Overview
- The Hangzhou Intermediate People’s Court, which published its decision Tuesday, upheld earlier findings that a tech firm unlawfully fired a supervisor after trying to replace his work with large language models.
- The employee, surnamed Zhou, was offered a demotion with a 40% pay cut after AI absorbed his tasks, refused the move, and then won arbitration and court rulings that the dismissal was illegal.
- Judges rejected claims of a “major change in objective circumstances,” said the lower‑paid role was not a reasonable reassignment, and stressed employers must pursue reassignment or retraining before any termination.
- Legal commentators say companies now need stronger documentation of restructuring and “genuine negotiation,” and wrongful AI-based dismissals can lead to added compensation or even reinstatement.
- A prior Beijing arbitration case involving a map data collector reached the same conclusion and was published as a typical ruling in December 2025, and coverage notes parallel debates in India about whether existing labor rules and a proposed AI bill will impose similar limits.