배움과 공유의 시간

 Employment of trainees

Corporate apprenticeship generally refers to students in vocational technical schools. Since the original purpose of the exercise is to conduct functional training, the student status of the trainee remains unchanged and should continue to be managed by the school. If an enterprise employs a student who is in school as an trainee, it shall proceed in such a way as to conclude an exercise consultation among the three parties of the business-school-student relationship because there is no working relationship with the student.

[Regulations on Practical Management for Secondary School Students]
Article 10
Before a student comes to an exercise company and is assigned to an exercise post, the student body or the head of the student body shall conclude written consultations with the school, the trainee company to clarify the responsibilities, rights and duties of each party.

Since the relationship between trainees and the use company is not legally "labor relations," if personal injury occurs to the trainee during the exercise period, the Civil Service and the Civil Service Act, not the labor-related law, applies.

[Regulations on the Employment Ratio of Practitioners]

Some companies hire large numbers of trainees to reduce labor costs, or infringe upon the legal rights and interests of trainees. For this reason, some local governments have issued a series of regulations that strictly limit the employment rate of trainees in their use companies.
For example, Kwang Dong-sung’s "Guidelines for Practical Practice and Employment of Graduates of Guangdong High School" stipulates that the number of trainees should not exceed 30 percent of the total number of employees employed by the company.
Soju City is more stringent than this, and Article 2 of "A Opinion that Normalizes Practical Practice for Secondary School Regents in Employment Units" stipulates that the number of trainee students does not exceed 5 percent of the total number of employees in the Practical Company. Therefore, if an entity employs trainees, it must check the local government’s restriction on employment rates for trainees.

[Experimental Remediation]

Since there is no legal labor relationship between trainees and the use company, the trainee's compensation is basically not subject to the minimum wage standard of labor-related laws.
However, it is important to note that the Strict Labor Agreement Ordinance, which went into effect in May 2013, stipulates that the trainee’s compensation promised by an enterprise with students should not be lower than the minimum wage here, and obligates some provinces to pay more than the minimum wage standard for students in the province.

[Hour]
The National Regulations for Practical Practice for Secondary School Students stipulates that a student’s working hours cannot exceed eight hours per day.
Guangdong Province’s Higher Student and Graduation Labs Ordinance provides more detail that a student’s one-week training session cannot exceed 40 hours. In the case of Kang So-sung, the Stiff Labor Relationship Ordinance limits the number of trainees to less than 12 months, four hours a day, and very 40 hours a day. Therefore, it is required to note that if an entity employs trainees, it is necessary to verify the country and local local government regulations and, in particular, may cause undue overtime or nighttime work arrangements for trainees.

[In case of personal injury or injury during practice time]
Because there is no legal labor relationship between trainees and the use company, if an trainee is injured during the exercise period, it is not recognized as an industrial accident and cannot enjoy industrial insurance treatment. Alternatively, an trainee may request the provision of a liability for infringement of the rights on the basis of the Rights Violation Liability Act and the Rules for the Handling of Accidental Accidents, if he or she is injured during an exercise.
In the event that a student is injured due to negligence by the school, student or other parties concerned, the party concerned shall be held responsible on the basis of the percentage of negligence in its own conduct and the causal relationship between itself and the consequences (Article 8 of the Rules for the Handling of Accidental Accidents).
In order to minimize responsibility for personal injury or illness, the company needs to have commercial insurance, such as personal injury insurance, for the trainee before employment. In case of an insurance contract, the beneficiary of the insurance premium shall be the company in the event of an accident, and the company shall negotiate with the victim to settle the compensation issue once it receives the insurance payment.

 Business supply contract (object)

This means that the company enters into a business supply contract with an external individual to carry out certain tasks (S/W development, computer maintenance, transport services in its own vehicle).
The contractor is not a company with a business license, but a freelance individual who is on an equal footing with the company. The relationship between the two parties establishes the content, time and repair of the work, and entrusts the work to the individual through the specific work.

