A Chinese court has ruled that companies cannot dismiss employees or slash their salaries simply because artificial intelligence (AI) can perform their tasks. The landmark decision establishes a significant legal precedent amid a global wave of AI automation, where many corporations are adopting the technology to cut costs and reduce headcount. The case involved a male employee who joined a technology company in 2022 as a quality control manager. His primary responsibility was to audit AI-generated outputs to filter out illegal and copyright-infringing content, earning a monthly salary of approximately 25,000 yuan (around 125,000 baht).
However, after the company successfully upgraded its AI systems to automate this verification process, management demoted the employee to an operational role and cut his salary to 15,000 yuan (about 72,000 baht). When he rejected the demotion and pay cut, the company terminated his contract, citing "corporate restructuring" and the necessity to reduce staff.
The employee contested the dismissal through labour arbitration and the dispute eventually escalated to the Hangzhou Intermediate People’s Court. The court ultimately ruled in favour of the employee, declaring that the introduction of AI does not constitute a legally valid justification for termination.
