배움과 공유의 시간

01 Types of Employment

Since the Labor Contract Act took effect in 2008, legal risks for regular employment have increased sharply. The Labor Contract Act was because it significantly strengthened the legal protection of workers by directly linking corporate illegal labor activities to economic compensation to workers in order to ensure stability and long-term labor relations. Given the increased risk of regular employment, it is necessary for an entity to break away from the single shift in regular employment and increase the elasticity of employment by using various types of non-regular employment suitable for the job characteristics.


1. Types of employment patterns

If the company requires cleaning staff, there are various types of non-regular employment as shown below.

1) Contracts with cleaning company are contracted and the cleaning work is entrusted. - Business supply (contract)

2) Employ non-one-time (part-time) staff. - Non-daily employment (direct employment)

3) Hire a retired person. - Retirement inventory (civil accident)

4) Through a labor dispatch company, dispatched workers are employed. - Employment of labor workers (indirect employment)

5) A full-time employee shall be employed as a full-time employee and shall be exclusively responsible for cleaning. - Form of formal employment (direct employment)

From the standpoint of the company, it would be reasonable to choose the employment method of 1),2),3) that has no obligation to pay social insurance or to pay economic compensation, and that can terminate the use relationship at any time. However, most of the company's jobs require professionalism and responsibility, and therefore do not have a variety of options, such as hiring cleaning staff.

With the labor cost burden of regular employment and strict restrictions imposed on legal dismissal, it is necessary for the company to manage the workforce by combining employment in the form of non-regular workers, moving away from the single employment of regular workers, taking into account their job characteristics, importance and possibility of substitution.

2. Risk of temporary public employment

In China, temporary work is called various terms such as 小 and 钟点工. However, with the promulgation of the Labor Contract Act, it was clearly legally prescribed in the form of "non-one-time" employment. For only a few months, they should either hire full-time full-time workers or in the form of part-time employees. The legal risk is very high if full-time employment is hired on a temporary basis without signing a contract that clarifies the type of employment. Social insurance, including double wages and economic compensation for failure to pass a written contract
It may be required to pay supplemental payments.

[Example] Risk of liability for compensation for temporary public employment

Because the industry is clearly divided between the peak and the off-season, many auxiliary workers are needed during the peak season, and these auxiliary workers are employed at peak times. The president of the company thought that because these workers were not full-time employees, they did not have to sign labor contracts and paid according to working hours.
At the end of the three-month grace period, as the company tried to retire after notifying "temporary workers" of the termination of their work duties, they had demanded that they pay double the wages for the period of non-payment of labor contracts as well as economic compensation.
In court, the company was ordered to pay 0.5 months of economic compensation for each person, two months of unpaid compensation for a written contract and a total of 2.5 months. After all, due to the lack of understanding of the law rather than the workers, they paid the harsh price of hiring for three months and paying 5.5 months of wages.


[working-level measures]

When an entity needs to perform a particular task on a temporary or seasonal basis, approximately four types of choices exist.

1) Non-one-time (Arbyte) Employment: In this way, non-one-time labor contracts are signed.
You can hire. However, working hours are limited to an average of 4 hours per day and 24 hours per week.
Not suitable for full-time work.

2) Labor party recruitment methods: indirect employment through labor dispatch companies. Short-term indirect employment for weeks or months is also possible in cases such as sales promotion sources, but normally for general positions, the contract period of two years is required by the labor dispatch company.

3) Civil accident: Retirement workers after 50 years of age and 60 years of age are not regarded as laborers under labor laws, so they can sign labor contracts and hire them full-time.

4) Delivery of work: Subcontract the entire related work to an outside professional. For example, packing, material injection, etc.

(1) Labor contractingism

Until the Labor Contract Act came into force in 2008, small and medium-sized companies did not properly comply with the labor contract’s arrest and social insurance premium burden. Because of this phenomenon, there have been many cases of unfair labor in rural areas and foreign spending where even the fact of the existence of labor relations is not recognized in court even if injured in a fantasy accident. The labor contract law, which went into effect in 2008, designed companies to pay punitive compensation to workers when they hire them without signing labor contracts
The labor contract law sharply increased the law's violation of the law to the point that it is virtually impossible to hire without signing a written contract. The grace period for the signing of a labor contract is one month from the date of hiring workers or continuing to hire them after the termination of the contract. From the point of exceeding one month, the entity will face a lifetime employment risk after one year, as well as a double pay reimbursement.