It is not a command supervision and subordinate relationship between labor and management, such as labor relations, but a method in which the results ordered by the rich (company) in an equal relationship are submitted by an Eulbang (individual) and remuneration is paid in exchange for the same way.

In this case, the entity is not subject to the corporate supervision and the company’s employment rules, is not required to commute on time, only if the entity issues the results specified in the labor contract at the specified time. This means that the entity is not involved in any of the processes in which the outcome is completed.

Labor-related laws such as the Labor Contract Act shall not apply to work contract relationships, and the Contract Act and the Civil Code shall be the basis of the Act. Since it is not a labor relationship, there is no need to pay social insurance. In addition, the commission fees paid by the company to an outside individual are not salary income, but are taxed and included in labor remuneration income.

(1) Precautions for hiring subcontracts

1) There should be no administrative subjugation.

Workers in labor relations are not subject to the management of user employment In other words, they are not subject to user absenteeism and punishment schemes, and there is no subservience relationship between them. If a worker receives daily care, such as management of a user's muscular system, there is a risk that is legally considered to form a labor relationship between the two sides.

2) Business contract should differ from labor contract.

The contract shall not have the contents of the labor contract agreed as is, otherwise there is a risk that it will be considered a labor contract even if the title states "subcontracting contract." The work contract may include the details of work specifically engaged in both parties, the duty of rights between the two parties, the time and method of remuneration payment, and the responsibility for placebo.

3) Receive a receipt for labor expenses when paying a repair.

When a worker receives a remuneration, the user shall require the worker to submit a receipt (劳务费) for labour expenses from the tax office. In this case, it is a strong proof that he received the labour remuneration, not the salary.

4) Job security and legal risks are very high in a similar way to regular employees

 If a contract is concluded but a contract is concluded to be similar to a full-time employee, and the other party obtains relevant evidence, and the labor relationship is judged to have been established by filing a lawsuit, it can be held liable for a huge amount of compensation, such as contract failure, double-payment, payment of social insurance, and supplementation, and economic compensation.

[Requirement contract agreement requirement clause (case)]

ᄋ Eulbang shall handle social and personal injury insurance issues on its own and shall not be held liable for any damages caused to the person or property of others during Eulbang's labor activities.

ᄋ In the labor activities of Eulbang, the Affiliate conducts no specific arrangements or management and does not require any duties. Eulbang assigns his work hours entirely to himself, decides how to carry out his labor activities, and is not under the supervision of the Gabby Rules System.

ᄋ Eulbang shall bear management risks on its own, and the Subang shall not guarantee any income of Eulbang.

(2) Risk of subcontracting with individuals

Responsibility for compensation for a worker's fantasy accident hired by an individual contractor

Our company is doing construction at B Korean factory in China. During this construction, a member of K class was injured at the construction site of plant B while working with a person named K team leader who was working as a team leader. It was an accident in which the bones of the thumb were crushed due to his own negligence. In this case, is my company responsible?

Instead of being paid directly to the injured employee, the class president recruited people to work and made profits when he gave them construction costs.

There is no problem if the company submits a contract to an individual who does not have a business group and the individual carries out the work. However, if the individual employs other workers and proceeds with the work, it is in violation of the provisions of the Labor Contract Act. This is because the legal right to hire workers is granted only to companies with business licenses. If individuals are allowed to hire workers, there will be a large number of cases of daydreaming and avoiding legal responsibility due to lack of compensation during the work process.

It is less risky for a company to contract a contract with an individual for work performed by a single person, but in the event that the individual is involved in an accident while recruiting and working with an unregistered business, the damaged worker may be held liable for joint compensation to the individual contractor and the ordering company.

Therefore, it is desirable not to place an order with an individual contractor for work requiring a large number of workers, but to enter into a contract with a duly registered company, even if it is more costly.

