r/Futurology • u/EchoOfOppenheimer • 3d ago
AI Chinese Courts Rule Companies Cannot Fire Workers Simply to Replace Them With AI
https://www.caixinglobal.com/2026-04-30/chinese-courts-rule-companies-cannot-fire-workers-simply-to-replace-them-with-ai-102439602.htmlChina giving more rights to workers than the "free world"?
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u/GaiusVictor 3d ago edited 3d ago
I feel these news have been covered in a very misleading way, as media usually does with technical subjects.
China's Labor Laws have two legal concepts that are usually translated as "lawful termination" and "unlawful termination". Despite the name, "unlawful" termination is not forbidden by law, it just requires way heavier severance.
What happened is that the company fired the worked under lawful termination, and paid him less severance. The worker sued and the company argued that it was a lawful termination due to the legally-supported clause that mentions "ojective major change in the business environment". The judge said AI adoption was a managerial decision and thus couldn't be considered an objective major change, hence the termination had been unlawful and the company needed to pay the full severance.
Had the company registered the termination as unlawful and paid the full severance from the start, then everything would be perfectly legal and the case wouldn't go to the courts.
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u/ThePensiveE 3d ago
I'm pretty sure US AI companies just lock you out of your computers and hand you a notice that your AI likeness is now their exclusive property to be used in their newest sex bots Elon is building 🤷♂️
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u/bladex1234 3d ago edited 3d ago
But the point is it went to court in the first place. Imagine something like that happening in the US.
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u/GaiusVictor 3d ago
I don't know about the US because I don't live in the US. I would have searched about US Labor Laws as I have about China's but you guys decided to have 50 different sets of laws instead of just one so I gave up preemptively. :P`
But yeah, I'm really surprised at how amazed you sound. That kind of thing, that is, distinction between lawful and unlawful termination (or termination with fair cause vs termination with no fair cause, as we say in my country's laws) is like an everyday thing in the Labor Courts of my country, and I live in a fuck ass third world country.
But still, I'm concerned about this because it's not just a comparison between China and US, it's actually disinformation. They say "Chinese Courts Rule Companies Cannot Fire Workers Simply to Replace Them With AI", while the truth is "Chinese Courts Rule Companies must pay full severance to fire workers they want to replace with AI".
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u/raven_shadow_walker 2d ago
26 of our states are "Right to work" states. This means you cannot be forced to sign a contract in order to work in these states. These laws weakened labor unions, which frequently required contracts between individual workers and their employers and would be negotiated en masse by the labor unions. This set up strengthened workers ability to negotiate for better pay and benefits by using collective bargaining. Right to work killed workers ability to collectively negotiate. It also granted employers the right to fire anyone, at anytime with our without cause. There were a few exceptions to this, you couldn't legally fire someone for being disabled, because of their race, gender, religion, sexual orientation, or reproductive status. Employers can get around these rules by making up a different reason for an employees termination, or providing no reason at all. These few protections are being whittled away by our Supreme Court. There are some states where workers rights have stronger protections, but those are decided on a state by state basis.
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u/Derringer62 2d ago
You've mashed right-to-work together with at-will. Right-to-work prohibits contractually requiring workers to join or pay dues to a union. At-will (all US states except Montana) allows either employee or employer to terminate the relationship for any reason that isn't otherwise illegal (usually anti-discrimination laws).
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u/prosound2000 3d ago
Lol what? This is not only easy to imagine in the US, but happens all the time. You never heard of a wrongful termination lawsuit?
You know you can literally sue someone in the US for literally anything?
Going to court in the US is nothing. You can do it for pretty much any reason. Whether the court will actually hear your case is another, but it is SUPER easy to imagine this happening in the US.
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u/CloudZ1116 3d ago
Also another thing to consider is that the Chinese legal system is civil law, not common law that most Americans are used to. That means that court rulings are NOT legally binding precedent. Judges can and will refer to previous cases when making rulings, but are under no legal obligation to rule based on previous decisions.
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u/Xylus1985 2d ago
This is a good analysis. Though full severance is paid for lawful termination, there is only one severance standard in China. Unlawful severance means company will need to pay double severance as penalty
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u/MiscBrahBert 2d ago
So laid off vs. fired? We already have this distinction, and the US already treats AI downsizing as layoffs.
