BEIJING, 12 May. - (ANA) - Chinese courts have ruled that companies cannot terminate employees simply to replace them with Artificial Intelligence (AI) systems, establishing a legal principle that puts the cost of technological transformation on employers rather than workers.

 

The most recent ruling came from the Hangzhou Intermediate People's Court, which upheld a finding that a tech firm had illegally fired a quality assurance worker identified only as Zhou after he refused to accept a demotion triggered by AI automation.

 

At 25,000 yuan ($3,640) a month, his job centered on verifying whether large language models were producing accurate results. Once the company concluded that its AI systems had made Zhou's position redundant, it moved to slot him into a lower-level role paying 15,000 yuan, stripping away 40 percent of his income. Zhou rejected the offer, and his employer responded by ending his contract. Every venue that heard the dispute ruled against the company and awarded Zhou compensation.

 

The Hangzhou court suggested that if companies need to restructure because of AI, they should focus on retraining employees for jobs that require human judgment. Any new role offered should also come with fair pay.   - (ANA) -

 

AB/ANA/12 May 2026 - - -