[Article 94 of the Labor Contract Act]
In the event that an individual has been recruited in violation of the provisions of this Act to cause damages to the worker, the organization that placed the order and the individual contractor shall be responsible for the joint compensation.

(3) Taxing personal income tax on labor-conservative income

Based on the Personal Income Tax Act and the Enforcement Ordinance, the personal income tax shall be levied on the labour-conservative income as follows, and the company shall be required to pay withholding tax. It is important to note that the taxation criteria for personal income tax on salary income are different.

Taxable income amount tax deduction amount
20% 0 below 20,000元
20,000초s and less than 50,000 30%30% 2,000
50,000 元s and 40% 7000

If a single income does not exceed 4,000 元, a deduction of 800 비용 is made for expenses and a deduction of 20 per cent of expenses is made for taxable income.
* Tax amount = Taxable income amount X tax rate - Speed tax deduction amount

5. Non-full-time employment

Non-full-time employment is a form of "part-time" employment. Since it is not a full-time employment, there is no obligation to pay economic compensation when applying for social insurance or terminating employment, and it has the advantage that labor relations can be terminated at any time.

On the other hand, non-full-time employment is required to enter into a non-full-time labor contract in writing for risk management, as there is a possibility that a full-time employment may result in legal problems, even though the Labor Contract Act stipulates that a verbal contract is possible.

Non-full-time wages are calculated by the hourly wage and must be paid within 15 days. The hourly wage should be above the minimum hourly wage promulgated by the local local government. Labor hours should not exceed the average of four hours a day or 24 hours a week.

The most problematic thing is industrial accidents. For example, in the event of a traffic accident during commuting, non-full-time employment is also part of a formal labor relationship, so the employer has the legal responsibility specified in the Industrial Accident Insurance Ordinance.

The problem is that for non-full-time systems, industrial insurance subscriptions are not allowed in most regions. Therefore, personal injury insurance is required in preparation for industrial accidents.

[working-level measures]

1. Employment contract
Make sure to sign a written non-full-time contract. The contract specifies that it is a non-full-time employment and clearly covenants the hours worked.

2. Absenteeism and tardiness management
In the event that the work hours are clearly agreed to in the contract, it is not necessary to manage absenteeism and tardiness inspection. Since the number of hours per week may exceed 24 hours per week depending on the situation, the records of absenteeism and tardiness may remain evidence detrimental to management.

3. working hours
Even if the working hours exceed the legal maximum hours, it does not matter if the contract stipulates that the working hours are within the legal When wages are paid, it will be more effective to prevent risks if receipt of the signature is recorded 24 hours a week.

4. Maintenance payment cycle
The Labor Contract Act stipulates payment every two weeks at the latest, but even if paid monthly, no special legal liability issue arises.

[business contract]

In case of labor dispatch, the company carries out direct management of dispatched workers, as it is tantamount to purchasing labor from the labor dispatch company.
However, in the case of a work supply, the contractor is not allowed to carry out direct management of workers at the contractor. This is because in the case of job delivery, it is not about labor, but about the products or services generated by the workers of the contractor. Therefore, the key difference between the two is whether or not they can directly manage the workforce.

1. Business supply contract (to company)

Business supply refers to a way of managing the work to improve the efficiency of the work, by placing an order with a professional contractor for specific tasks that are non-core and independent of the company.

For example, tasks that are not related to the essential business of the company, such as cleaning, security, and packaging, are often carried out in the form of contract with an outside professional company.
Contracts with outside professional contractors are the most legal means to minimize risks. Since professional companies become employers, problems such as labor contracts, social insurance payments, and industrial accidents are all unrelated to the ordering company.

(1) Differences between work supply and labor dispatch

The important differences between the work supply and labor dispatch are as follows:

have a different object
ᄋ The object of the assignment is "specific work items".
ᄋ The object of the labor force is the "process of providing labor" by the dispatched workers.

have different control over employees
ᄋ In a work supply, the ordering company is not allowed to directly manage the contractor's staff, but is directly managed by the contractor.
ᄋ In a labor dispatch, companies that use dispatched workers shall manage dispatched workers directly.

