Hangzhou, 2 May 2026 – A Chinese court has ruled that companies cannot dismiss employees simply because their work can be replaced by artificial intelligence, setting an important labour-rights signal as businesses race to adopt automation and large language models.
The Hangzhou Intermediate People’s Court found that a technology company in eastern China had illegally terminated an employee after he refused to accept a demotion when parts of his role were automated by AI. The court said the company’s reason for dismissal did not meet the legal threshold for ending the employment contract, as it was not based on serious operational difficulty, downsizing or circumstances that made continued employment impossible.
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