13.What are common special employment relationships in daily life?

Answer: In employment law practice, there are the following 4 types of special employment relations in daily life:

The first is the particular type caused by the subject qualification of the employer. The Employment Contract Law stipulates that legitimate employers include enterprises, individual economic organizations, private non-enterprise organizations, state organs, institutions and social organizations.¹

Among them, the state organs are relatively special employers in the judicial practice. Although there are judgments in the judicial practice pointing out that the state organs have no obstacles to be employers,²the courts around the country are generally inclined to strictly examine the employment contracts signed by the state organs and workers. Workers may not be recognized as employees of state organs because of the governmental recruitment requirements of pre-approval, hierarchical management problems, and employee¡¯s role being not within the scope of the business of the state organ.³This is a defect of employment law in practice that fails to follow the principle of protecting the legitimate rights and interests of workers.

In addition, case law shows that property owner’s committees do not have the qualification of employer subject, and thus employment contract signed by employee and the owner’s committee is invalid.⁴However, residents¡¯ committees are legitimate and qualified employer, and the employment contract signed by it is valid. ⁵If a representative office of a foreign company directly employs employees without labor dispatch, it shall constitute a contractor relationship with the employees.⁶

The second special case is where construction and mining enterprises contract projects (business) or management rights to individual personnel who are not eligible to be employers, or to a company who has no engineering qualification to handle the project, the enterprises may assume the responsibility of the employer for the workers recruited by the contractor, the personnel, or the company.⁷ This rule is specifically applicable to employment treatment or work-related injury liability, not to the formation of employment relations between the employees and the enterprises.⁸

For example, company A contracts out a project to company B (or individual B) without engineering qualification for construction of the project, and B recruits employee C. As a result, B disappears after receiving the project payments, and employee C can claim compensation from company A for the loss of their wages. This kind of employer¡¯s responsibility does not mean that employer A and employee C have established employment relationship, and the final identification of employment relations still needs to examine the substantive relationship and the cognitive agreement between the two parties.⁹

The third type is due to the special status of specific employees. Whether the company’s directors, shareholders, partners, and other special personnel who have common interests with the employer can become employees of the company still needs to be judged according to the substantive relationship of subordinate control and the understanding of both parties. For example, in a company with a large number of shareholders, if the chairman is still controlled by the board of directors or shareholders and is responsible for it, their share of the company’s equity is relatively small, and the chairman has signed a employment contract with the company, they may still have an employment relationship with the company.¹⁰

Another special type of employee is in-school student worker. The current judicial practice shows that there are two possibilities, one is that if the student is engaged in work-study activities arranged by the school to help students learn practical skills in enterprises, this work-study does not constitute an employment relationship with the internship employer. However, if the student is not arranged by the school to practice in the employer and the employer also manages the student as a normal employee, the two parties are likely to have formed an employment relationship. See Is it legal for my employer to refuse to pay me as a student intern?

Another kind of special employee is a foreigner or stateless person who is employed without a work permit in China. This does not constitute an employment relationship, but a contractor relationship.¹¹However, since 2018, the Ministry of Human Resources and Social Security has stipulated that Taiwan, Hong Kong and Macao residents who are employed in Chinese mainland are no longer required to apply for work permits, so Taiwan, Hong Kong and Macao residents who are employed in the mainland without work permits still have employment relations with their employers.¹²

The fourth situation is the special type of employment. The relationship between families and domestic service workers do not constitute an employment relationship (but a contractor relationship, or a service contract relationship between the families and domestic service companies). The relationship between helpers/apprentices and individual craftsmen is a contractor relationship, and the relationship between rural contractual operators and employees is a contractor relationship.¹³In addition, if the work relationship established between an employee and their second employer does not constitute special circumstances (such as the re-employment of those who are on long-term unpaid leave in state-owned enterprises), the employee does not have the standing to conclude a new employment contract, and the second work relationship may not be an employment relationship.¹⁴However, some cases hold that even so, the substantive relationship between the employee and the second employer should be examined to determine whether the two parties constitute an employment relationship, rather than simply denying the standing of the employee.¹⁵

It should be noted that even if two parties involved in work do not constitute an employment relationship, for example, if an representative office directly employs an employee, or an employer employs an employee who is over the retirement age and receive pension insurance benefits, the treatment or compensation to the employee should still be handled in comparison of the corresponding treatment of employment relations, including maternity leave treatment.¹⁶The worker does not need to go through the employment arbitration procedure, but should sue directly to the court.¹⁷

We believe that according to the fundamental principle of protecting workers in China’s employment law, the legislature should amend or even reconstruct the distinction between employment relations and contractor relations at the level of system design, and incorporate some work relations with the characteristics of contractor relations (such as direct employment of Chinese employees by representative offices of foreign companies without labor dispatch) into employment relations so as to change the current situation of insufficient protection of employees’ employment rights and interests under such special circumstances.

