By staff reporter Ren Bo

Implementation of China's new labor law in January was supposed to close the book on years of debate between trade union and employer groups over workplace rights.

Instead, the controversy has continued in the run-up to the release of the detailed rules for the Labor Contract Law, which a State Council legal arm is expected to publish soon.

The controversy has been around since the draft law was released for public comment in March 2006 by the Standing Committee of the National People's Congress. Within a month, the draft generated more than 190,000 recommendations through the Internet, media and mail.

Rarely does a draft law trigger such widespread reaction in China. But the wrangling isn't over.

The law includes clauses to protect employee rights and set strict measures for punishing employers in violation. The key question, however, is whether the law should “equally protect the legal rights of both employers and employees,” or “especially protect the legal rights of employees.”

On one side is the “protect workers” faction led by the All-China Federation of Trade Unions (ACFTU), and the Ministry of Human Resources and Social Security, which backs the law as a means of protecting employees. Taking an opposite stance are industries that support “employment freedom.”

Xie Lingmin, deputy head of ACFTU's law department, recently wrote that any labor law should help balance the unequal relationship between laborers and employers. Its goal should include promoting harmonious relations at an enterprise, which can provide a better internal environment for sustainable development of the business.

Xie also argues that only enterprises violating the law would suffer, since the legal rights of employers are already set by the Company Law, Enterprise Law and other legal measures.

Among the labor law's opponents, industry opinions have been contradictory. Enterprise representatives worry that rules favoring laborers will increase employment costs and lower the competitiveness of enterprises, thereby limiting future investment and hindering job growth.

One skeptic is Huang Mengfu, chairman of the All-China Federation of Industry and Commerce and vice chairman of the National Committee of China People's Political Consultative Conference. Under the labor law, he said, “medium and small private enterprises with meager profits cry for cost compensation. The impact is also huge for labor-intensive enterprises which used to contribute the most to labor employment in China.”

Huang has suggested striking a balance between strict and flexible labor policy, and gradually applying the law according to different situations and industries.

Sources told Caijing that the heated arguments have not had a major impact on the law, which officials acknowledge is technically incomplete because many key clauses have yet to be interpreted. For example, no specific rules define enterprises, pay standards and quotas. Some articles even contradict current policies, causing headaches for employers.

In fact, many enterprises are ignoring the new law, leaving authorities with no choice but to look the other way to avoid an overwhelming clampdown. Meanwhile, to attract investment, local governments are expected to loosen control of employment issues for enterprises.

Before the law can be fully implemented, detailed rules will be required from agencies including the Legislative Affairs Office of the State Council. But it remains unclear whether the details will resolve the conflicting opinions, and the gap between employers and employees.