Chinese court rules firms can't lay off workers on AI grounds

A Chinese court ruled that companies cannot terminate employees just to replace them with artificial intelligence systems, as authorities juggle the need to stabilise the domestic labour market with a global race to develop AI technologies.

The court decided that a tech firm in eastern China had illegally fired one of its workers after he refused to take a demotion when his job was automated by AI, according to a statement by the Hangzhou Intermediate People's Court.

"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,'" the court said in the article dated April 28.

Companies cannot unilaterally lay off employees or cut salaries due to technological progress, the court said in a separate statement, citing the same case.

Chinese firms are racing to implement AI systems as part of a state-directed push to dominate the tech. At the same time, planners in the Chinese Communist Party have indicated a willingness to prioritise stability in the labour market as the country reckons with a slowing economy and elevated youth unemployment.


(Bloomberg)

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