China: Hangzhou Intermediate People's Court issued judgment determining that companies cannot terminate employees solely to replace them with AI systems

On 28 April 2026, the Hangzhou Intermediate People's Court ruled that companies cannot terminate employees solely to replace them with artificial intelligence (AI) systems. It was stated that the ruling was released as part of a set of typical cases protecting worker rights ahead of International Workers' Day and applies to technology enterprises and AI-related companies in China. The court established that AI adoption does not constitute a "major change in objective circumstances" under China's Labor Contract Law and therefore cannot justify dismissal. It provided that companies cannot use AI replacement as grounds for termination, must offer reasonable reassignment terms without substantial pay cuts, and must ensure that the costs of technological transformation are not borne solely by workers.