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Mr. Wangdong

Mr. Dong Wang has been in practice for over 20 years, specializing in business law, including employment law, commercial law, company law, and intellectual property law. Mr. Wang has earned respect and trust from his clients due to his professionalism, fidielty, and kindness.

Email: wangdong@royalaw.com

1
Article 2 of the Employment Contract Law of the People’s Republic of China.
2
Excellent Judgment Document of Beijing Court in 2018, Beijing Third Intermediate Court (2016) Jing 03 Min Zhong 11997, Employment Dispute Appeal Case between Chen Maolin and Taiyanggong District Office of Chaoyang District People’s Government of Beijing. ¡°Taiyanggong Office is the dispatched organ of Chaoyang District People’s Government of Beijing, and there is no law to restrict it as the subject of employment relations. Therefore, according to the above legal provisions, the Taiyanggong Office has the subject qualification of employment relations.¡±
3
Fujian Nanping Intermediate Court (2015) Nan Min Zhong Zi No.500, Nanping Public Security Bureau Traffic Police Detachment and Zheng Minghua Employment Dispute Second Instance Civil Judgment. “Ministry of Personnel’s Reply on the Implementation of Relevant Issues of workers hired by State Organs and Institutions ” (Renbanfahan (1995) 8), Article 5 provides as follows: The personnel administrative department shall be responsible for the management and supervision of the workers and service personnel of the state organs and institutions that generally implement the employment contract system. Therefore, if local state organs want to establish employment relations with workers, they should be examined and approved by the relevant competent personnel administrative departments. In this case, although the Appellant Traffic Police Detachment, as a state organ, signed the Temporary Employment contract of Nanping Public Security Traffic Police Department with the Appellee Zheng Minghua, it has not been examined and approved by the local competent department. Thus, there is no employment relationship between the two parties.¡± Jin Shulan and Sanjian Resident Committee of Nanyang Town, Tinghu District, Yancheng City, and the People’s Government of Nanyang Town, Tinghu District, Yancheng City Civil Judgment of the Second Instance of Employment Dispute Civil Judgment of Jiangsu Yancheng Intermediate People’s Court (2020) Su 09 Min Zhong No.2884. ¡°In this case, Jin Shulan signed a cleaning contract with Sanjian Residents¡¯ Committee and engaged in cleaning work in the corresponding area. Its work content is not part of the business of Nanyang Town Government. Nanyang Town Government has never managed it in the sense of employee. There is no personal dependence and subordination between Jin Shulan and Nanyang Town Government.¡± Feng Huiqing and Pingyin County Rose Town People’s Government Employment Dispute Appeal Case Jinan Intermediate People’s Court of Shandong Province Civil Judgment (2017) Lu 01 Min Zhong No.5656. ¡°In order to complete the task of opening a kindergarten arranged by the higher authorities, the government of Rose Town reported the kindergarten opened by Feng Huiqing as XX kindergarten. In the first instance, Feng Huiqing also stated that the kindergarten was self-supporting and self-managing, so the two parties were not employment relations.¡± Fujian Provincial People¡¯s High Court, (2020) Min Min Shen No.375, Civil Ruling on Employment Dispute Retrial Review and Trial Supervision by Wang Suzhen and the Office of Hui’an County Committee of the Communist Party of China. The court held that cleaner Wang Suzhen¡¯s “work is not part of the business of the Hui’an County Party Committee Office, and the company rules of the Hui’an County Party Committee Office are not applicable to Wang Suzhen.”
4
Dong Wanfeng, Wenhui Parking Service Department, Renhe District, Panzhihua City, etc. Civil Judgment of Second Instance of Employment Dispute Civil Judgment of Intermediate People’s Court of Panzhihua City, Sichuan Province (2022) Chuan 04 Min Zhong No.705. Employment Dispute Appeal between Wu Ping and the Owner Committee of Zhongshi Garden, Chengzhong District, Xining City Civil Ruling of Xining Intermediate People’s Court of Qinghai Province (2016) Qing 01 Min Zhong No.1438.
5
The Supreme People’s Court released the outstanding cases of the national court system in 2022, the court of Youxian District, Mianyang City, Sichuan Province (2021) Chuan 0704 Min Chu No.2292, Zhongxing Community Resident Committee, Zhongxing Town, Youxian District, Mianyang City v. Jiang Anyuan Employment Dispute Case.
6
Fu Jianwei v. New Hope Foundation (Hong Kong) Beijing Representative Office Employment Dispute Case Beijing Shunyi District People’s Court Civil Ruling (2015) Shun Min Chu Zi No.10413.
7
Article 4 of the Notice of the Ministry of Labor and Social Security on Matters Relating to the Establishment of Employment relations in 2005 stipulates that if an employer, such as a construction or mining enterprise, contracts a project (business) or management right to an organization or natural person that is not qualified as an employer, the employer who is qualified as an employer shall bear the responsibility of the employer for the workers recruited by the organization or natural person.
