A court in eastern China has ruled that a senior tech worker cannot be laid off because his job was replaced by an AI system, according to NPR.
The decision is seen as a victory for labor rights as companies increasingly adopt AI to do the tasks assigned to human workers. At the heart of the case is whether a company can legally fire a human worker because AI can now do their job.
“The termination grounds cited by the company 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,'” ruled the Hangzhou Intermediate People’s Court, upholding a lower court’s decision that the firing was unlawful.
The worker was a quality assurance employee at a tech firm in Hangzhou, Zhejiang province. The employee mainly worked with AI large language models, checking the accuracy of answers.
After the company decided AI could do the task, the worker was given a demotion and 40% pay cut. When he refused the terms, he was fired. The worker filed an arbitration claim and won. The company sued in 2025 and lost in the lower court. Now it has lost in the appellate court as well. The Hangzhou court said it was not reasonable for the company to demote the worker at a steep salary cut.
There have been other victories after workers challenged the legality of being replaced by AI.
Last year, a Beijing worker won his case through arbitration. The arbitration panel said the company’s switch to AI was a business choice, not due to an event outside their control. As such, the company was shifting the consequences of the tech transformation to the employee – and ruled the firing as illegal.