A court in China has ruled that employers cannot use artificial intelligence as a justification for terminating employees, marking a significant victory for labour rights in the country. The Hangzhou Intermediate People’s Court delivered its verdict on Tuesday in favour of a worker identified only as Zhou, who was hired in 2022 as a quality assurance supervisor for a technology company but was replaced by a large language model and subsequently dismissed after demanding better compensation and a higher position.
Case Details
According to details published by the court, Zhou was employed with a monthly salary of 25,000 yuan (£2,691) to monitor AI output and filter out illegal or privacy-violating content, as reported by Xinhua. However, after a large language model took over his duties, Zhou was demoted to a lower-level role with a reduced salary of approximately 15,000 yuan (£1,614). When he refused to accept the demotion, his contract was terminated.
The company argued that it was undergoing organisational restructuring, which reduced staffing needs, and offered Zhou 311,695 yuan (£33,558) in severance pay. Zhou rejected the offer and took the case to an arbitration panel, which ruled his dismissal unlawful and supported his claim for higher compensation.
Legal Proceedings
The company then challenged the decision at a district-level Primary People’s Court, which also ruled in Zhou’s favour. Undeterred, the company appealed to the Hangzhou Intermediate People’s Court. Last week, the court upheld the previous rulings, stating that the grounds for termination cited by the company did not fall under negative circumstances such as business downsizing or operational difficulties, nor did they meet the legal condition that made it ‘impossible to continue the employment contract.’
The court emphasised that using AI is not an excuse to start shredding job contracts. It published the ruling alongside a set of “typical examples of protecting the rights of AI enterprises and workers,” aiming to provide guidance on balancing technological advancement with labour protections.
Implications
This landmark decision sends a strong message to employers in China’s rapidly evolving tech sector that AI-driven automation cannot be used as a pretext for unfair dismissals. Labour rights advocates have hailed the ruling as a crucial step in safeguarding workers’ interests amidst the rise of artificial intelligence, which has increasingly been deployed to replace human roles across various industries. The case also highlights the importance of legal frameworks in ensuring that technological progress does not come at the expense of employee rights.
