While workers in the West struggle with the impending end of jobs, workers in China are winning a bitter legal battle against AI automation.
Last week, according to national television, Xinhua News Agencya Chinese court ruled that companies cannot use AI as an excuse to fire workers. The case involved a quality assurance supervisor, identified only by his last name Zhou, who was hired in 2022 to oversee the technology company’s AI output. When his bosses tried to replace him with a large language model (LLM) in 2025, they offered him a demotion with a 40 percent pay cut.
Naturally, Mr. Chou refused, so the company fired him and offered him a severance package worth about $45,000. Dissatisfied with his meager compensation, Mr. Chou challenged the offer of severance pay through a government arbitration panel.
After that committee ruled in Mr. Zhou’s favor on the grounds that the dismissal was illegal, the company filed a lawsuit in a lower court, likely the district-level Primary People’s Court. After losing the case, the company appealed to the city-level Hangzhou Intermediate People’s Court, which upheld the lower court’s decision on the grounds that the introduction of AI was not a pretext for starting to break employment contracts.
The court translated the statement and said, “The reasons for dismissal cited by the company do not apply to negative circumstances such as business downsizing or management difficulties, nor do they meet the legal conditions that make it impossible to continue the employment contract.” NPR.
“Technological progress may be irreversible, but it cannot exist outside the legal framework,” said Wang Shuyan, a lawyer at Zhejiang Xingjing Law Office. Xinhua News Agency.
It is important to note that unlike countries like the United Kingdom and the United States, which follow a common law system, China follows a civil law system. If so, it is not decision to look at In China, a legal principle that requires U.S. courts to follow precedent set by other courts.
Still, the move is seen as a major victory for Mr. Zhou and a soft sign that while workers in many parts of the Western world remain largely self-reliant, China’s judiciary and, by extension, global lawmakers may be preparing to protect workers from the threat of AI-driven automation and austerity.
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