Companies cannot fire workers to replace them with AI, China courts rule
Chinese courts have ruled that companies cannot fire employees to replace them with artificial intelligence, setting a significant precedent for labour rights. The ruling stated that integrating AI is a business strategy and does not qualify as a legally binding objective major change that justifies voiding labour contracts.
Chinese courts have ruled that companies cannot legally fire employees to replace them with cost-saving artificial intelligence. A tech company attempted to reassign an employee, Zhou, and cut their pay from 25,000 yuan to 15,000 yuan, citing AI advancements. When Zhou rejected the pay cut, the company fired them, but the court deemed it an illegal termination. The court advised companies to prioritise retraining staff for more advanced roles if AI restructuring is necessary. The Hangzhou Intermediate Court upheld the original verdict, stating that AI should be used to liberate labour and promote employment. Companies must safeguard employees' legal rights during tech-driven transitions.
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