In a landmark decision for the era of artificial intelligence and workplace automation, the Hangzhou Intermediate People’s Court has ruled that companies cannot dismiss employees solely because AI can perform parts of their jobs. The court upheld a labour tribunal ruling in favour of an employee whose role was partly automated by large language models, finding that automation alone does not constitute lawful grounds for termination.
The employee, surnamed Zhou, joined an AI-related company in 2022 as a quality assurance supervisor, earning 25,000 yuan per month. His duties included reviewing AI-generated outputs, matching user queries, and filtering illegal or inappropriate content to ensure accuracy. Over time, the company automated portions of his tasks and later attempted to reassign him to a lower-paid position with a 15,000 yuan monthly salary. Zhou refused the reassignment as unreasonable.
After his refusal, the company terminated him, citing organizational restructuring and reduced staffing needs, and offered compensation. Zhou contested the dismissal and the compensation through arbitration, which found the termination unlawful. The Hangzhou court upheld that decision, ruling that AI-driven job replacement does not amount to a “major change in circumstances” under China’s Labour Contract Law—a threshold required for lawful termination. The court also concluded the company failed to show the role had become impossible to perform or that the reassignment was reasonable.
The ruling aligns with other recent Chinese cases where courts held that AI replacement alone cannot justify dismissal, including disputes involving automated map data roles. The decision underscores legal protections for workers amid growing adoption of AI and automation in the workplace.