8
Article 7 of the Opinions of the Ministry of Human Resources and Social Security on Several Issues Concerning the Implementation of the Regulations on Work Injury Insurance (Renshebufa No.34,2013) stipulates that if a contractor with the qualification of employing subject shall, in violation of laws and regulations, subcontract or subcontract the contracting business to an organization or natural person without the qualification of employing subject, and if a worker recruited by the organization or a natural person is injured or killed at work while engaging in contracting business, the contractor with the qualification of the employer shall bear the liability for work injury insurance that the employer shall bear according to law. Article 62 of the 2015 Summary of the Civil and Commercial Trial Work Conference of the National Court (the Summary of Eight People) stipulates that the people’s court shall not support the employer’s request to confirm the existence of an employment relationship between the employer and the worker recruited by the actual constructor if the employer contracts the construction project to the contractor and the contractor subcontracts or subcontracts it to the actual constructor. Article 94 of the Employment Contract Law stipulates: Where an individual contractor employs workers in violation of the provisions of this Law and causes damage to workers, the contracting organization and the individual contractor shall bear joint and several liability for compensation.
9
Civil Judgment on Employment Dispute Retrial between Sun Qiuliang, Henan Wanli Construction and Installation Co., Ltd. and Sun Qiuliang, Henan Wanli Construction and Installation Co., Ltd. Civil Judgment of Henan High Court (2016) Yu Min Zai No.637. Wang Qingchen and Jinzhou Zhucheng Construction Co., Ltd. Civil Judgment of Employment Dispute Retrial Liaoning Provincial People¡¯s High Court Civil Judgment (2018) Liao Min Zai No.175.
10
Shandong Baixin Medical Products Co., Ltd., Lu Xiaoyi Employment Dispute Civil Application for Retrial Review Civil Ruling Shandong High Court Civil Ruling (2021) Lu Min Shen No.7271. ¡°Although the Respondent is the chairman of the board of the Claimant, the Claimant has not provided evidence to prove that there is an investment relationship between the Respondent and the Claimant, or that the Respondent is a shareholder of the Claimant, and that both parties entered into an employment contract on September 1, 2016, which indicates that the Respondent is still an employee in the sense of the Labor Law, and that the work relationship between the Claimant and the Respondent is an employment relationship.¡± Supreme People’s Court (2020) Supreme Fa Min Zai No.50, Civil Judgment on Employment Dispute Retrial between Sun Qixiang and Jilin Midas Light Alloy Co., Ltd. ¡°The second paragraph of Article 44 of the Company Law of the People’s Republic of China stipulates that in a limited liability company established by two or more state-owned enterprises or other state-owned investment entities, the board of directors shall include representatives of the company’s employees; The members of the board of directors of other limited liability companies can have representatives of the company’s employees, which clearly affirms that the employment relationship between directors and the company can be formed in the form of law, and that the appointment relationship and employment relationship are not absolutely exclusive and incompatible. In this case, Sun Qixiang was appointed as the chairman of Midas Light Alloy in July 2017, forming an appointment relationship with the company. Although Sun Qixiang did not sign a written employment contract with Midas Light Alloy, when he was appointed as the chairman of the board, he also served as the legal representative of the company, responsible for a large number of specific business management affairs such as company financing, external coordination and financial management. He was managed and bound by the company rules. Midas Light Alloy paid his wages monthly and entrusted the Foreign Service Company to pay the “five insurance and one fund” fee. Therefore, the fact that Sun Qixiang, as the legal representative, is engaged in other specific businesses of the company other than the director’s authority, and takes wages as the main source of livelihood, conforms to the constituent elements of employment relations, and is sufficient to determine that Midas Light Alloy and Sun Qixiang form an appointment relationship and a de facto employment contract relationship at the same time.
11
Article 33 of the Interpretation of the Supreme People’s Court on the Application of Law in the Trial of Labor Dispute Cases (I) (Fashi 2020 No.26). Retrial of Employment Dispute between MICHAELDENG and Zhongshan Shenbao Electrical Appliance Manufacturing Co., Ltd. Civil Judgment of Guangdong Provincial People¡¯s High Court (2008) Y.G.F.S.J.M.T.Z. No.63, Sino-US Joint Venture Kawajian Carpet Wool Crafts Co., Ltd. and WANGETSERINGSHRESTHA Employment Dispute Appeal Case Civil Judgment of the High Court of Tibet Autonomous Region (2015) Zang Fa Min Yi Zhong Zi No.49.
