- Chinese law requires a “major change in objective circumstances” to terminate a contract
- AI and automation alone are not enough to justify firing a worker
- Workers also have some responsibility to keep up with AI.
China has banned companies from laying off workers on the grounds that they can be replaced by AI, making it one of the first countries to increase human labor protections amid a rise in workplace automation.
The Hangzhou Intermediate People’s Court essentially concluded that AI-driven job replacement does not constitute a “major change in objective circumstances,” which would normally allow a company to terminate a worker’s contract.
It’s also notable that this happened in Hangzhou, because the city has been described as a major Chinese AI hub.
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China increases protection of human labor against AI
The court ruled that employers must demonstrate valid legal grounds beyond automation when laying off staff, and that simply reassigning lower-paid workers would also be unacceptable.
This case is because an actual tech worker was laid off and did not receive high enough compensation, but it also references other workers who have been displaced by AI.
One of the lawyers involved highlighted the importance of the case in today’s automated era and explained that companies must also take on the social responsibilities associated with increasing AI productivity.
“Technological progress may be irreversible, but it cannot exist outside a legal framework,” explained Wang Tianyu, a researcher at the Chinese Academy of Social Sciences.
However, the Chinese court also emphasizes that human employees must also contribute to technological discourse and progression by continuing to adapt as workplace trends change: staying ahead of the AI curve with all the right skills and training is both your responsibility and that of your employer.
While China could be among the first to issue such a resolution, other countries and regions are expected to follow suit as AI continues to impact global jobs, and the EU AI Law also covers some employment issues.
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