China – New Guide On Promoting Job-Sharing Among Employers.

11 November 2020

Job sharing is a new work arrangement under which employers are allowed to offer jobs to full-time employees who are employed by other companies but are temporarily idle or without sufficient workload due to the COVID-19 pandemic.  The job sharing arrangement does not involve transferring of the employment relationship. 

Generally speaking, labour law is a highly regulated area under PRC law, and job sharing is likely to expose employers to the risk of illegal labour dispatch. 

For the purposes of stabilising and supporting the labour market during the pandemic, a regulated form of job sharing arrangement is introduced to address the issue of surplus labour in the industries hardest hit in China. 

On 30 September 2020, the Ministry of Human Resource and Social Security issued a guide, requiring the labour authorities at all levels to take measures to facilitate job sharing among companies.  We have summarised the key areas of the guide below.

Operation of the job-sharing arrangement

Cooperation agreement and amending employment contracts

• To implement a job sharing arrangement, a cooperation agreement will need to be signed between the home company and the host company. The home company will also need to amend the employment contracts with its employees who will be "shared" to the host company.

• Dispatching workers are not allowed to be engaged in job-sharing arrangements.

• There is no limitation on the number of job-sharing employees that are received by the host company or offered by the home company.

• Authorities will assist and guide job-sharing companies to sign the cooperation agreement which will include the following provisions: (a) number of involved employees, (b) new working location, (c) term of the job sharing arrangement, (d) job duties, (e) rest and work hours, (f) labour condition and protection commitment, (g) salary standard and payout details, (h) accommodation, (i) situation for early return of employees, (j) responsibility allocation regarding workplace injuries, and (k) transportation fees etc.

• Authorities will also assist home companies to amend their employment contracts with the job-sharing employees in accordance with the following principles:
   

  • The home company will need to seek the employee's consent to the job sharing arrangement

  • The current employment relationship must not be changed or altered by the job sharing arrangement

  • The amendment to the employment contract will specify (a) the new working location, (b) position and job duties, (c) rest and work hours, (d) salary standard, (e) labour condition and protection, and (f) obligations to comply with the internal rules of the host company etc.
     

Costs of the job sharing arrangement
 

• The host company will pay labour costs to the home company for the job sharing arrangement. The home company is not allowed to charge any other fees.

• The home company will continue to pay the salary to the job-sharing employees directly.
   

Termination of the job sharing arrangement
 

• When the term of the job sharing arrangement expires, the employees will return to the home company, unless the cooperation agreement between the host company and home company is renewed and the employees agree to continue the job sharing arrangement.

• During the job sharing term, the host company may return the job-sharing employees to the home company under the following situations:
   

  • The employee is involved in gross misconduct;

  • The employee is incapable of performing his/her new job duties; or

  • Any situations agreed in the cooperation agreement under which the host company may return the employees to the home company. 
     

• A job sharing employee may request to be returned early to the home company under the following situations:
   

  • If the host company fails to protect the employee's interests as agreed under the cooperation agreement, the employee may request to be returned to the home company and the home company is not allowed to reject the request

  • If the employee is unable to adapt to the new position, he or she may negotiate with the home company and the host company to return to his/her original position with the home company
     

Supporting measures from authorities
 

• Reduce social insurance contributions of companies that are supported mainly by job-sharing employees

• Proactively monitor the data on labour shortage or surplus, publicise free recruitment information for employers through the government platform, and organise career fairs more frequently

• Encourage human resource agencies to establish job sharing information platforms

• Train job-sharing employees

• Provide free basic labour law consulting service for job-sharing employees and employers
   

As the number of COVID-19 cases in China has been maintained at low levels since April 2020, the job sharing arrangement will aid the labour market on its road to recovery.
 

Ruowei Li, Partner, Bird & Bird