Chinese court rules firms cannot replace workers with AI

Advancements in Artificial Intelligence have led companies worldwide to lay off workers. However, in China, replacing employees with AI has been declared illegal for companies.

A court in Hangzhou issued a ruling in a case, stating that workers cannot be dismissed solely due to AI adoption.

Hangzhou is regarded as a major Chinese hub for AI development.

In its decision, the court stated that companies may only dismiss employees on solid legal grounds—not due to AI—and that reducing employees’ salaries on this basis is also unacceptable.

The case was filed by an employee of a technology company who had been dismissed without receiving adequate compensation.

The lawsuit also referenced other workers who lost their jobs due to AI implementation.

A lawyer involved in the case described it as highly significant in the current AI era, adding that companies must bear social responsibilities.

He stated that while technological advancement cannot be reversed, it must still operate within legal boundaries.

The court also emphasised that human workers need to adapt to technological progress and acquire training in line with the demands of the modern era.