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Chinese Court Rules AI Is Not Grounds to Fire Workers

The decision signals that judges expect companies to use reassignment or retraining rather than claim cheaper AI as a reason to dismiss staff.

Overview

  • The State Council publicized the Hangzhou judgment Thursday, highlighting a ruling that found an AI-based termination unlawful.
  • The case centered on a fintech worker surnamed Zhou whose tasks included matching user questions to large language models and filtering illegal or privacy‑violating content.
  • His employer started using AI for parts of the job, offered a lower role with less pay, and fired him after he refused the downgrade.
  • Zhou won at arbitration, trial, and appeal, and the court ordered more than ¥260,000 in compensation for unlawful dismissal.
  • Judges said using AI does not create the kind of “material change in objective circumstances” needed to end a contract, echoing a 2024 Guangzhou ruling and reinforcing a standard that curbs AI-driven layoffs.