WHY THIS MATTERS IN BRIEF
A precedent that bars firing workers just to deploy AI could reshape how automation rolls out worldwide.
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While workers in the western world agonise over what seems to be an impending job apocalypse, their Chinese counterparts are winning in pitched legal battles against Artificial Intelligence (AI) automation. Last week, according to , a Chinese court ruled that companies can’t use AI as an excuse to fire workers. The case involved a quality assurance supervisor, identified only by his surname Zhou, who was hired in 2022 to oversee a tech company’s AI output. When his bosses tried to replace him with a Large Language Model (LLM) in 2025, they offered him a demotion with a 40 percent pay cut.
Unsurprisingly, Zhou refused — so the company fired him, offering a severance package worth around $45,000. Unhappy with the rather paltry payout, Zhou contested the severance offer through a government arbitration panel.
The Future of AI, Humanity, and Work | Matthew Griffin | Futurist Keynote, by Futurist Keynote Speaker Matthew Griffin
After that panel ruled in favour of Zhou on grounds that the dismissal was illegal, the company filed a lawsuit with a lower court, presumably the district-level . After losing that suit, the company then appealed to the municipal-level Hangzhou Intermediate People’s Court, which upheld the lower court’s decision on the grounds that bringing on AI isn’t an excuse to start shredding job contracts.
“The termination grounds cited by the company did not fall under negative circumstances such as business downsising or operational difficulties, nor did they meet the legal condition that made it ‘impossible to continue the employment contract,'” the court said in a .
“Technological progress may be irreversible, but it cannot exist outside a legal framework,” Wang Xuyang, a lawyer from Zhejiang Xingjing law firm told Xinhua.
It’s important to note that China follows a civil law system, unlike countries like the UK and US, which have common law systems. That being the case, there is no stare decisis in China, the legal principle that requires courts in the US to set by other courts.
Still, the move is a major win for Zhou, and is seen as a soft sign that the Chinese judiciary, and therefore national lawmakers could be gearing up to protect workers from the threat of AI automation and austerity — while labourers remain largely on their own in much of the western world.
Does this Chinese ruling set a binding precedent against AI layoffs?
Not in the common-law sense. China uses a civil-law system with no stare decisis, so the Hangzhou ruling does not formally bind other courts. But it is a strong signal of how the judiciary — and potentially lawmakers — are leaning, and it stands in sharp contrast to Western economies, where workers displaced by AI have far fewer protections.
