A court in China has ruled that employers cannot use artificial intelligence as a justification for dismissing workers, in a significant victory for labour rights. The Hangzhou Intermediate People's Court delivered the ruling on Tuesday in favour of an employee at a technology company who was replaced by a large language model and subsequently fired after demanding better compensation and a higher position.
The worker, identified only as Zhou, was hired in 2022 as a quality assurance supervisor with a monthly salary of 25,000 yuan (£2,691). His role involved monitoring AI output and filtering illegal or privacy-violating content. However, after a large language model took over his duties, Zhou was demoted to a lower-level position with a reduced salary of about 15,000 yuan (£1,614). He was terminated after refusing to accept the demotion.
The company claimed it was undergoing organisational restructuring that reduced staffing needs and offered Zhou 311,695 yuan (£33,558) in severance, which he declined. An arbitration panel ruled his dismissal unlawful and supported his claim for higher compensation. The company then took the case to a district-level court, which also ruled in Zhou's favour, leading to an appeal to the Hangzhou Intermediate People's Court.
The court stated 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 of making it 'impossible to continue the employment contract.' The court published the ruling alongside a set of 'typical examples of protecting the rights of AI enterprises and workers.'
