outsourcing labor. He also said outsourced employees tend to be overworked and do not enjoy the same wages or social security benefits as regular workers who are doing the same jobs.

"The overuse of labor outsourcing will not only harm workers' legal rights but also bring harm to regular employment and the labor contract system," Wu said when explaining the draft to members of the NPC Standing Committee on Tuesday.

A report released last year by the All-China Federation of Trade Unions, the nation's top trade union organization, said the country is home to more than 60 million outsourced workers and that they make up almost 20 percent of the urban workforce.

The Labor Contract Law allows employment agencies to be established to provide companies with workers for temporary, subsidiary and substitute positions.

The draft would define those three types of positions for the first time.

Temporary positions refer to jobs that last for no longer than six months; subsidiary positions refer to jobs that provide supportive service to main posts; and substitute positions refer to vacancies left by regular workers who leave their jobs to take vacations or study full time, it says.

The draft also explicitly stipulates that labor outsourcing can only be used to fill temporary, subsidiary and substitute positions and that outsourced workers should receive the same pay as those who are doing the same jobs as they are for the same employers.

Unlike people who are employed directly by companies, outsourced workers have labor contracts with employment agencies. Those organizations pay the workers' wages and, in return for providing outsourcing services, charge employers commission and management fees.

The draft would also require employment agencies to have at least 1 million yuan ($157,000) in registered capital, up from 500,000 yuan now.

It also lists what punishments will be imposed on violators of the proposed rules. Agencies or employers that seriously break the law will have to pay a fine of 5,000 yuan to 10,000 yuan for every outsourced employee they have placed and will have to halt their labor outsourcing business.

State-owned enterprises and government-affiliated public institutions and industries, such as petrochemical, telecommunication, finance and banking companies, employ the most outsourced workers, the trade union report said.

In May, Li Danting signed a three-year employment contract with an employment agency, becoming a teacher at Shenyang University in Shenyang, capital of Liaoning province.

Li said she earns about 1,800 yuan a month, about 1,000 yuan less than regular workers who do essentially the same job.

The nearly 20 workers who began working at the school at the same time as Li were all hired through an employment agency and are now either teaching or working in administrative positions, she said.

"I'd be glad if I could enjoy the same salary that regular workers have," said Li, who is 26. "That's the most practical difficulty that we are faced with."

"It would be great if this proposed law could free me from the trap of outsourcing. My pay comes to only about 80 percent of what other people make doing the same job and I don't think I have even the slightest chance of being promoted," said Huang Yu, 25, who has been employed as an outsourced worker at a media firm in Beijing for nearly three years.

"Because of these inequalities, I always feel inferior," said she.

Ba Honghao, a manager with Wanshitong, a Beijing-based employment agency, said most of Wanshitong's clients are State-owned enterprises, public institutions and joint ventures.

"We are giving outsourced workers almost the same wages and social security benefits that other sorts of workers who do the same jobs get," he said. "And we are operating this business in accordance with the Labor Contract Law.

"Those companies are our long-term clients. So I think the proposed rules wouldn't affect us much."

Ba, though, said many private and small agencies probably deduct the wages they pay outsourced workers from the commission and management fees that they receive from employers and offer scant social security benefits.

"If the amended law takes effect, that would be a heavy blow to agencies that are being operated incorrectly", he said.

Zhao Wei, a labor expert at Beijing Normal University, said fewer workers will be outsourced if the amendment takes effect.

"Efforts to ensure the new rules are enforced in State-owned enterprises and public institutions will always be effective," Zhao explained.

She said labor outsourcing is a reasonable way to employ people who work on things such as air conditioners and who are needed in greater or lesser numbers in various seasons of the year.

"No matter if one uses outsourcing or not, the essential thing is to ensure that outsourced workers enjoy the same wages and social security benefits as other sorts of workers," Zhao said. "And law enforcement authorities should also make sure that businesses that take on workers for long-term employment do not turn to outsourcing."

Feng Tongqing, a professor at the China Institute of Industrial Relations, suggested that giving workers more say in wage talks would be more effective than adopting more rules in dealing with the labor outsourcing issue.

He also called on trade unions to participate more in such matters.

"A mandatory requirement for wage equality might do more harm than good," Feng said. "For example, employers might directly employ workers without giving them labor contracts, for, in the labor market laborers are always in a weak bargaining position."

Life is difficult as outsourced laborer

Li Fangchao is glad he could become a regular employee at China National Aviation Fuel Supply Co this year.

Li, who once took various odd jobs in the Inner Mongolia autonomous region and Shanxi province, went to work at the State-owned employer in 2010 via an employment agency in Beijing.

The 27-year-old supplies gas for planes at the Beijing Capital International Airport every day and earns about 3,000 yuan ($470) a month. His salary is about 1,000 yuan less than regular workers doing the same job and of almost the same age.

"I often felt I was inferior to others and I lacked a sense of security working here because I always thought I was just an outsider to the company," he said.

But Li's worry has faded because the company's Beijing branch, where he works, plans to turn all its 138 outsourced workers into regular workers in the next three years.

Sun Li, board chairman of China National Aviation Fuel Group Corp, the parent company of Li's firm, said among its nearly 10,000 staff members across the country, 23 percent are outsourced ones and most of those workers are working in fuel supply and oil depot operation positions.

"We have found that there are frequent changes of outsourced workers because they lack a sense of belonging," he said, "Outsourced workers occupy 30 percent of our fuel supply posts. It would be dangerous and would affect the company's development if they randomly come and go."

The company started a program of turning outsourced workers into regular employees in 2010. Candidates' work performance, skills and work attitude would be considered when gauging their qualifications.

So far, the program has benefited 162 workers and the group vows to extend the program.

Thanks to the program, the turnover of outsourced workers is now 5 percent, down from 15 percent in 2010, according to Zhang Xinyue, Party chief of the company's Beijing branch.

Zhang also acknowledged that an outsourced worker would see a 16,000 yuan rise in wage, welfare and other bonuses a year after becoming a regular worker.

Zhang Lisong was outsourced to the company five years ago and he was lucky to become a regular worker in 2010.