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Chinese Court Orders Compensation for Worker Replaced by AI
The court said AI adoption is a business choice, not a legal basis for ending contracts, and upheld compensation for the wrongfully dismissed worker.
The Hangzhou Intermediate People's Court ruled that a tech firm's dismissal of a worker identified as Zhou was illegal after the company replaced him with artificial intelligence.
Before artificial intelligence took over his role, Zhou earned an annual salary of 300,000 yuan ; the company then reassigned him to a lower-level position with a 40% pay cut, which he refused.
The court ruled that the company's termination grounds "did not fall under negative circumstances such as business downsizing or operational difficulties, nor did they meet the legal condition that made it 'impossible to continue the employment contract.'"
Zhejiang lawyer Wang Xuyang told state-run news agency Xinhua that artificial intelligence adoption does not automatically justify terminating labor contracts to cut costs.
Last year, a data mapping worker in Beijing who was replaced by AI won his case through arbitration, and similar labor disputes are now rising across China as industries adopt new technologies.