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Chinese courts back workers dismissed after AI replaces their jobs
In one Hangzhou case, an arbitration panel ruled the termination illegal after the worker declined a reassignment tied to a 40% pay cut.
Chinese courts have ruled in favor of workers dismissed after AI took over job functions, underscoring how China’s labor law differs from US protections, according to Yahoo Finance. In a case in Hangzhou, a worker identified by his surname, Zhou, was laid off from a tech firm where he had been verifying the accuracy of large language models. The company ended his contract after he declined a reassignment to a lower-level role with pay reduced from 25,000 yuan ($3,640) per month to 15,000 yuan ($2,224), and an arbitration panel awarded additional severance.
The tech firm sued in Hangzhou district court in August 2025, but it lost. It also lost an appeal in April 2026.
Yahoo Finance also notes other similar rulings, including a Guangzhou court upholding a lower court decision that a graphic designer was illegally dismissed when AI took over his work. Under China’s Labor Contract Law, courts require employers to show termination was due to a major change in objective circumstances, and in the Guangzhou case the company’s attempt to reassign at a lower salary was treated as evidence the firm still needed the skills, the outlet added.