Khaberni - The Hangzhou Intermediate People's Court in China has issued a striking judicial ruling, affirming the illegality of terminating employees under the pretext of replacing them with artificial intelligence technologies. This represents a legal precedent in dealing with the challenges posed by artificial intelligence to job security, reshaping the relationship between technology and the law in the workplace, according to observers.
Case Details.. A Conflict Between Automation and Employment Contracts
The case, according to Bloomberg, follows a legal dispute brought by a tech company against one of its employees, who held the position of quality assurance supervisor.
The crisis began when the company integrated massive language models to automate tasks previously performed by the employee, then informed him of a decision to transfer him to another position with lower financial benefits. When the employee refused this settlement, the company terminated his contract, citing "restructuring" and "changing operational circumstances".
In detail, reports explain that the employee "Zhou" had joined a tech company in Hangzhou in November 2022, where he held the position of quality assurance supervisor. His work was at the core of interaction between humans and artificial intelligence, responsible for reviewing responses from massive language models, ensuring the accuracy of information, and filtering any illegal content or privacy violations to ensure secure and precise AI outputs. His monthly salary was 25,000 yuan (approximately 3640 US dollars).
However, as the capabilities of the language models within the company developed, the algorithms became capable of automatically performing the tasks that "Zhou" was responsible for. Instead of investing in retraining him or transferring him to a position equivalent to his status, the company decided to cut costs by offering him a lower-level position, reducing his salary by 40%, to 15,000 yuan per month.
But Zhou clearly rejected this offer, considering it unreasonable and not commensurate with his experience or previous position. In response to his rejection, the company terminated his contract entirely, citing "organizational restructuring" and a "lack of employment needs" resulting from automation. They tried to offer a settlement amount of about 43,000 dollars to end the matter amicably, but he chose to take legal action.
Artificial Intelligence Is Not a Legal Justification for Termination
The court's ruling not only overruled the termination decision but also provided a precise legal interpretation, considering that automation is not a force majeure. The court saw that the company's integration of artificial intelligence into its workflow does not constitute a "substantial change in circumstances" in the legal sense that would permit the termination of employment contracts under Chinese labor law.
The judges also emphasized that the company failed to present tangible evidence that the employee's tasks had become impossible to perform, or that the company's attempts to re-employ the employee were reasonable and transparent.
The Importance of the Ruling and Its Implications
This ruling sends a clear message to Chinese companies, which are fiercely competing to adopt artificial intelligence technologies. According to a Bloomberg analysis, this decision puts an end to practices that use technology as a pretext to reduce the workforce without adhering to legal standards for protecting employees.
Experts emphasize that the ruling balances the desire for technological innovation with maintaining social stability and workers' rights, noting that companies are now required to establish clear plans for retraining employees whose jobs are affected by automation, rather than resorting to arbitrary dismissal.
This case opens the door wide to questions about the possibility of adopting similar legislation in other countries, where global concerns about waves of "workforce reduction" driven by artificial intelligence are increasing, making the ruling of the Hangzhou court an important reference in legal discussions about the future of work in the age of machines.