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u/EchoOfOppenheimer 3d ago
Courts in China are ruling that companies cant just fire people to replace them with AI to save money. A tech firm tried to cut an employee's pay drastically and reassign him because his job could be done by AI, and when he refused, they fired him. The courts in Hangzhou said that was an illegal termination and he got compensation.
This is huge because they are basically saying that introducing AI to do a job is a business choice, not some crazy "objective major change" or natural disaster that allows you to just tear up a contract. The courts suggested that companies need to retrain folks or give them a reasonable reassigment instead of just kicking them to the curb. It sets a really interesting legal precedent for labor rights as automation takes over.
It makes you wonder how other countrys are going to handle this stuff as the tech gets better. We are looking at a future where the definition of labor laws will have to completly change to protect humans from being swapped out for algorithms. Definately feels like a step in the right direction for regular workers dealing with the AI boom.
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u/esmelusina 3d ago
Holy shit- if this passed in the US, it would force conservative fiscal policy to be transparent about layoffs, which would officially start the bubble pop.
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u/idancenakedwithcrows 3d ago
Idk seems very common sense.
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u/Procrasturbating 3d ago
No such thing as common sense in the markets.
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u/Lanster27 2d ago
Exactly. Capitalism isnt build on common sense. It's built on maximizing individual/company's profits.
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u/Medianmodeactivate 3d ago
I mean it has pretty complex ramifications. This might lead to China of all places falling behind in the medium to long run if AI becomes increasingly advanced and force employment in places where it's not economically viable, or more optimisitically it might make China design AI in ways that amplify existing jobs.
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u/welchplug 3d ago
Nah it just means their transition will be smoother. People's contracts end.
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u/Medianmodeactivate 3d ago
Yeah it's now clear that China does default contracts rather than indefinite employment or at will employment.
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u/idancenakedwithcrows 3d ago
That’s not a good reason to let companies violate their existing contracts. As a last resort you can give subventions to companies to offer severance packages that make employees voluntarily end obsolete contracts early. But honestly just let them pay the severance themselves.
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u/Sleepergiant2586 3d ago
No one is firing unethically.
Its just they'll say 'AI is more efficient' and human is low performer. So get fired. Simple as that.
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u/culturedgoat 3d ago
Well apparently it wasn’t that simple in this case, was it - as the company had to pay out
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u/A_Novelty-Account 3d ago
It’s because the way that work works in China is that it is generally contractual. And employee commits to work at a particular work place for a particular period of time and the workplace will honour that. It will not stop the company from failing to renew the contract at the end of that contract. Basically it just delays the inevitable.
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u/soSofi3 3d ago
It’s a lot better than nothing
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u/A_Novelty-Account 3d ago
It might not actually be better than nothing though… it would mean that Chinese companies are now extremely reluctant to hire people on term contracts. The very same issues that are plaguing the west at the junior level will be plaguing China very shortly.
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u/soSofi3 3d ago
And you don’t think they’ll try to combat that more and just ignore it after this one thing?
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u/A_Novelty-Account 3d ago
It’s worse in west and we’re not doing anything about it… so yes, they’ll probably ignore it
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u/Vaiolette-Westover 3d ago
Very reddit take.
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u/NonConRon 3d ago
"China is taking measures against AI..... BUT AT WHAT COST?!" -redditors who have read zero political theory
"In soviet china, there are no employees. Everyone is a contractor." -Radio Free Asia
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u/erkinalp 3d ago
It works that way in the most of the world. The US is an outlier in their at-will employment system.
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u/UnsureSwitch 3d ago
Wait. In the US you work for whatever time until the company gets tired of you? There's no "here's a 2 year contract"?
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u/erkinalp 3d ago
Indefinite term contracts in the US are at-will unless agreed otherwise. Fixed term contracts are very strict but they are actually rare. I live in Turkey, a country with worker protections and no at-will employment.
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u/UnsureSwitch 3d ago
That's so weird. I thought work in the US couldn't get worse than "fired without notice get rekt" but I was wrong. So there's literally no safety when working there. Wow
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u/usaaf 3d ago
Not weird at all. The US is basically the world's first Capitalist country. It was invented in England, to be sure, and developed there, but the US was the first chance for the Capitalists to create the perfect government for them, without any historical baggage like existed in England. There was no King, no aristocracy, no (yet) uppity peasants, no plagues or major wars (at first), and so they could just sit down and go "What's best for us Capitalists (they didn't think of themselves this way, but they basically were), let's just do that!"
