A worker's dismissal due to AI was deemed unlawful by a court in China.
In China, replacing workers with AI is not a legal reason to fire staff. The Hangzhou Intermediate People’s Court ruled in favor of an employee who lost his job to AI.
Unlawful Contract Termination
Worker Zhou's employment contract was terminated after he refused a lower position with a 40% pay cut due to being replaced by AI. Zhou had worked as a quality assurance supervisor for an unknown tech company since November 2022, monitoring AI output for harmful and illegal content. The company cited reduced staffing needs and the impact of AI as reasons for the dismissal. Zhou has decided to take the case to court.
No Dismissal Due To AI
The court ruled in his favor. The replacement violated China’s Labor Contract Law. The court stated that the reason for termination "did not fall under negative circumstances such as business downsizing or operational difficulties, nor did it meet the legal condition that made it 'impossible to continue the employment contract.'"
The company's adoption of AI was deemed unnecessary and a "voluntary move to stay competitive", which made Zhou’s contract termination unlawful.
The lower-paid position offered to Zhou was also deemed unreasonable due to the significant salary reduction.
Legal experts have praised the court’s decision, claiming that it reinforces the idea that companies cannot lay off staff due to AI adoption. The court’s ruling signals protection of labor rights in China, where AI technology adoption is spreading quickly.
This case adds to the growing list of labor law disruptions due to AI-related dismissals in China. In 2025, there had already was a similar case and the court ruled in the worker’s favor.
