Signing a contract to work with a Chinese employee dispatch company is as tough as signing an agreement to work with a Chinese manufacturing company. Foreign companies often try to employ a local agent in carrying on their supervisory work because it is more effective to deal with the local business people. However, Chinese lawyers always receive a request on preparing a contract which will make it easy for the foreign company to work and also get on with the local Chinese employee dispatch organization. There is generally the risk of hidden issues while working with such companies and the contracts are also offered with hidden issues which can become a thorn on the way later on.
The lawyers from Chinese law firm are required to check the agreements thoroughly explaining lot of provisions to the clients. More often than not potential clients put up a deadline like 2 days to find out the flaws so that they can take early decisions. However, it is often difficult on the part of the lawyer to establish anything so quickly. Lawyers generally decline such assignments but sometimes they have nothing else to do apart from taking it up. Hiring local people to work on behalf of the foreign client has certain obvious advantages.
The biggest and foremost advantage of hiring local employees to work on behalf of a foreign company is that the foreign party does not have to worry about the Chinese employment laws which are generally complicated. Sometimes, even the employee dispatch company in China hires local agents on behalf of the foreign clients which is legal according to Chinese law. These employees operate under the foreign party on Chinese soil. However, even this does not come catch free. The Chinese laws and regulations regarding employee dispatch keeps on altering and the companies also do not care much about the foreign clients. They only care for you as long as you are paying them; they do not provide any additional services.
There are several hidden issues in such an agreement as mentioned above. The following issues will make you aware of the danger of signing such an agreement with these third parties without reading in between the lines. Some of the commonest hidden issues include:
Legal Validity- Sometimes there is an issue regarding the legal validity of such employment contracts prepared by the Chinese employee dispatch organizations. They normally do not stick to the rules which might cause you to pay more. It is important to establish the legality of the whole matter without which it is unsafe to continue working with them.
Unclear Terms and Conditions- Such contracts more often than not do not establish a binding relationship between the employee and the third party company. But the employee will operate under the company itself. This opens up the foreign party to the risk that the employee can do anything illegal to harm the client company like stealing important information and selling it outside and also other dangerous things. The worst part is that you will not be able to bring him to injustice in case of fraud because you do not have a binding contract restricting his operations.
No Power Over Putative Employee-The supposed employee working under the dispatch company on behalf of the foreign party cannot be fired from his job even if he/she commits a crime against you. Worse, even the dispatch company is not empowered to do the same. Unfortunately, you will have to continue paying him/her irrespective of whether he/she is working or not. If supposedly you can bring this employee to book, the dispatch company will pay him/her instead of paying a lawyer and settle the lawsuit. So, in any case you are the one who is paying for all of it.
Difference between Chinese and English Documents- Always remember to get the Chinese documents verified by your Chinese lawyer because there is a difference between the English and the Chinese versions. Moreover, the English version does not hold true in the Chinese court and hence getting it documented in Chinese is absolutely necessary. Also, they will require more time to prepare a contract that can protect both the parties and particularly the foreign party from ending up in a soup.
Thus, if you wish to go for a Chinese employee dispatch company, be cautious or else you could be cheated and pay for extra, illegal and unjustified money. You may also not get the kind of professional service you are looking for. Get professional legal advice and work on it with time at hand.