The Hangzhou Intermediate People's Court ruled in April 2026 that dismissing workers to replace them with AI, without first offering retraining or reassignment, is illegal under China's Labour Contract Law.Source: Hangzhou Intermediate People's Court judgments, 28-30 April 2026

Can a company in China fire you because of AI automation?

No, not without first offering retraining or a reasonable alternative role. Chinese courts ruled in 2025 and 2026 that AI automation is a foreseeable employer strategy, not an uncontrollable circumstance justifying redundancy.Source: Hangzhou and Beijing court rulings 2025-2026

What is the major change in objective circumstances clause in Chinese labour law?

Article 40 of China's Labour Contract Law allows dismissal when objective circumstances change so significantly that a contract can no longer be performed. Courts ruled that planned AI adoption does not qualify because it is a deliberate employer choice.Source: China Labour Contract Law; Hangzhou court ruling

Background

The Hangzhou Intermediate People's Court issued two judgments on 28 and 30 April 2026 upholding lower-court rulings that AI-driven dismissal without prior retraining or reasonable reassignment is unlawful under China's Labour Contract Law. The court confirmed that cost savings from automation do not constitute a "major change in objective circumstances" sufficient to justify redundancy, placing the legal burden of adaptation on the employer.

The court sits in Hangzhou, the capital of Zhejiang province and a major hub of China's digital economy. As an intermediate-level court, its rulings carry authority across the district and provide binding precedent within the Zhejiang court hierarchy. The case it affirmed was originally heard by the Yuhang District Court and involved a QA supervisor known as Zhou.

Taken alongside the December 2025 Beijing precedent in the Liu case, the Hangzhou rulings signal an emerging consensus in Chinese labour jurisprudence that AI automation is an employer-foreseeable strategic choice, not an uncontrollable external circumstance. The two decisions together form the doctrinal backbone for potential national guidance on AI-driven dismissal.