12
The Notice of the Ministry of Human Resources and Social Security on Matters Relating to the Employment of Hong Kong, Macao and Taiwan Residents in the Mainland (Mainland), which was implemented on August 23, 2018, stipulates that from July 28, 2018, people from Hong Kong, Macao and Taiwan no longer need to apply for the Work Permit for People from Taiwan, Hong Kong and Macao in the Mainland (Mainland).
13
Article 2 of the Interpretation of the Supreme People’s Court on the Application of Law in the Trial of Labor Dispute Cases (I) (Fashi 2020, No.26).
14
The Supreme People’s Court issued the outstanding cases of the national court system in 2020, Hunan Loudi Intermediate Court (2019) Xiang 13 Min Zhong No.2065, Guan Jianying, Hunan Jiama Business Co., Ltd. Employment Dispute Second Instance Civil Judgment. ¡°In this case, the appellant Guan Jianying is a formal employee of Loudi Works Section of China Railway Guangzhou Bureau Group Co., Ltd., who paid “five insurance and one fund” for him. On March 6, 2018, he was hired by the appellant Gama Company while did not terminate his employment with Loudi Works Section of China Railway Guangzhou Bureau Group Co., Ltd. In the court hearing, the Appellant acknowledged that he had a full-time employment relationship with the former employer, and that he did not belong to the enterprise’s personnel who are on long-term unpaid leave, the early retirees who had not reached the statutory retirement age, or the laid-off personnel waiting for their roles, and the enterprise’s personnel who had stopped production and had a long vacation, so he did not have the subject qualification to establish employment relations with other employers as stipulated by law.¡±
15
Li Baoquan and Huludao Jiada Transportation Co., Ltd. Civil Judgment of Second Instance of Employment Dispute Civil Judgment of Intermediate People’s Court of Huludao City, Liaoning Province (2021) Liao 14 Min Zhong No.1387. ¡°In this case, although Li Baoquan signed a permanent employment contract with Jinxi Petrochemical Bohai Group Company, it can be seen from the certificates issued by Jinxi Petrochemical Bohai Group Company submitted by both parties that Li Baoquan was in a state of waiting for his role. In fact, during Li Baoquan’s work in Jiada Transportation Company, the route and time of his departure were arranged by Jiada Transportation Company, and the labor provided by him was an integral part of the business of Jiada Transport Company, and the payment of labor remuneration to Li Baoquan by Jiada Transport Company was also periodic, so there was a factual employment relationship between the two parties.¡±
16
Xinjiang High Court (2022) Xinmin Zai No.229, Urumqi Meixinyuan Property Service Co., Ltd. and Ma Donghua Employment Dispute Civil Judgment of Civil Retrial. ¡°According to the Opinions of the Ministry of Human Resources and Social Security on Several Issues Concerning the Implementation of the Regulations on Work Injury Insurance (2) Renshebufa (2016) 29, the Supreme People’s Court Reply on Whether Work-related Injury can be Identified for the Casualties of Migrant Workers and Peasants over the Statutory retirement age during Work hours. ( 2012 Xing Ta Zi No.13), and Reply of the Administrative Trial Chamber of the Supreme People’s Court on Whether the Regulations on Work Injury Insurance should be applied to the work-related casualties of migrant workers and peasants over the statutory retirement age ( 2010 Xing Ta Zi No.10), all provisions provides that work-related injuries of migrant workers and peasants employed by employers who exceed the statutory retirement age shall be identified as work-related injury according to Regulations on Work Injury Insurance. Therefore, although Ma Donghua can not establish employment relations with the property company because he has exceeded the statutory retirement age, it does not affect the identification of work-related injuries.¡± Lu Liping et al. And Zhuang Xuemei et al. Civil Ruling on Employment Dispute Retrial Review and Trial Supervision Civil Ruling of Sichuan Provincial People¡¯s High Court (2020) Chuan Min Shen No.6364. ¡°With regard to the application of the law, the Measures for One-off Compensation for Casualties in Illegal Employment Employers are formulated in accordance with the Regulations on Work Injury Insurance, with the aim of making up for the system vacancy in the Regulations on Work Injury Insurance for illegal employment, and its decisions are consistent with the Regulations on Work Injury Insurance. According to the interpretation of the legal system, the court of first instance defines the case in accordance with work-related injury. It is a correct interpretation of the law, not a new interpretation beyond the law.¡±
17
Application for Employment Dispute between Guangzhou Representative Office of Hong Kong Wanlida Co., Ltd. and Ren Xiaojuan Civil Ruling of Guangdong High Court (2014) Yue Gao Fa Min Shen Zi No.95.

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13.What are common special employment relationships in daily life?

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