Ivan Hu, working at one of Wal-Mart's global purchasing centers in Shanghai, recently received a surprising notice terminating his labor relationship with Wal-Mart as of November 30.

Hu is not the only unfortunate one. Wal-Mart's recent purchasing center layoffs are leading some to question whether the company is avoiding obligations it faces under an upcoming Chinese labor law.

According to a report from the 21st Century Business Herald, a Guangzhou-based paper, purchasing centers in Shenzhen, Shanghai, Putian, Dongguan all issued similar layoff notices the same day. The reason, according to Roger Lee, a manager in the retail giant's Shanghai branch, is its business slowdown, and surging costs this year.

Tomas Young, another manager from the quality assurance department, said there is no "principles" such as work experience, performance levels, or skills behind the layoffs.

It is suspected that Wal-Mart's move is aimed at eluding the Law of China on Labor Contracts, effective starting next year. In order to protect employees' legal interests, the law restricts employers from sacking staff at discretion.

"Even in view of the current labor laws, Wal-Mart's acts don't seem totally justifiable, at least in terms of implementation sequence, a senior lawyer specializing in labor laws told the newspaper.

According to the Law of Labor Contract of China, employers may revoke a labor contract only if the employee loses work ability due to illness or injury, or becomes unqualified for the work even after training or post adjustment, or if the objective conditions taken as the basis for the contract have greatly changed. In addition, the laborer must be given written notification 30 days in advance.

Wal-Mart, however, denied accusations it was sidestepping the labor law, saying the cut had been planned a long time ago and was just implemented recently.

"In fact, the layoff in China is part of Wal-Mart's global restructuring plan to adapt changes of the purchasing situation. Around 100 employees in the company's purchase department in China will be discharged," Dong Yuguo, Wal-Mart's chief of public relations in China told the Beijing Times on Sunday.

"However, not all dismissed will leave Wal-Mart." Dong added, "Some may return to work after a post adjustment. And the layoff plan does not involve our supermarket department in China. Therefore, nearly 100 Wal-Mart supermarkets, shopping malls, and Sam’s Clubs in China will not be affected."

Dong also denied reports that Wal-Mart is to reduce its purchases in China, saying relevant speculations are groundless.

Labor conflict is nothing new for Wal-Mart in China. Several years ago, the company was criticized for being unwilling to set up labor union. Although some of its operation in China is now unionized, to date there are no labor unions in Wal-Mart’s purchase department in China.