Lawmakers will read the controversial draft labor contract law for the third time next week - taking it a step closer to approval.

The Standing Committee of the 10th National People's Congress (NPC), the top legislature, yesterday announced that it will hold its 27th meeting from Tuesday to Friday, during which the third draft of the law would be discussed.

The Legislation Law stipulates a draft law goes through three readings before being forwarded for voting. The labor contract law will probably be voted upon and passed next week.

If so, it will become the first law to detail the signing, revocation, revision and termination of labor contracts in the country.

It is not clear whether the third draft will have any major amendments. The existing draft, or the second, differs a lot from the previous one.

For example, the existing draft says employers should "discuss with" - instead of "seek approval from" - the trade union or employees' representatives while making decisions that would directly affect the rights and interests of employees.

The existing draft also leaves the terms of compensation for contract termination to be set by State Council regulations.

As the draft focuses on the protection of the rights and interests of employees, it is believed it could lead to rising labor costs.

There has been heated debate over the draft law since its first reading at the end of 2005, casting a shadow over its approval.

Official figures show that the NPC received about 192,000 public responses in the month after the draft was published last March for consultation. Only the Constitution, in 1954, received more.

The opponents include employers from overseas. Both the European Union Chamber of Commerce in China and the American Chamber of Commerce in Shanghai (AmCham Shanghai) submitted letters to the NPC last year, suggesting that the law might have a negative influence on foreign investment in China.

AmCham Shanghai also raised concerns about whether the "vague" and "impractical" standards in the draft could be implemented, according to a letter it sent to China Daily yesterday.

Disagreements exist among drafters as well. One side, represented by Chang Kai, a labor law professor at Renmin University of China, suggests that the law give more protection to employees, as they're in a weak position compared with employers.

Dong Baohua, a labor law professor at East China's University of Politics and Law, represents the other side, which thinks it important to strike a balance among the interests of employees, employers and the government.

It is believed that these disagreements directly resulted in the revision of the first draft, and it's not sure whether they will slow the legislative process again.

However, Minister of Labor and Social Security Tian Chengping said during the draft's first reading that the existing labor contract system, set up in 1994, requires an update following dramatic changes in the labor market.

He said it's imperative to have a new law to end and prevent infringements of workers' rights.

(China Daily April 17, 2007)