A court in Hangzhou, China, has ruled that companies cannot fire workers just to replace them with artificial intelligence to save money. The decision protects labor rights as AI use grows fast in the country.
The case involved a tech worker named Zhou. He has worked as a quality assurance supervisor at an AI-related company in Hangzhou since 2022. His monthly salary was 25,000 yuan (about $3,640). Zhou checked AI outputs, matched user queries, and removed bad or illegal content.
When large language models took over parts of his job, the company offered him a new role with a big pay cut to 15,000 yuan. Zhou refused. The firm then ended his contract, calling it a restructuring. They offered some compensation, but Zhou took the case to arbitration and the courts.
The Hangzhou Intermediate People’s Court upheld earlier rulings that the dismissal was unlawful. Judges said adopting AI is a company’s own business choice. It does not count as a “major change in objective circumstances” under China’s Labor Contract Law. This law allows firings only in special cases like big company downsizing or real hardship. A big salary cut was also unfair.
Legal experts call this an important precedent. Companies can still use AI, but they must retrain workers, offer fair new jobs, or pay proper compensation.
The ruling came before International Workers’ Day and sends a clear message: progress should not leave workers behind. Similar cases in Beijing support this view.
