Some consulting firms have capitalized on concerns and developed Labor Contract Law guidebooks.

For example, the China Labor Disputes Net (www.btophr.com) has published a guidebook priced at 1,880 yuan that recommends strategies on drafting employment contracts, collective agreement, contract termination, compensation issues, trade secrecy, and legal liabilities of various parties.

A spokesperson for the firm that authored the guide reveals that sales were "encouraging" and that the firm has received "positive response" from employers, but declined to comment further.

Apart from sourcing experts' opinions, personnel in the human resource management have started using online forums as a platform to share strategies and exchange ideas in dealing with the law.

The 40,000-member strong ChinaHR forum (www.zhongguohr.com) is a hive of such activity, swelling with both questions and suggestions.

One of the hot topics on the forum concerns a provision of the law obliging employers to enter into an unlimited-term employment contract with workers who have served under two fixed term contracts.

After analyzing the above clause, one member of the forum laments, "Japanese-invested firms usually sign a one-year fixed term contract with employee. That means after two years, the company must decide to offer an unlimited term contract or to call off the employment. Two years is too short to monitor and assess quality worker."

The member suggested that companies in similar positions offer a longer fix-term contract to delay the obligation and gain more time to properly assess workers. For example, a three-year fixed term instead of a one-year contract, could delay the need for an unlimited-term contract from year 2010 until 2014.

On the issue of economic compensation, another member points out, "Upon the expiry of an employment contract, if the employer refused to renew the contract, a sum of compensation to the worker concerned is required, unless the worker has explicitly expressed his or her intention not to resume the contract. This clause in the law has led to higher employment cost for employer."

The member cautioned human resource personnel to obtain written acknowledgement from workers, who agreed not to resume employment contract, in order to protect employer from making compensation.

Checks and Balances

Lawyer Duan Wei says based on his sessions with clients in the past months, foreign firms proved to have more initiative in keeping abreast with the law. That is partly due to higher legal awareness among foreign investors and tighter scrutiny placed on them because of their foreign-invested status.