(2) Precautions for the delivery of work within the company

Special attention should be paid to the following matters so that they are not confused with labor dispatch.

1 The ordering company cannot directly manage the contractor's staff (such as attendance, command, high performance, reward, payment of wage welfare, and other routine management) and can only supervise the contractor's completion of the contractor's.

2 The rules of employment of an ordering company shall not apply to the employees of the contractor. In the case of employment rules that require compliance with the work progress within the ordering company, the Regulations for Employment of Contractors shall be implemented in a manner that requires them to be included in the employment rules of the contractor in advance.

3 The contractor must have a corresponding management price. For example, in the case of a contract for handling chemical products, the relevant license and qualifications must be in place.

4 If a contractor uses the ordering entity’s own internal, tools and facilities, it is desirable to employ a lease method to prevent the contractor’s employees from "working for the ordering entity."

@ 2 types of work in labor dispatch, in case of job placement

Delivery of work outside the ordering company
It is a general form of business service. In other words, the ordering company outsource some of its work to the contractor and the contractor uses its facilities and tools to manage its employees.

Delivery of business inside the ordering company
It is a special type of work supply, and it is a type of work that has been trained to cause confusion with labor dispatch. In other words, after the ordering company outsource some of its work to the contractor, the contractor sends its employees to the company of the ordering company and manages its employees using the equipment and tools of the ordering company.

(3) Risk of disguised subcontracting

In order to avoid the policy of regulating labor strikes, the format alone takes the form of "subcontracting, outsourcing" and in fact there are many cases in which companies directly conduct "coverage pay" to manage workers at contractors.

[Example] Enforcement of joint indemnity responsibilities based on disguised subcontracting
The port management company orders the unloading work in outsourced form to the outside loading company and signs a "loading contract." The unloading company sends its personnel to the port management company and obtains 10% of the total labor cost as administrative expenses. The port management company conducted direct command orders and work arrangements for the unloading company personnel.
(Explain)
Under the contract, "outsourcing" or "outside" companies are not involved in personnel management and unloading, and the port management company, which is the owner of the order, is actually considered to be employment in the form of labor dispatch (in the event of an accident, labor contract law applies, and joint compensation liability is imposed).

The important distinction between labor dispatch and delivery of work is whether to manage it directly or not. The problem is that it is difficult in practice to define the concept of "direct control of the labor process (command). For example, if a salesperson is assigned to a distribution store by a marketing contractor, the distributor (owner) may exercise the right to control the salesperson of the contractor in part, for example, the order of the place of work, safety management, quality of service, etc. Therefore, it is necessary for the company to establish a reasonable and specific management scope in the work supply consultation document if it is to give out its work.

When choosing a work-delivery scheme, the following considerations apply:

1 Delivery of work is relatively independent and suitable for simple tasks. For tasks that are core, complex and require advanced technology, they are not suitable for subcontracting in terms of confidentiality and quality maintenance.

2 It is essential to verify that the contractor has contract qualifications in the relevant field and has an efficient personnel management system and management capability.

02. Non-regular Employment Form

The labor contract law obliges life imprisonment if certain requirements are met and strictly regulates companies' unilateral dismissal.
For this reason, companies have avoided regulations under the Labor Contract Act by drastically expanding indirect employment in the form of labor strikes, regardless of industry or position, and actively hiring trainees and retired workers, in order to maintain the flexibility of employment and avoid legal constraints.

However, with the 10% total volume regulation in March 2016, labor dispatch employment has become inevitable. The entity responds by converting a large portion of the work used by dispatched workers into an external supply or other non-regular type of employment.

