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China court backs worker fired for AI replacement, orders compensation, setting a precedent on job security as AI automation and unemployment concerns grow.
Recently, the Hangzhou Intermediate People’s Court and Beijing courts established a landmark precedent that prevents companies from firing workers solely because their roles have been automated by AI.
In a rare case, a court in China has ruled in favour of a worker who was sacked and replaced by his employers with artificial intelligence. The worker has been awarded over Rs 36,23,541 as compensation.
According to a report by The Guardian, the worker, whose surname is Zhou, joined a tech company in the eastern city of Hangzhou in 2022 as a quality assurance supervisor overseeing large language models used in AI products.
The company later told him that AI could do his job and demoted him while giving him a pay cut of 40%. After he refused, the company sacked him.
After Zhou disputed his dismissal, the Hangzhou intermediate people’s court ruled in April that the company was wrong to fire him and ordered it to pay him 260,000 yuan (Rs 36,63,075) in compensation.
Recently, the Hangzhou Intermediate People’s Court and Beijing courts established a landmark precedent that prevents companies from firing workers solely because their roles have been automated by AI. The courts argued that implementing AI is a voluntary business decision and a foreseeable risk, unlike “uncontrollable” events like natural disasters or government policy shifts.
Can China Balance AI With Job Security?
Following the recent incident, Kyle Chan, a fellow at the Brookings Institution who studies China’s technology and industrial policy, told the UK media outlet: “Previously, Chinese policymakers seemed to downplay these risks. Official messaging on AI focused on the new jobs that AI was creating.”
“This process was compared to the restructuring of the labour market during the Industrial Revolution. The irony here is that there was sharp worker backlash to those changes. Now we see more language from Beijing about addressing unemployment related to AI,” he further said.
The Guardian cited a recent survey by the polling firm Ipsos stating that more than 80% of people in China were excited about products that use AI even as it continues to struggle with persistently high youth unemployment with 17% of people aged 16 to 24 unable to find work.
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