The labor contract is signed from an equal relationship to a negotiating match, and once signed, it turns into a subjugation relationship of "command-submission." However, if some of the provisions of the arrangement are required to be changed during the contract period, they face the difficult problem of having to change the agreement back to an equal relationship. The Labor Contracts Act clearly stipulates the conclusion of written Change Consultations, which imposes many restrictions on companies that frequently need the rational placement and adjustment of personnel according to changes in management conditions and the ability of individual employees.

(2) You can specify the grounds for dismissal in the employment rules.

South Korea's Labor Standards Act does not set specific conditions for possible layoffs, but comprehensively stipulates them as "objective and reasonable reasons and cases that are recognized as substantial in social concepts." On the other hand, China's labor contract law stipulates that the specific "why the court can be removed" from the contract as a legal clause. In order to terminate a labor contract, it must comply with one of these legal reasons, and the non-compliance is considered "criminalization."
For this reason, unlike Korea, employment rules play a very important role in China. The labor law gave companies the right to conduct employee management on the basis of establishing employment rules. The company may exercise the right to dismiss workers if they violate the labor discipline stipulated in the employment rules strictly.
However, there are many real limitations to the exercise of the right to fire. For example, even if there is a reason for the removal of a court saying, "A major loss to the company by committing a fraud has occurred, there is a risk of being deemed "law-inflicted" if the company is to have "evidence" to prove the cheating and dismisses the employee without being notified in advance of the critical loss criteria. Therefore, it is very important in China to list in detail what acts constitute reasons for court release in the company’s employment rules and to obtain a notification confirmation from the workers.

(3) Combined operation of contract system and lifetime employment system

The Labor Contract Act limited fixed-term labor contracts to two times only in order to ensure social stability through the promotion of long-term employment relations and stabilization. In other words, they will take the mainstream of employment to long-term labor contracts and an indefinite employment system.
In China, there are generally two forms of fixed-term labor contracts and indefinite-term labor contracts, employing regular workers. Typically, the first time an entity enters into a two to three-year fixed-term labor contract and the user is free to terminate the employment at the end of the first labor contract. However, if a second labor contract is to be renewed, it shall be considered that the verification of the worker has been completed and the company shall comply with the request of the worker to sign a non-fixed contract unless there is a material defect to the worker at the expiration of the contract (the reason for the dismissal of the penalty, the job defect, and the disease).
The conclusion of an indefinite labor contract means that the contract will be converted to an "undated contract" and, in the event of a non-fixed contract, the employment is guaranteed up to the retirement age unless there is a reason for the removal of the law.

(4) Linking the reasons for retirement with economic compensation and economic compensation

China's economic compensation is different from Korea's retirement benefit system. In China, it is mandatory to pay economic compensation on the compensation level, considering that termination of employment due to the circumstances of the management upon termination of the contract due to the causes of management and termination of employment at the time of maturity resulted in unemployment by other parties, and there is no need to pay for voluntary retirement. If a company disposes a worker without permission and is judged to be "dismissed" in a labor action, it shall pay the worker an economic reward equal to twice the economic compensation.
On the other hand, in Korea, severance pay can be considered an accounting liability and thus cost can be processed annually as a "retirement benefit allowance" because there is a payment obligation for all workers, but in China, payment is uncertain for each individual and therefore only as a tax expense when the payment is actually made.

(5) Differentiating labor relations from employment relations

Labor and employment relationships are no different in that one party provides labor and the other pays labor remuneration. In China, however, "labor relations" are established only in the employment of workers prior to the retirement age, and only in the form of civil contract with retired people, students and others. The Labor Contract Act obligates workers to sign labor contracts with workers whose labor relations are established. If a labor contract has not been entered into despite the establishment of a labor relationship, it is considered a "factual labor relationship" and the labor law applies regardless of whether the contract is concluded or not.