1. Employment of Labour Members

After the Labor Contract Act went into effect, the Chinese government passed a revised labor contract law focusing on stricter regulations on labor dispatch at the end of December 2013, which limited the employment of dispatched workers to 10 percent of the total number of employees.

(1) Overview of the labor dispatch system

In labour force employment, legal employees and actual users are separated and a three-way relationship is formed between labor dispatch companies, use companies and dispatched workers.
Labor dispatch company said, "Hiring but not using human resources"，
The use company uses human resources but uses them as a bulwark.It can be said that this type of employment is characteristic of labor dispatch.

Legal labor relations in employment of dispatched workers are established between labor dispatch companies and workers, and between labor dispatch companies and companies, and between companies and workers, and between companies and workers, a command-order relationship.

The labor dispatch company sends dispatched workers to the company, and the company pays the dispatched workers once a month, the wages and social insurance fees, and the kitchen public money.

The two dispatched workers pay the cost of managing their labor dispatch work. Usually, the cost of managing the work varies greatly depending on the blue-collar and white-collar jobs, and usually ranges from 100 to 300 yuan per month per person.

Advantages of Labour party

1 Flexibility of workforce employment

Since dispatched workers can continue to be hired in two-year increments, it is easy to adjust personnel during changes in the market environment, order reduction and business restructuring.

2 Avoiding lifetime employment

For full-time employees, after signing two consecutive fixed labor contracts, a non-fixed labor contract shall be concluded upon request by the employee, but the labor force shall not be obliged to conclude a non-fixed contract.

3 Ease of labor management

In the case of certified or on-site service workers, the labor dispatch company shall act as a proxy for the recruitment and employment procedures, and may receive assistance from the labor surveyor in the event of a labor dispute or strike.

(2) Major details of the policy on controlling labor strikes

The Labor Party Restriction Regulations, which are the enforcement regulations for labor strike regulations (enacted from March 2016), provided that its auxiliary post should be set up in consultation with the public society or its representatives, taking into account the industry and characteristics.
In other words, the company was not allowed to arbitrarily set the scope of the auxiliary post by specifying that it should be confirmed through democratic procedures and made public in-house.
In addition to the above-mentioned "precision" regulations, for "quantitative" regulations, the total proportion of dispatched workers was nailed to "10%". This includes not only "subsidiary" posts, but also dispatched workers of alternative and temporary posts.

1 Total amount regulation

The proportion of dispatched workers in auxiliary posts shall not exceed 10% of the total number of employees.
The total number of employees refers to the sum of the number of employees who have signed labor contracts directly with the company and dispatched workers.

[Example] 200 workers for the settlement of labor contract, 30 dispatched workers (22 auxiliary workers, 3 temporary workers, 5 substitutes)

ᄋ Percentage of dispatched workers in accordance with these Regulations:
30÷230 (200+30) = 13% (Total regulatory criteria exceeded by 3%)

2 Setting of the "Auxiliary" post

Only three-star (temporary, substitute, auxiliary) posts are legally available for labor dispatch.
Temporaryity (task within six months), substitution (alternative to full-time vacancies resulting from education, maternity leave, etc.) is very underutilized in real enterprises.
Thus, an absolute majority of the labour force dogs are currently being carried out under the pretext of a "subsidiary" port.

In case of auxiliary post, "subsidies" are available for labor dispatch after prior agreement between labor and management.
The category of "post" must be finalized.

1 In this case, the category of auxiliary voice port and how to use dispatched workers are prepared and the opinions of all employees are collected (e-mail, public notice, etc.).
2 The medical institution carries out the procedure for finalizing the meeting after consulting with the public or a work representative (commissioning the meeting and signing the participants).

In addition, if an entity is caught managing and using workers directly in the form of a labor strike, it is ordered by the authorities to correct it based on the Regulations for Labor-Party Restriction.

Meanwhile, the representative office of a foreign company (the judge's office) is prohibited from direct employment under Chinese law, and only indirect employment through labor dispatch is allowed. Thus, as in the past, the employment of labour force dogs is possible for all posts.

