We have known for a long time that employers all over China use the employment agency (劳务派遣) system to avoid signing labour contracts, reduce costs and generally ride roughshod over workers’ rights.

However, a recent civil case in a Nanjing district courtroom has revealed just how flagrant the abuse of the employment agency system has now become. One employer, a local government department no less, tried to avoid censure for its discriminatory hiring practices by claiming that its employment agency was to blame.

The Nanjing Municipal Bureau of Human Resources and Social Security was being sued for employment discrimination [2] by a graduate from out of town after it placed a recruitment advertisement stipulating that only Nanjing residents could apply. The bureau apparently did not contest the fact that the advertisement was discriminatory, it simply stated that the ad had been placed by an employment agency, and that the agency was the legally responsible employer.

The plaintiff in this case has now decided to sue the employment agency as well as the government bureau, so she might yet get justice. But clearly, when employers assume they can use the employment agency system to pass the buck after engaging in blatant discrimination, something is very wrong.

The Chinese government knows there is a problem. Labour relations have become corrupted over the last few years by the agency system, and the government is trying to fix the problems with more legislation. On 1 July 2013, it revised the Labour Contract Law with the specific intent of plugging loopholes related to employment agencies in the original 2008 law. And now, the government has drawn up new Employment Agency Regulations [3], which are supposed to regulate the system further.

There is of course a need for regulation, but merely tinkering with the law without actually enforcing it is creating far more problems than it solves. Currently, the laws and regulations on employment agencies are simply ignored and there is a danger that this lack of compliance will effectively normalize the widespread abuses of the system in China. If the use of agency labour is allowed to expand even more, it could eventually replace the system of formal employment contracts it was supposed to merely supplement.

A group of labour organizations, activists and workers is now urging the government to get back to basics and re-establish the primacy of direct employment contracts (signed by the employer and employee only) and ensure that employment agencies are only used for their original intended purpose; namely the supply of temporary, auxiliary and substitute labour.

In a letter to the Ministry of Human Resources and Social Security [4] signed by more than 100 workers and labour groups, they point out that only when workers are actually workers (with a legally binding employment contract) can they stand up for their rights. The use of agency labour deliberately clouds the employment relationship and turns workers into “non-workers.”

However, the writers also point out that providing adequate legal protection for employees is only the first step in promoting healthy labour relations. Even the best legislation cannot resolve every single issue in the workplace. It is essential therefore that workers also have the right and the ability to collectively bargain with the employer in order to establish mutually acceptable wages, benefits and working conditions.

And again, collective bargaining can only work effectively if the workers are actually employed by the employer rather than by some largely fictitious third party, as is often the case today. The way ahead is simple, and is summed up perfectly by the title of the workers’ letter:  Promote collective bargaining, phase-out agency labour and straighten-out labour relations.