The country's top legislature yesterday reviewed the second draft of the
controversial labour contract law but decided not to vote on it.
The eight-chapter draft that details the establishment, revocation, revision,
and termination of labour contracts will be the first such law of its kind if
passed by the Standing Committee of the National People's Congress (NPC).
However, disagreements between representatives of employees and employers
have slowed the legislative process, and lawmakers decided not to vote on the
draft at this session pending more amendments.
The current draft made key changes to the first draft submitted last December
in clauses regarding probationary period, retrenchment and compensation for the
termination of contracts.
It requires the probation period to be no more than one month for a one-year
contract; and not exceed six months for a contract for at least three years.
Companies that lay off more than 20 employees at one time because of
bankruptcy, production or management difficulties, or relocation for
environmental protection, have to inform the trade union or the staff 30 days in
The draft leaves the terms of compensation for contract termination to be set
by State Council regulations. Should there be an agreement between the employer
and senior staff on the period the employee cannot work for competitors after
leaving, it cannot be more than two years, the draft says.
Tian Chengping, minister of labour and social security, said during the
draft's first reading that the existing labour contract system, set up in line
with the Labour Law enacted in 1994, requires an update following dramatic
changes in the labour market.
A lack of minimal labour protection and the imbalance between labour supply
and demand have resulted in severe infringements of workers' rights. Millions of
foreign and domestic employers arbitrarily set wages and working hours, as well
as working and living conditions.
The NPC received 191,849 public suggestions in one month after the draft was
published in March for consultation. Only the Constitution, in 1954, received
Some employers, fearing rising labour costs, strongly oppose the bill.
However, Xin Chunying, deputy director of NPC's Law
Committee, yesterday said members agree that it is urgent to have a contract law
to protect workers' rights as it is a matter of public interest and social