China says it is illegal for companies to fire humans if AI takes their jobs

Date:
Mon, 04 May 2026 15:05:00 +0000

Description:
Chinese court rules AI-induced productivity gains aren't grounds enough to justify terminating a worker's contract.

FULL STORY ======================================================================Copy link Facebook X Whatsapp Reddit Pinterest Flipboard Threads Email Share this article 0 Join the conversation Follow us Add us as a preferred source on Google Newsletter Subscribe to our newsletter Chinese law requires a "major change in the objective circumstances" to terminate a contract AI and automation aren't enough by themselves to justify laying off a worker Workers also have some responsibility to keep up with AI China has made it illegal
for companies to fire workers on the basis that they can be replaced by AI, making it one of the first countries to increase human labor protections amid a rise in workplace automation.

The Hangzhou Intermediate People's Court essentially concluded that AI-driven job replacement does not constitute a "major change in the objective circumstances," which would usually allow a company to terminate a worker's contract. It's also notable that this happened in Hangzhou, because the city has been described as a major Chinese AI hub. Article continues below You may like 'Some of our employees fear job loss, and it turns them away from AI altogether': AI is helping boost productivity for some workers but others still say they're afraid to use it LinkedIn exec says AI isn't causing a big drop-off in hiring just yet Why AI adoption isnt just a tech problem, but a retention risk China increases human labor protections against AI The court ruled that employers must show valid legal grounds beyond automation when laying off staff, and that simply reassigning workers with lower pay would also be unacceptable.

This case stems from an actual tech worker being fired and not matched with a sufficiently high compensation payout, but it also draws reference to other workers who have been displaced by AI.

One of the lawyers involved noted the significance of the case in today's automated era, explaining that companies must also bear the social responsibilities associated with AI's productivity boosts.

"Technological progress may be irreversible, but it cannot exist outside a legal framework," Wang Tianyu, a researcher with the Chinese Academy of
Social Sciences, explained. Are you a pro? Subscribe to our newsletter Sign
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However, the Chinese court also stresses that human employees must also contribute to the discourse and technological progression by continuing to adapt as work trends shift staying ahead of the AI curve with all the right skills and training is as much their responsibility as their employer's.

While China might be among the first to issue such a ruling, other countries and regions are expected to follow suit as AI continues to have an impact on global labor, with the EU's AI Act also covering some employment topics.

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