An artificially intelligent robot demonstrates the work of a power grid control unit during a media-sponsored tour at the Guangdong Power Grid Robot Research Institute in Guangzhou, southern China’s Guangdong province, April 16.
Andy Wong/Associated Press
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Andy Wong/Associated Press
A court in the eastern Chinese city of Hangzhou, an AI hub, ruled in favor of a senior high-tech worker whose company replaced it with artificial intelligence (AI).
The decision has been hailed by legal scholars as a reassuring signal for worker rights protections as China’s central leadership pushes for widespread adoption of AI technology in industry.
The Hangzhou Intermediate People’s Court upheld a lower court’s earlier ruling that the technical worker’s dismissal was illegal.
“The reasons cited by the company for dismissal do not apply to negative circumstances such as business downsizing or operational difficulties, nor do they meet the legal conditions that make it impossible to continue the employment contract,” the court said in a published article.
At the heart of the case is whether companies can use AI replacements as an excuse to fire human employees.
The employee, identified by the court only by his surname Zhou, was employed as a quality assurance supervisor at a high-tech company in Hangzhou, Zhejiang province. The technology company was not named by the court. Zhou primarily used AI’s large-scale language models to verify the accuracy of answers generated for users.
Before the AI took over his job, Mr. Chou earned an annual salary of 300,000 yuan ($43,900). The company reassigned him, but his salary was cut by 40% and he was placed in a lower level position.
When he refused, the company terminated its contract with Chou, citing AI’s disruptive impact on jobs and reduced staffing needs.
Mr. Chou filed an arbitration claim seeking large compensation for unfair dismissal and won. The company disagreed and filed a lawsuit in 2025, but lost in local court. This time, he lost again on appeal.
The Hangzhou court also ruled that the alternative position offered to Mr. Zhou by the company, which involved a significant salary reduction, was not reasonable.
Wang Xiyang, a Zhejiang lawyer with no connection to the Hangzhou incident, said: said State news agency Xinhua said the introduction of AI does not automatically justify companies canceling labor contracts to cut costs.
However, as the Chinese economy continues to slump, corporate profits are under pressure. In addition to that, rising costs Due to the cost reductions brought on by the Iran war, companies will be looking for ways to further reduce costs.
The incident is one of several labor disputes arising from AI job substitution across Chinese cities.
Last year, a data mapping worker in Beijing was also replaced and fired by AI. won His case will be resolved through arbitration. The arbitration panel said the tech company’s decision to switch to AI was a business choice rather than the result of uncontrollable events.
The court ruled that the layoffs were illegal, arguing that the company was shifting the costs of technological change onto employees by terminating their contracts.
Jasmine Ling contributed to this report.
