On Employer’s Liability In Labor Dispatch

Labor Dispatch, as a new form of employment, which originated in the UnitedStates, and developed in Japan and Europe, has gone through a development process,from strict prohibition to encouraged development and to strict control, in China.Labor dispatch is such a form of employment that its employment contract isconcluded between the entity employer dispatching the employee and the employeeto be dispatched, after which the employee will be dispatched to the receivingemployer, and carry out the tasks of labor under the receiving employer’s commandand supervision. Different from the traditional labor relationship, labor dispatchinvolves the entity employer dispatching the employee, the entity employer receivingthe dispatched employee and the employee to be dispatched three parties.Law of the People’s Republic of China on Employment Contracts makes theearliest explicit stipulations on labor dispatch, which includes the establishment termsand legal obligations of the entity employer dispatching the employee, legalobligations of the entity employer receiving the employee, and the legal rights andobligations of the employees to be dispatched and so on. However, as to theemployer’s liability in dispatch, it hasn’t made the due explicit stipulation. Theintroduction of The Tort Law has filled up the legislative gap on the employers’liability, with its Article34(2) providing:“Where, during the period of labor dispatch,a dispatched employee causes any harm to another person in the execution of hiswork duty, the entity employer receiving the dispatched employee shall assume thetort liability; and the entity employer dispatching the employee, if at fault, shallassume the corresponding complementary liability.” This provision, though, to someextent, makes the application of the employer’s liability have laws to abide by, is stillfaced up with many problems.This article gives a study on the employer’s liability and divides it into five parts,hoping to make some contributions to the system’s improvement in the employer’s liability in our country.Part1: China’s legislative status quo on employer’s liability system in labordispatch. Labor dispatch, as a new form of employment, though it has not existedvery long, has been developing rapidly. Law of the People’s Republic of China onEmployment Contracts makes the earliest explicit stipulations on dispatch; however,its characteristic of emphasizing the protections of the employee’s rights and interestshas left the taking of the employer’s liability in blankness. Article34(2) in the TortLaw provides that the entity employer receiving the dispatched employee shallassume the tort liability where a dispatched employee causes harm to another personin the execution of his work duty, and the employer dispatching the employee, if atfault, shall assume the corresponding liability, which is the first of its kind in theemployer’s liability system. That is, the employer receiving the dispatched employeeassumes no-fault liability; meantime, the employer dispatching the employee assumescomplementary fault liability. However, Article34(2) in the Tort Law hasn’t makeclear stipulations as to the following problems, e.g. what are the faults that can beattributed to the employer dispatching the employee, whether the employerdispatching the employee shall assume limited complementary liability or the wholecomplementary liability, whether the employer dispatching the employee has the rightto claim compensations from the employer receiving the dispatched employee, andwhether the employer receiving the dispatched employee or/and the employerdispatching the employee has/have the right to claim compensations from thedispatched employee. The above-mentioned blankness makes the application of thisarticle face up with many dilemmas.Part2: The employer’s liability in labor dispatch, as a new form of employer’sliability, shall comply with the principle rules of its kind. Therefore, it is necessary tothoroughly grasp the employer’s liability in order to resolve the above-mentioneddilemmas existing in the employer’s liability in labor dispatch. This section firstcombs the legislative history of the employer’s liability in our country, which placesthe employer’s liability in labor dispatch in the accurate position. Then it analyzes thebasic theory in the employer’s liability. As to the attributing principles of liability,through inspection of major countries’ legislations, it tends to adopt the no-fault liability. The provision of Article34(1) in the Tort Law is also in line with theinternational mainstream trend. On the exterior assuming of the liability, threelegislative models in comparative law now exist, that is, the model of German, ofJapan and of Taiwan of China. The Tort Law in China has adopted the legislativemodel in German Civil Code, which stipulates the employer shall assume soleresponsibility for the liability to exterior. However, on the interior assuming of theliability, the comparative law all recognizes the employer’s right of resource, andkeeps it within a certain limit so as to achieve a balance between the employer’sinterest protections and the employee’s protections. While Article34(1) in the TortLaw hasn’t made clear stipulation on the employer’s right of resource to the employee,it tends to recognize this right.Part3: The comparative law study of the employer’s liability in extra-territoriallabor dispatch. Throughout the judicial practice and doctrine on the employer’sliability in labor dispatch in the United States, British, France and Taiwan of China,the court requires, in most cases, one employer to bear the liability. Only when it isreally impossible to determine which party to bear the liability will the courtdetermine the employers to bear the joint and several liabilities. This has importantreference value in improving the employer’s liability system stipulated in Article34(2)in The Tort Law.Part4: The improvement of the employer’s liability system in China. Bycombing the basic theory in the employer’s liability, learning from foreign doctrineand judicial precedents, basing on the only provision on the employer’s liability inChina, that is Article34(2) in The Tort Law, the following four improving advice issuggested: First, the employer dispatching the employee, if neglecting the necessaryduty of care when selecting the employee, shall bear the liability; Second, theemployer dispatching the employee doesn’t have the right of plea for preferenceclaims, assumes only the complementary liability that corresponds to its fault degree,Third, the employer dispatching the employee doesn’t have the right to claimcompensations from the employer receiving the dispatched employee, except asotherwise agreed by both parties; Fourth, the employer receiving the dispatchedemployee or/and the employer dispatching the employee has/have the right to claim compensations from the dispatched employee.Part5: Conclusions. The Tort Law in China has divided the employer’s liabilityinto two systems, the liability in the employer units and the liability in the individualemployer, and classifies the employer’s liability in labor dispatch into that of theemployer units. On this foundation, combining the respective legal obligations of theemployer receiving the dispatched employee and the employer dispatching theemployee, Article34(2) in The Tort Law stipulates separate attributing principles, andapplies different entity liability. This kind of legislative model not only fills up thegap in the employer’s liability in labor dispatch in China, but also instructive to thelegislations of other countries and regions. However, examining the provision ofArticle34(2) in The Tort Law, it is still inadequate, which is the dilemma all theabstract articles in the written law may face, and this makes it necessary to introducesome appropriate supporting systems to resolve the problems appearing in judicialpractice. Given that no judicial interpretation of the Tort Law has been introducedcurrently, it is suggested that a provision be made in the later judicial interpretation,stipulating that the term “fault” in Article34(2) in The Tort Law means the employerdispatching the employee neglects its necessary duty of care when selecting theemployee. The employer dispatching the employee, who assumes complementaryliability that corresponds to its fault, doesn’t have the right to claim compensationsfrom the employer receiving the dispatched employee, except other wisely agreed.The employer receiving the dispatched employee and the employer dispatching theemployee have the right to claim compensations from the dispatched employee,pursuant to Article9(1) in the judicial interpretation of damages for personal injuries.