The Legal Affairs Office of the State Council published draft regulations for the implementation of the Labor Contract Law on Thursday to solicit public opinion.

The most noteworthy aspect of the draft is its specifications of the open-ended term of the labor contract for employees who have completed two fixed terms of contact or served more than 10 years under their employer.

The specifications clarify that a labor contract with an open-ended term can still be terminated under at least 14 circumstances, such as the employee seriously violating company rules or not being competent enough for the job even after being trained. Employers can also dismiss their employees when they encounter serious economic problems or experience unforeseen circumstances that effectively invalidate the contracts they have with employees.

These regulations will help clarify any misinterpretation of the open-ended labor contract stipulation in the law that took effect from January 1 this year.

Officials have reiterated that such a contract is not meant to restore the iron-rice-bowl system of job security provided under the planned economy of the past. But some employers still believe labor contracts with an open-ended term will make their management of human resources rigid.

The message from the draft regulations is that a labor contract with an open-ended term will not bind the hands of an employer to terminate such a contract, as long as it has enough reason to do so.

Such a contract is only meant to build a harmonious relationship between employers and employees and guarantee that those who have made due contributions to their employers will be able to enjoy a relatively stable relationship with their employers.

It is different from the iron-rice-bowl system, which used to cover everything for an employee in a State-owned firm under the planned economy 30 years ago.

Aware of the demerits of the indiscriminate welfare system, which led to laziness and dampened the enthusiasm of diligent employees, we have tried hard to break out of such a deficient system by restructuring our economy in the past three decades.

Yet, we will never allow heartless employers to infringe upon the legitimate interests and rights of their employees in their efforts to seek maximum profits.

It is the duty of a government to regulate the relationship between employers and employees, usually in favor of employees because they are the weaker party. Yet, the legitimate rights and interests of employers will also be protected. The new regulations try to strike a balance between the two.

(China Daily 05/10/2008 page4)