The mainland's controversial labour contract law has not only sparked tensions between workers and their bosses in a country dubbed the factory of the world, it has also provoked unprecedented grumblings at the top of the Chinese political system - a sign that the welfare of workers has moved firmly up the agenda. The law, which was introduced in January, means the end of the road for the nation's previously loose labour regulations, which allowed employers to exploit workers in low-paid factory jobs. The new law requires bosses to sign long-term contracts with their workers, abide by restrictions on overtime and boost welfare provisions. The new regime has been met with yelps of pain from employers and warnings it will force many of them to the wall because of the increased hiring costs. But Beijing is determined to press ahead with the law despite opposition from some of its closest supporters and criticism that lawmakers have not given proper guidelines on how the new regulations should be implemented. Amid the diligent rubber stamping of rules at the annual parliamentary meetings in the Great Hall of the People last week, there was an unusually bitter exchange between supporters and opponents of the law. There were clashes over the law during the first annual plenary session of the Chinese People's Political Consultative Conference, a top government advisory body, with many delegates hailing proposals to scrap some terms of the legislation. Amid the more vocal opponents were delegates representing Hong Kong's capitalists, whose factories in the Pearl River Delta are already suffering from an appreciating yuan, higher environmental costs and the loss of export incentives. The powerful All-China Federation of Industry and Commerce has also thrown its weight against the law, warning of increasing labour disputes and the demise of manufacturers and service providers. While the intention of the law is to upgrade the rights and responsibilities of both workers and employers by binding the two parties to a black and white agreement, there have been complaints it favours the labour side too much. Zhang Yin, chairwoman of Nine Dragons Paper (Holdings) and a delegate to the CPPCC, called for the scrapping of the provision allowing employees to pursue open-ended contracts in the law, arguing it gave them an 'iron rice bowl' - a job for life. Dubbed the country's richest female entrepreneur, Ms Zhang's comments provoked sweeping criticism in internet chat rooms, with claims she was putting her personal interests ahead of the nation's. Nine Dragons, one of the world's biggest paper making and recycling firms, has about 8,000 workers around the mainland. Ms Zhang was also criticised for 'speaking for the rich', an accusation she denied. She also suggested lowering the tax burden for the rich by reducing the tax rate for individuals earning more than 100,000 yuan (HK$110,000) a month. To CPPCC delegate and labour rights activist Kong Xianghong, the head of the Guangdong Federation of Trade Unions, Ms Zhang's proposal was an affront. He challenged her by initiating an open forum on the labour contract law. Meanwhile, three other CPPCC representatives - migrant workers from Guangdong, Shanghai and Chongqing - marched into the Great Hall with proposals calling for even greater labour welfare. The trio, who garnered support from the All-China Federation of Trade Unions, joined calls opposing revisions to the law. With tensions high, senior officials moved to hose down the debate by trumpeting the government's line. 'It is not a matter of revision but a matter of full enforcement,' Labour and Social Security Vice-Minister Sun Baoshu said. The central government's non-negotiable stance on the issue pours cold water on the hopes of about 60,000 Hong Kong factory owners in the Pearl River Delta who are desperate to have the law either amended or postponed. Already being punished by rising competition, inflated raw material and energy prices as well as stiffer pollution controls, manufacturers say the labour contract law will add to their financial burden. Hong Kong Small and Medium Enterprise Association president Simon Shi Kai-biu said the new labour regime had been responsible for at least 10,000 factories closing down or moving out of the Pearl River Delta in the past few months. State statistics show there are about 90,000 factories in the delta region, of which nearly 60,000 are Hong Kong-owned. A survey by the Federation of Hong Kong Industries last month showed about 60 per cent of entrepreneurs wanted to wait and see what impact the law would have on their business before deciding what to do next. 'The law has put more pressure on factory owners,' federation deputy chairman Stanley Lau Chin-ho said. He said that the law added to a growing number of negative factors for manufacturers across the border, the latest being the post-snowstorm electricity supply crunch. Rising tensions and the confusion over the law have surprised some as the tighter regulation of the labour market had been well flagged. From drafting to its final approval at the State Council, the law was years in the making. Beijing's failure to spell out how the law should be implemented has been blamed for much of the impasse. More than three months after the nationwide rules came into effect, a clear set of implementation details for employers remains elusive. 'It leaves interpretation of the law to bosses, workers, lawyers and middlemen agencies,' said Priscilla Leung Mei-fun, a lawyer and associate professor of law at City University. 'While the market has been waiting for documents [on the implementation], head-hunting agencies and middlemen are spreading wrong messages to workers, creating misunderstandings and unnecessary fears.' CPPCC delegate He Rongzhi, the head of Chongqing Cygnet Group, which runs Little Swan hot-pot restaurants, said the new labour legislation was a vague legal blueprint that was still awaiting interpretation guidelines. Still, she had attempted to follow the rules - in the process incurring an extra 13 million yuan in expenses for 20,000 payrolls at the restaurant and property group. 'The implementation guidelines should be made public as soon as possible,' Ms He said. 'There are parts of the rules that employers and employees interpret differently.' In an attempt to address the most controversial part of the law - the open-ended employment provision - National People's Congress spokesman Jiang Enzhu denied it was an iron rice bowl. He said the contract could be cancelled when employees were no longer physically fit for work or breached certain rules. But Mr Jiang's explanation still leaves many questions. For example, capping overtime at 36 hours a month, or 1.5 hours a day, has caused problems for companies working to fill orders during peak shipment seasons. Toy and apparel manufacturers said the rule disrupted their production schedules and forced them to expand payrolls, jacking up labour expenses. The Textile Council of Hong Kong, which represents 11 textile and garment associations, said requirements that companies set aside a reserve for compensation would lift labour costs by as much as 40 per cent. This is not to mention additional costs for expanded welfare coverage on medical, accidental insurance and severance payment. The law also raises the barrier for companies wanting to lay off staff, requiring employers to discuss with, and inform, labour unions 30 days in advance of any plans to dismiss more than 20 staff, or 10 per cent of a company's workforce. 'This lacks flexibility,' Mr Lau argues. While Beijing's aim is to bring long-term harmony between employers and employees, the government has a lot of ground work to do before it is anywhere close to achieving that.