[the qualifications of the principal in labor relations]

1. User
Labor relations with workers are formed only by a corporation, an organization, that is officially established in China. Individuals do not have a working relationship with employees, even if they are employers. Since "personal employment relations" (private contracts) are established with police departments and drivers hired by foreign residents for private purposes, there is no need to sign labor contracts and there is no restriction of labor laws. .

2. Worker
The qualifications of workers recognized by Chinese law are different from those of Korea. Those aged 16 and over are only entitled to work as long as they are before retirement (excluding repeat students). Labor relations are formed only when those over the age of 16 and graduates of schools do not reach the legal retirement age. Once a worker reaches the legal retirement age, he or she loses his or her legal status as a worker on that date and is not allowed to pay social insurance. If employed by a company after the legal retirement age is exceeded, a labor contract relationship (employment relationship) between the company and the equal entity to which civil law applies is formed. Labor contracts are short for "labor-services contracts" and mean contracts of the nature of exchanging costs with labor services on the basis of persons (students, retirees, etc.) and civil and contract laws, which are outside the scope of workers.

Characteristics of the Labor Law System

With more than 30 local governments on the basis of the socialist system, China operates a labor legal system that is quite different from ours. It has a complicated system that is difficult to understand easily for Korean companies, such as the presence of the central and local laws, written labor contractism and the importance of employment rules. Therefore, it is very dangerous to enter China and manage labor on the premise that it will be similar to Korea. The common sense of Korean labor management is not common in China.

1. The legal system

In China, which has a population and national territory equal to dozens of countries, it is practically difficult to apply the central basic law uniformly across the country because of differences in economic and social development between provinces, the gap in living standards, culture and mindset. Also, after the reform and opening up, the Chinese government has decided to promote economic development.
Under the premise of the "centralization system," the local decentralization, or the local prestige policy of central power, is being implemented.

A case in point of decentralization is the local prestige of the legislative power. The "legislative law" that went into effect in July 2000 allows local governments above a certain level (e.g., provinces, municipalities, and coastal cities) to enact local regulations within the scope of the central law.
The central laws have their respective roles: principle-based (abstract and principled), and local laws (concrete and practical). In addition, the Supreme People's Court frequently promulgates "judicial interpretations" of legal matters related to judicial proceedings, which have a judicial effect and thus are binding on the litigants, as is the law.

Importance of Local Laws

Chinese labor laws are complex and difficult compared to Korea. It is composed of multiple layers of central and local laws, judicial interpretation and administrative regulations, and there are only independent local labor laws in different provinces, even different local law enforcement agencies differ in their application standards.

The minimum wage and social insurance payment rates vary from region to province, and the payment and conditions of high-temperature allowances and heating costs are set differently depending on which climate zone is located. The same labor dispute issues are often subject to different sentencing standards if the region is wrong.
For this reason, China, unlike our country, puts "local law" before "central law" in the actual labor scene. The central law defines only large legal boundaries in principle, and the tax rules for implementation are established and operated independently by each local government. For this reason, the local labor and judicial authorities are also making administrative or judicial decisions by prioritizing local laws. .

Since most of the Chinese labor-related data we encounter frequently centers on the basic laws and administrative laws of the central government, it is not helpful to the labor management of companies operating in certain provinces. Therefore, on-site labor management, it is necessary to check and verify the important local regulations in the areas in which it is advancing, as well as the central laws. Labor management without grasping local laws and administrative notices may face labor disputes or be in a situation where labor costs are overpaid.

administrative notice of local government
Companies entering China must have a clear grasp of the various administrative notices promulgated by the local local government. This is because laws and administrative notices related to labor and social security systems continue to change in content or are updated regularly each year.
For example, for "the average monthly wage of a former worker" which is the basis for the payment of social insurance premiums, the figures are regularly issued by local governments in the form of "notifications" each year. Failure to do so may result in errors in labor-related work, including social insurance payments and calculation of economic compensation. It should also be noted that the payment rates of social insurance, the minimum wage standard and the number of days of legal paid leave are also subject to different local standards, and that the content continues to fluctuate on a regular and irregular basis.