- Who gives instructions under each arrangement
- Why direct instructions risk disguised contracting
- Three things to sort out before choosing
- What to do in-house first
The short answer
The real difference between worker dispatch and a service contract is who gives the workers their instructions. Under dispatch, the company receiving the workers (the client) directs them. Under a service contract, the contractor directs its own workers. So do not decide by the label — "we need people, so dispatch; we want the job off our hands, so a contract." Work out three things first: what the work actually is, who will direct it, and who will run the site day to day.
The difference is who gives instructions
Japan's Ministry of Health, Labour and Welfare describes dispatch as an arrangement in which workers employed by a dispatch agency work under the direction of the client company. Under a service contract, the contractor manages its own workers and carries out the job, and the ordering company must not give instructions directly to the contractor's workers.
Both can look the same from the outside — people from another company working on your site — so they are easy to confuse. But who gives the daily instructions, who changes the order of tasks, and who manages attendance are completely different in the two arrangements.
The Ministry explains that if an arrangement is called a service contract but works like dispatch in practice, it is "disguised contracting" and breaches the Worker Dispatching Act. An ordering company that instructs the contractor's workers directly can end up in exactly that position.
Dispatch: people who work under your direction
With dispatch, the workers are employed by the agency, but their day-to-day work is directed by you. Your own staff can teach the tasks, set the day's priorities, and explain changes to a procedure in person.
That suits work whose content shifts from day to day, or work that sits in the same flow as your employees. The flip side is that you need someone to train and someone to give instructions. Taking people on before you have decided who will teach them tends to add to the load on the floor rather than reduce it.
If you use dispatch, check that the agency holds a licence for the worker dispatching business.
A service contract: handing over the job and its result
Under a service contract, the contractor owns how the work is done, including directing and managing the people who do it. What the ordering company decides is the job itself: what, by when, and to what standard.
Picture a warehouse where inspection and packing in one area are handed over as a defined zone with a defined scope. Under a contract, the contractor's supervisor decides the sequence and who stands where. If you want something changed, you tell that supervisor. You do not walk up to the contractor's workers and say "do this one first."
Put the other way round: if you cannot write down the scope and the finished standard of a job, it is hard to put that job under a contract.
Three things to sort out before you choose
1. Can the work be separated out?
List the tasks you have in mind and draw the boundary with everything around them. A task you can describe as "starts when the previous step is done, and is handed on in this state" is easy to separate. A task tightly interleaved with your employees' work is not.
2. Who will give the instructions?
Decide whether you want to direct the work day to day or only check the result. If you want to give detailed instructions yourself, a service contract does not fit.
3. Who will run the site?
Decide whether staffing positions, rotating breaks and covering for someone who suddenly cannot come in stays with you or goes to the other party. If it goes to them, give them enough scope and information to make those calls on their own.
| What you found | What to consider |
|---|---|
| The work is mixed in with your staff and you want to direct it | Look at dispatch |
| Scope and standard are clear, and you can hand over running it | Look at a service contract |
| Neither is clear | Divide up the work internally first |
What to do in-house before asking outside
Whichever route you take, the first requirement is making the work visible. Until you know who does what, and in what order, you cannot decide what to separate out or who should do the teaching.
Start by writing down, for the work you have in mind, the flow of a day, the tools and screens involved, and the points where someone has to make a judgement. Doing this sometimes shows that a change in who does what internally is enough, without going outside at all. We cover how to spot tasks that do not need a full-time employee in work your full-time staff do not need to do, and how to think about shortages that only hit in peak season in preparing for the busy season.
The Ministry publishes the criteria it uses to tell dispatch and service contracts apart, along with answers to common questions. Reading them once before you sign anything makes the conversation with the other party easier.
Summary
Dispatch and service contracts differ in who directs the workers. Under dispatch the client gives instructions; under a contract the contractor manages its own people. An ordering company that instructs a contractor's workers directly risks disguised contracting. Before choosing, sort out the work itself, who directs it, and who runs the site — then talk to a provider.
APOUL does not provide worker dispatch or contracting services. For an actual contract, please talk to a licensed dispatch agency or a contractor, or to the advice desk at your prefectural labour bureau. Dividing up work and writing down how it flows is something APOUL's consultation can help with (accepting requests from 1 November 2026). For questions that need a labour-law judgement, please consult a licensed labour and social security attorney (sharoushi).