AI can replace it, but it can't disengage people.

A Chinese court has made an interesting decision on the use of AI in the business sector, stating that companies cannot lay off employees simply because AI can work instead of humans, a key norm among the AI Automation stream that many organizations around the world are adopting to reduce costs and reduce headcount.

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The case against a male employee named "Zhou" who joined a technology company in 2022 as head of quality control with the task of monitoring the results of the AI model to screen illegal and pirated content. He received a salary of about 25,000 yuan a month, or about 125,000 baht.

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However, the company was later able to develop AI to automate this part of its work, so it decided to downgrade Zhou's position to the operational level, with a salary reduction to only 15,000 yuan, or about 40% reduction. When Zhou rejected the offer, the company laid off him, claiming it was a reorganization and a reduction in the number of employees.

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Zhou decided to file his case for arbitration before the case was referred to the Hangzhou City Court, where the court ultimately ruled in favor of him as the winning party, stating that the use of AI was not a sufficient legal reason for the dismissal of employees.

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The court explained that Chinese labour law allows dismissal in the event of "a major change in concrete circumstances," such as a severe economic crisis, or an incident that prevents a company from continuing its business, but the adoption of AI is a "voluntary business decision," not an inevitable force majeure or event.

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Furthermore, the court viewed proposing employees to move to lower positions, with salary cuts of almost half, as not a reasonable proposition for job migration.

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The ruling also clearly signaled that if a company wanted to adapt into the AI era, employers should choose to negotiate, train new skills, or provide employees with the right positions, rather than using AI as an excuse to lay people off immediately.

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Many parties see this as perhaps the beginning of a new approach to labor protection in the AI era, and it reflects that, despite how fast technology is evolving, companies are still responsible for their employees because ultimately, AI should be a productivity tool, not a shortcut to reducing people or avoiding corporate labor responsibility.

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However, the decision of the Chinese court does not mean that a company cannot lay off employees at all, because if it is an employee downgrade in accordance with the procedures of the labour law, there are obvious reasons, such as business problems, reorganization, or operational needs, including the proper payment of compensation and supervision of employee rights, it can still operate normally, but the company cannot use the reason that "AI works instead" as an excuse to lay off employees directly without passing the labor protection process required by the law.

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Source: fortune, techspot

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