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.

Core of the Labor Contract Law - Reparations to the Workers in the Case of management misconduct

To enhance the effectiveness of law enforcement, the Labor Contracts Act simply and clearly stipulated the losses (punishment) that a company would incur in the event of an offence and the benefits (reward) that a worker would gain from it.
It is designed to pay compensation directly to workers if they commit illegal labor activities. This gave workers the opportunity to take "unpaid income" in addition to their wages.
Indeed, since the enforcement of the Labor Contract Act, there have been a number of malicious cases in which workers who have been bitten by some collectivism have been unaware of corporate misconduct in the pursuit of punitive compensation, or have provoked management to file for dismissal.

[The Effects of the Labor Contract Act on Corporate Labor Management]
o Restrictions on the elasticity of employment
- It is difficult to adjust work/wage by obligating labor contract items (work, wages, work place)
- Elastic workforce adjustment due to changes in market and business conditions at any time
o the difficulty of laying off workers
- Difficulty in dismissal if legal cause/evidence/procedure of court proceedings, and burden of double compensation for illegal dismissal
- Increase in staff and costs as evidence is secured and legal procedures are implemented.
o prolonged and rigidity in labor relations;
- the increase in lifetime employment due to prolonged labor contracts and time lapse.
- Difficulty in selection and personnel metabolism of low performers
o Flooding of labour litigation
- Increased malicious lawsuits targeting poor corporate management and loopholes
- Retroactive claims against past unfair treatment are filed at the time of retirement.

the rise of workers' rights

The sense of workers' rights in the labor market was greatly enhanced in 2008 due to the effectuation of the Labor Contract Law, the advancement of higher education, and the rapid improvement of economic standards. Companies are having a hard time managing their labor because workers are quick to grasp labor laws and insist on even the smallest details.
Collective labor disputes such as strikes and sabotage are also taking place in a routine manner, and unless workers flock to the streets and destroy facilities, the Bureau of Labor and Public Security are also avoiding active intervention against the backdrop of the government's policy to protect workers.

[Man]

o Frequent individual and group disputes due to increased awareness of rights
the frequency of labor lawsuits based on labor laws.
Difficulty in flexibly adjusting personnel according to changes in management and market conditions
o 80 and 90後 Decrease in the working spirit of new generation employees
Rising expectations such as working environment, training, and power generation space
Avoid simple work, short-term employment and career advancement
o Changing generations of farmers' workers
Unlike first-generation farmers, we expect the city to be settled (lack of the foundation of life in farming villages).
High education and high level of consumption, sensitive to wage treatment, and equipped with a high sense of rights

3. Current Status and Challenges of Human Resources Management in Korea

Korean companies in China are now facing an uneasy reality. Not only are employees clearly aware of their rights, but they are increasingly weighing and holding on to their rights and rights protection issues, and their needs exceed those of the lowest levels stipulated by the law.
In addition, unlike Koreans, who have low workforce liquidity, narrow job spans and lifetime job expectations, the Chinese value the development of self-carrier over short-term compensation and position at work, and a strong sense of individualism and rights protection, so lax labor management and seniority pay systems like Korea are bound to face major challenges after a few years of initial start-ups.

the limitations of intetation
Even if a loose Korean-style personnel management system is applied in the early days of the start-up of the Chinese corporation, it does not have any major problems. However, when the number of workers increases and the organization grows, Korean-style in-vitro management faces limitations, the phenomenon of over-staffing and post-inflation occurs, and the aging of the organization (aging, real complacency, metabolic congestion, etc.) is likely to occur after more than 10 years of entry. In accordance with the development of the Chinese corporation, if the personnel system is not localized and organized, we have no choice but to encounter a phenomenon where the control of manpower becomes difficult and the administrative efficiency is reduced by the day.

