Source: China Labor Security News (Theoretical Edition), December 12, 2023, 3rd edition

Xue Huiyuan，Wu Xinyun

The report of the 20th National Congress of the Communist Party of China proposed to "improve the system for safeguarding the rights and interests of workers, strengthen the protection of the rights and interests of workers in flexible employment and new forms of employment". On July 16, 2021, the Ministry of Human Resources and Social Security and eight other ministries jointly issued the "Guiding Opinions on Safeguarding the Labor Security Rights and Interests of Workers in New Forms of Employment", which for the first time proposed the situation of "not fully complying with labor relations". A misunderstanding also arises, which holds that "not fully conforming to labor relations" is neither a labor relationship nor a service relationship. Therefore, the "two-point" labor legal framework is no longer applicable, and a "third law" should be established for new types of workers, namely the "three-point" labor legal framework. This viewpoint forcibly equates the "three classifications" of labor relations with the "three classifications" of labor legal framework, which goes beyond the original intention of the document and easily misleads the direction of reform for labor rights protection. In fact, the "three-point" approach is not the mainstream international practice and has inherent drawbacks and potential risks. At present, the vast majority of new employment models have not departed from the binary nature of "employee employer", and the basic form of the labor legal framework can still adopt the "binary" approach, but the scope of application of labor laws needs to be moderately expanded.

It is not advisable to promote the transformation of the labor legal framework towards a "three-point" approach

One reason is that "three-point" will lead to more uncertainty in the determination of labor relations.

The "three-point" cannot fundamentally solve the problem of defining labor relations for the "third type of workers", but instead leads to more uncertainty. There was originally only one "gray area" between labor relations (protected by labor laws) and labor relations (protected by civil law), but after the "three parts", it has become two, and the ambiguity of defining the identity of workers has become even greater. Moreover, the criteria for determining labor relations for the "third category of workers" are already very tricky: whether the subordinate characteristics of labor relations are still applicable, whether the judgment criteria should be complete or incomplete subordinate, which is more important between economic and personal subordinate attributes, and what proportion of income should be determined for economic subordinate attributes... "Three parts" cannot solve the current problem, and may even trigger more problems.

The bipolar structure of "binary" may seem inflexible, but it is still the mainstream practice in the world and has its own reasons. The few countries that have institutional arrangements for "third class workers", such as Germany's "class employees", the UK's non employee workers, Spain's self-employed workers, Canada's dependent contractors, etc., can be seen from their names alone, and their actual meanings and institutional designs are even more different. It would be foolish to indiscriminately regard the practical experience of these countries as an international reference for the "three-point" of China's labor legal framework, let alone the practice of placing "third class workers" under labor law protection in these countries.

The second reason is that the "three-point" policy may lead to errors in the differentiation of workers' rights and interests.

The core reason for the criticism of "binary" lies in the complete or complete ownership of workers' rights and interests. Most supporters of the "three-point" approach use this as an argument, hoping to alleviate the polarization caused by the "one size fits all" approach by setting up a middle ground for protecting workers' rights and interests. However, the "three parts" of the labor legal framework cannot avoid the issue of labor rights and specific standards corresponding to different types of workers. Countries with arrangements for the "third type of workers" system have different settings on this issue: if the "third type of workers" tend to be employees, they need to be given more labor rights, which will increase the employment costs of platform enterprises, reduce their competitiveness, and even the "third type of workers" who will benefit in the long run will express dissatisfaction and protest due to the short-term income decline; If the "third type of workers" tend to be self-employed, platform companies have a strong motivation to downgrade formal employees to "third type workers".

Some opinions believe that the "Guiding Opinions on Safeguarding the Labor Security Rights and Interests of Workers in New Forms of Employment" mention fair employment, labor remuneration, rest, labor safety, social insurance and other labor rights and interests, which are "high-intensity settings that tend to be employee oriented" for workers in new forms of employment with "incomplete labor relations". In fact, the original wording of the document never corresponded the above-mentioned labor rights with "incomplete labor relations". The rights and standards that "incomplete labor relations" can enjoy still need to be discussed.

The third possibility is that "three thirds" may legalize covert employment practices, causing more and more workers to be exempt from labor laws.

The "three thirds" not only exacerbates existing covert employment practices, but may even legitimize them. Hidden employment is a common phenomenon in the labor market, and this institutional arbitrage behavior arises with the emergence of labor laws and cannot be simply regarded as a loophole in the enforcement of labor laws. It can be imagined that once the criteria for determining the employment relationship of "third class workers" are established, platform enterprises can "openly" downgrade their original formal employees to "third class workers". In the long run, the scale of the 'third category of workers' will continue to expand.

Suggestions on Strengthening the Application of Current Labor Laws for Workers in New Business Forms

One is to keep up with the times and timely expand the scope of protection of labor laws.

The scope of application of labor laws should be revised in a timely manner to include "incomplete labor relations" as a special type. The main basis for determining labor relations at present is the "Notice on Matters Related to Establishing Labor Relations". This standard lacks specific definition and there is a lot of subjective judgment space; The legislative level is low and cannot be directly cited as a basis for judgment; It has been 18 years since its introduction, lagging behind the new changes in the labor market.

Therefore, it is necessary to moderately expand the scope of labor law protection and include "incomplete labor relations" in a special chapter to avoid equating "incomplete labor relations" with "de labor relations".

The second is to prioritize facts and return to the essence of employment in the determination of labor relations.

The "novelty" of new business models is nothing more than a change in the combination of market factors, but labor is still an indispensable part. In judicial practice, the employment forms of new business models are already complex. Overemphasizing the characteristics of new business models while ignoring their commonalities can lead to a large number of workers being misclassified. Some employers can induce workers to sign non labor contracts with them through various means to conceal the fact of labor employment. The principle of "written agreement priority" and the judicial practice of "emphasizing writing over facts" are not conducive to protecting the rights and interests of workers.

Therefore, we should return to the essence of labor employment, adhere to the principle of fact first, and judge the labor relationship of new industry workers based on the actual operation of rights and obligations in the labor process.

The third is classified discussion, based on labor obligations to determine the allocation of rights and interests.

Firstly, it is necessary to clarify which enterprises belong to platform enterprises and draw a clear boundary for identifying platform enterprises. It is not enough to simply regard all enterprises with information exchange connotations as platform enterprises.

Secondly, a list of platform enterprises should be formed and appropriately classified. Platforms that only play a role in information exchange and transaction facilitation should be regarded as autonomous platforms; If there is a deep involvement in order and labor operations, it should be regarded as an organizational platform, and multiple business lines on the same platform can have different employment models.

Finally, based on labor behavior rather than the identity of the worker, discuss the specific rights and benefits that workers in new forms of "incomplete labor relations" should enjoy. For example, if the risk of occupational injury is caused by labor behavior, workers should have the right to enjoy occupational injury protection. Treating the diverse labor subjects in the new business model as a flat whole for a one size fits all discussion is not conducive to deepening research and enhancing consensus, because using labor obligations rather than worker identity as the basis for expanding worker rights is more convincing. In addition, appropriate definition and classification also provide goals and guidance for labor supervision in the subsequent employment process of platform enterprises.

(Author affiliation: Wuhan University Social Security Research Center)