Sun added that a contract without specific time limits would also help employees feel more attached to their companies and do no harm to employers.

Despite terms of compensation set for contract dismissal by the employers, "the cost of this law is actually very limited," Sun said.

But those who had minimized the cost through illegal employment practice, such as refusing to pay for employees' social insurance, will now "pay much more", said Sun.

In response to claims that the new law will frighten away investment, Sun stressed that improved labor relationship will help improve the investment environment and also employment. "It won't affect the investment environment. On the contrary, it will improve it," said Sun.

But Sun, who has been conducting surveys on the new labor contract law's implementation during the first three months, said that actually there had been some resistance in implementation.

"Some employers misread the law and try to steer clear of it," Zhang Mingqi, deputy president of the All-China Federation of Trade Unions (ACFTU) and member of the top political advisory body CPPCC, said on the weekend.

In one instance, the Guangdong-based Huawei Technologies Co Ltd, China's telecom network equipment giant, made headlines for its controversial "voluntary resignation" scheme late last year.

In a bid for more forceful implementation of the new law, Sun said the government would soon map out detailed codes, relevant judicial explanations and government supplement regulations in addition to enhancing supervision from the relevant labor departments and media.