With the implementation of the labor contract law in 2008, China's labor law has shifted to a way that puts emphasis on protecting workers' rights and job security.
As workers' claims for various compensation for company misconduct became legally possible, labor lawsuits became frequent and the threshold for lifetime employment was lowered, which severely restricted the exercise of personnel rights. The time has come when it is difficult to operate a business properly in China unless the labor law is clearly understood and systematic personnel management is done.

1. The changing times of the labor law system

The Labor Act (1995) and the Labor Contracts Act (2008) are at the center of Chinese labor laws in line with the Korean Labor Standards Act. However, special attention needs to be paid to the fact that the labor law and the period in which the labor contract law were enacted are different. First, let’s look at the background of "labor law."
As the Tiananmen Square Civil War broke out in 1989, the reform-opening policy that had been pursued until then faces a major hurdle. The temporary suspension of reform and opening gained momentum again in the wake of the Namsun Ganghwa in Dengsopyeong in 1992, and the Kang Taek-min and Joo Yong-ki administrations, which were inaugurated just in time, began to pursue reform and openness policies in earnest.

Under the banner of the doctrine of Zen Buddhism advocated by Deng So-pyong, it was at that time that an extreme wave of economic commerce swept across China. The 1995 Labor Act is China's first basic labor law, which was enacted under this period. At the time of legislation, workers were not subject to protection from capitalists because the majority of workers were under the ironclad employment system of state-run companies. In addition, the need to support economic growth and absorb large amounts of rural workers rushing to cities existed, so such an era situation was reflected in the labor law as it was.

Age of Labor Law - Pro-business legislation focused on economic growth
The labor law applied the "principle of contract freedom" of labor-management equality to the fullest extent, as in civil relations, without considering the special nature of labor-management relations in unequal relations due to the inherent imbalance of power.

Based on this, companies were able to improve their employment elasticity and curb labor costs low by repeating their one-year labor contracts, and at that time, Chinese labor officials were mainly engaged in administrative work such as hiring and leaving. In other words, in the era of labor law, because the reaction to the "iron rice bowl" employment practices of the Mao Tse-dong era in the past allowed unlimited employment of short-term contracts based on the "principle of contract freedom," businesses had to concentrate only on production and operations, which in turn contributed greatly to China's growth into a "world factory."

Labor Contract Law - Pro-labor legislation focused on social stability
However, in the shadow of high economic growth, workers who have become socially weak have begun to complain as the gap between the rich and the poor has deepened day by day. The Hu Jintao-Wonjeobao government, which emerged in 2002, shifted the idea of state affairs from "economic growth" to "a harmonious society" and put forward a "pro-people policy" aimed at stabilizing social stability and governing power. In the labor sector, legislation was initiated to protect the weak from the strong capitalists, and the results were in the form of a series of pro-labor legislation, including the labor contract law.

By the way, the Labor Contracts Act, which took effect in January 2008, turned China's labor law environment into a labor-friendly one. Since the Labor Contract Act is a pro-labor law enacted by slanting to workers to correct the imbalance in power between labor and management, companies have been reduced from strong to weak, placed under restrictions in exercising personnel rights and greatly raised labor management risks.

Since then, eight years later, in 2016, workers have contributed to protecting their rights, but there have been moves to revise some rigid provisions in the future, as voices of concern have erupted from the government’s high-ranking and industrial circles that the flexibility of manpower employment and rising employment are causing corporate competitiveness and foreign companies to withdraw.


2. Labor contract law and personnel management

Labor Contract Act - Special Act on the "labor contract part" of the Labor Law
The Labor Contract Act was enacted as a special law, separating only the parts of labor contracts from the labor laws. Thus, the Labor Law, a comprehensive law that defines labor relations comprehensively, remains in effect after the Labor Contract Act took effect. However, due to the advent of the Labor Contract Act, the previous provisions of the Labor Contracts Act, which relate to labor contracts or contradicts the prestigious provisions of the Labor Contracts Act, are suspended.