The day before International Workers’ Day, a court in China sent a clear message to employers: artificial intelligence is not a license to throw workers away.
On April 30, the Hangzhou Intermediate People’s Court in Zhejiang Province upheld a ruling that an AI technology company had unlawfully fired a worker named Zhou. Zhou had been employed since November 2022 as a quality assurance supervisor. He earned 25,000 yuan a month.
His work was part of the new AI industry itself. He matched user queries with large language models and filtered illegal or privacy-violating content. When the company introduced AI systems that could perform those tasks, it did not negotiate a real transition. It did not provide retraining. It offered him another job at 15,000 yuan a month — a 40% pay cut.
When Zhou refused, the company fired him and claimed that AI-driven restructuring made the dismissal necessary.
Zhou fought back and won. The company appealed and lost. The Hangzhou court ordered it to pay more than 260,000 yuan in additional compensation and selected the case as a model ruling for similar disputes.
The point is simple: a company cannot choose to automate, pocket the savings and then claim the worker must bear the cost.
China’s Labor Contract Law restricts arbitrary dismissal. It allows unilateral termination only under narrow conditions, including a “major change in the objective circumstances” that makes the original contract impossible to perform. The court said voluntary AI adoption does not meet that standard. Automation is not an outside force acting on the company. It is a management decision made by the company.
That means the employer still has obligations to the worker.
This is the part that matters most. In China, companies that automate cannot simply announce that AI has erased a job. They must deal with the worker — through consultation, negotiation, training, reasonable reassignment or lawful compensation — instead of dumping the cost of technology onto the worker.
And where a union is involved, the employer cannot ignore it. For larger layoffs, companies must explain the situation to the trade union or to all workers in advance, solicit opinions and submit the layoff plan to labor authorities. Before a unilateral termination, the employer must notify the union of the reasons. If the company violates the law or the contract, the union has the right to demand correction.
That does not mean every dispute is automatically won. It means the employer’s decision to automate is not treated as a private command. The worker, and where present the union, is inside the process. Technology does not wipe out negotiation.
That is exactly what Zhou’s company tried to avoid. It treated AI as a weapon to force a 40% pay cut. When Zhou refused, it fired him. The courts said no.
The contrast with the United States could not be sharper.
In the U.S., the general rule in private-sector employment is termination at will. Most workers have no union, no individual contract, no right to negotiate over automation and no legal claim when management decides that a machine, an algorithm or an AI system will replace them.
The Worker Adjustment and Retraining Notification (WARN) Act requires advance notice before some mass layoffs, but it does not stop the layoffs. It does not require retraining, reassignment or negotiation. It does not say automation is a company decision whose costs cannot simply be dumped on workers.
That is why U.S. Big Tech can cut nearly 150,000 workers in the first five months of 2026 while pouring nearly $700 billion into AI infrastructure. The money that once paid workers is being turned into machines, data centers, chips and power contracts owned by the corporations. The workers are discarded. The capital remains.
No U.S. court has ruled those layoffs unlawful because automation is a management choice, not an external necessity. U.S. law does not contain the protection China’s Labor Contract Law provides.
China’s AI industry is expanding rapidly. Employers will keep trying to use automation to cut labor costs. But automation does not settle the question by itself. The company is not the only force in the workplace.
That is the real lesson. AI does not erase the worker. It does not erase the contract. It does not erase the union. A company that wants to reorganize work must deal with the worker — and where the union is involved, with the union.
The fight is over who pays for new technology. The bosses want the gains for themselves and the costs pushed onto the workers. Zhou’s case shows that workers do not have to accept that as natural or inevitable.
AI does not erase class struggle. It gives the bosses a new weapon. The question is whether they can use it to cut jobs and wages — or whether workers and unions can force them to pay for the technology they choose.
Join the Struggle-La Lucha Telegram channel