While workers in the western world agonize over what seems to be an impending job apocalypse, their Chinese counterparts are winning in pitched legal battles against AI automation.

Last week, according to the state-run Xinhua News Agency, a Chinese court ruled that companies can’t use AI as an excuse to fire workers. The case involved a quality assurance supervisor, identified only by his surname Zhou, who was hired in 2022 to oversee a tech company’s AI output. When his bosses tried to replace him with a large language model (LLM) in 2025, they offered him a demotion with a 40 percent pay cut.

Unsurprisingly, Zhou refused — so the company fired him, offering a severance package worth around $45,000. Unhappy with the rather paltry payout, Zhou contested the severance offer through a government arbitration panel.

After that panel ruled in favor of Zhou on grounds that the dismissal was illegal, the company filed a lawsuit with a lower court, presumably the district-level Primary People’s Court. After losing that suit, the company then appealed to the municipal-level Hangzhou Intermediate People’s Court, which upheld the lower court’s decision on the grounds that bringing on AI isn’t an excuse to start shredding job contracts.

“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 a statement translated by NPR.

“Technological progress may be irreversible, but it cannot exist outside a legal framework,” Wang Xuyang, a lawyer from Zhejiang Xingjing law firm told Xinhua.

It’s important to note that China follows a civil law system, unlike countries like the UK and US, which have common law systems. That being the case, there is no stare decisis in China, the legal principle that requires courts in the US to follow precedent set by other courts.

Still, the move is a major win for Zhou, and is seen as a soft sign that the Chinese judiciary, and therefore national lawmakers could be gearing up to protect workers from the threat of AI automation and austerity — while laborers remain largely on their own in much of the western world.

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