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Division over the draft labour contract law between workers and employers has heightened this week, with the National People's Congress (NPC) already sorting through 4,800 responses to the law.

Employees said the law should put tougher restrictions on the use of corporate rules to axe workers, while employers, especially foreign companies, believe the participation of trade unions should be removed from the process of layoffs.

By yesterday morning, the Standing Committee of the National People's Congress (NPC) had received about 4,800 suggestions on the latest draft of the labour contract law, since it was publicized on NPC's website and in major Chinese media inviting public comment about the proposed law a week ago.

"The call to ban employers from using corporate rules to damage the rights of laborers has been widely put forward," Li Yuan, official of NPC Law Committee, said yesterday.

According to the draft, which still needs to be reviewed by the NPC before it becomes law, employers could terminate workers' labour contracts if they are found to be "severely violating" company rules.

But employees argued it could be used as an excuse for layoffs. They believe the law should state that the provision applies only when workers are aware they have broken the rules.

The law also needs to specify under what circumstances employees are "severely violating" these rules.

Employers, however, are concerned that their flexibility of firing might shrink if they have to consult trade unions or representative assemblies of workers, as demanded in the planned law, to make decisions for regular or economic layoffs.

There is also a dispute about whether the law should require companies to make severance payments to workers on fixed-term contracts if their contracts are not renewed.

Some people suggested the law ought to be expanded to cover employees at public- or government-funded institutions and individuals taking informal employment.

Presently, it only targets company employees and those working for privately owned businesses.

In addition, the public were concerned that employers were increasingly choosing to sign short-term contracts with workers.

It is also proposed that the probation period for new employees should be shorter, and more restrictions be put on defaulted wages and inadequate insurance.

The law is incorrectly widely understood to have been drafted by the All-China Federation of Trade Unions, but was in fact mostly drafted by the Ministry of Labor and Social Security, according to professor Jia Junling who was involved in reviewing the draft.

The planned law is set to provide workers with umbrella protection, especially when there is an unprecedented labor resource surplus in China.

(China Daily March 28, 2006)