What is the difference between employment and hiring?

2023-08-07

The Difference Between Employment and Hiring

Employment and hiring are not the same concepts. An employment contract is an agreement under which one party provides labor services to another for a specified or indefinite period, and the other party compensates them as agreed. An employment contract is a type of labor contract that establishes the rights and obligations between the employer and the worker.

1. Differences Between a Labor Contract and an Employment Contract

(1) Nature of the Contract

A labor contract is an agreement where a hired person provides services to an employer.
An employment contract establishes a labor relationship between the employer and the worker.

(2) Purpose

A labor contract aims to supply labor services, focusing on the ownership and control of the worker.
An employment contract centers on the worker as a person and integrates them as an internal member of the employer.

(3) State Intervention

A labor contract results from mutual consensus with minimal state intervention.
An employment contract involves more state intervention, including specific regulations on procedures, employer obligations, working conditions, labor protection, minimum wage, and contract termination, prioritizing worker protection.

(4) Subjects and Relationships

In a labor contract, one party is the worker, and the other is the employer, which must be a legal entity or organization. The worker’s labor must be highly subordinate to the employer.
In an employment contract, the agreement can exist between a citizen and an employer or between two individuals. The worker does not necessarily become an internal member of the employer. The scope of services in employment contracts is broad and regulated by law.

(5) Legal Regulations

A labor contract is governed by the Labor Contract Law.
An employment contract falls under civil law regulations.

(6) Dispute Resolution Procedures

Disputes in a labor contract require arbitration before judicial intervention. The resolution follows the Labor Law and Labor Contract Law, ensuring compliance with legal procedures for contract termination.
Disputes in an employment contract can go directly to court and are handled under civil law. There is no mandatory arbitration, and either party can dissolve the employment relationship at any time.

2. Labor Relationship vs. Employment Relationship

A labor relationship refers to the legal relationship where a worker provides one-time or specific labor services to an employer in exchange for agreed compensation. In contrast, an employment relationship involves an employee accepting the employer’s direction and providing labor services for a specified or indefinite period while receiving payment.

However, the legal concept of "employment relationship" has been abolished, with only "labor relationship" being recognized in law. According to Article 1192 of the Civil Code:

If a labor relationship is established and the worker causes damage to a third party, the employer bears tort liability.
After the employer compensates for damages, they may seek reimbursement from the worker if the damage was caused intentionally or through gross negligence.
If the worker is injured while providing labor services, both parties bear responsibility based on their respective faults.

3. Differences Between Labor Relations and Labor Service Relations

(1) Contractual Form

Labor relations are formalized through written labor contracts.
Labor service relations can be established through written, oral, or other agreements, covering temporary workers.

(2) Basis of the Relationship

Labor relations stem from the integration of production factors between employers and workers.
Labor service relations rely solely on mutual agreement between the parties.

(3) Subject Qualifications

In labor relations, the employer must be a legal entity or organization, while the worker must be an individual.
In labor service relations, both parties can be individuals, organizations, or legal entities.

Temporary workers are usually seasonal employees hired for short periods (less than a year). Under current labor laws, labor contracts should be signed with temporary workers to clarify their rights and obligations, ensuring legal protection. Employers should formalize temporary employment through labor contracts to safeguard both parties’ rights.

If you want to know more information, please feel free to contact GEOR abroad hiring agency.

Relevant Legal Basis

Article 2 of the Labor Contract Law of the People's Republic of China applies to labor relationships between enterprises, individual economic organizations, private non-enterprise units, and other organizations within China. It governs the formation, performance, modification, and termination of labor contracts. Labor relations within government agencies, institutions, and social organizations are also subject to this law.