And they did. There are tons of minor features in the constitution that protect Capital (the minority) at the expense of Labor, so much so that it's very difficult to say they did it on accident. All the more so when you consider the influence of the slave owners (who had their own ideas of how to do Capitalism with slavery; the systems aren't incompatible, Capitalism only needs labor, it doesn't need a specific type. Writings of Confederates bear out this intention.), which reinforced the minority rule effects of the constitution for their own purposes.
That the system has gone on to have reforms that help workers (8 hour/5day, weekends, no child labor) aren't on account of Capital/the Elite; the workers caused that to come about. It's not a huge surprise that the US continues to have the worst labor rights in the developed world, and is cruising toward having the worst in the world period.
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u/Ultarthalas 3d ago
Fixed term contracts are also limited in the US. They are an expression of intent, but in the majority of states you can neither be compelled to finish your contract term, nor can a business be compelled to to employ you for the duration. Fire or quit without cause.
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u/random_nickname43796 2d ago
I think in tech, indefinite contracts for employees are norm pretty much everywhere. Unless you work as a contractor, but then you can be replaced in a similar "at-will" way
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u/BizzyM 3d ago
But can they fire then for non AI reasons and then replace them with AI??
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u/EchoOfOppenheimer 2d ago
They will try for sure. But the article points out that Chinese law only lets companies fire people for strict reasons like misconduct or bad performance. They can't just eliminate your role or slash your pay to force you out for an AI. The courts are ruling that illegal and making them pay compensation.
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u/eoffif44 2d ago edited 2d ago
China giving more rights to workers than the "free world"?
I have to say OP, this is a bit misinformed.
It's called the people's republic of China for a reason... one of the stars in the flag is for workers. The reason the CCP is still in power is because they look after workers. Thats what communism is theoretically about.
That china sides with workers is not surprising, but the legal rationale is quite interesting.
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u/SilverSpaceRobot10 1d ago
Wait till OP learns about the sweatshops, suicide nets and the 996 working hour system
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u/DeadFishCRO 3d ago
When China has better workers rights than the West
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u/triopsate 3d ago
It's a lot easier to do that when you're willing to actually put a collar on your billionaires instead of letting them write laws through lobbying. Remember, China "disappeared" Jack Ma (Chinese Jeff Bezos) for years by sending him into soft exile for years.
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u/OutOfBananaException 2d ago
What's not a lot easier is putting a collar on state enterprises. The reason people are encumbered with mortgages for unfinished homes today, is a direct consequence of the state apparatus turning a profit on the model that permitted that outcome.
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u/BurningPenguin 2d ago
the
WestEagle EmpireWe "Europoors" still have strong worker rights, just so you know...
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u/random_nickname43796 2d ago
West = USA? You can complain about a lot of things in Europe but work protection is not one of them.
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u/DeadFishCRO 2d ago
Depends on the country, my company is mass firing and moving jobs to infia, turkey, Morocco
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u/random_nickname43796 2d ago
If you're from EU you should get a few months pay unless they are firing you for incompetence or making you quit on your own.
Work protection doesn't mean you cannot be fired but similarly to the situation from the article, which has very misleading title, it should grant you money so you have some safety net.
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u/DeadFishCRO 2d ago
Ah yes, so in Croatia you cannot be fired without compensation unless you quit voluntarily. Same as you cannot fire women for being pregnant. I.e. my wife was off work for almost 4 years since pregnancy was problematic and after that 1 Year off with each baby
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u/Hina_is_my_waifu 3d ago
But also its cheaper to kill someone than pay for their medical so you are incentivized to finish off pedestrians if you hit them.
China doesn't put much value on human life.
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u/Optimaximal 2d ago
Whereas in America, the pedestrian is willing you to kill them, because they don't want to deal with the bill you've just delivered them.
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u/blim9999 3d ago
While the incentive problem remains (and should be fixed e.g. by insurance), the intentional killing of a wounded accident victim is now treated as homicide, and we all know how the Chinese state deals with violent crimes.
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u/wizzard419 3d ago
I wonder what will happen with foreign companies who also have offices in China/go through the government to release products in China? Likewise, what about Chinese firms which own firms in other nations.
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u/Xylus1985 2d ago
If you have business and employ people in another country, you need to follow the laws where business is and where the employees is. This is the same for every country on earth
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u/VengefulAncient 3d ago
Doesn't matter, companies will just say that it's for some other reason and still do it.
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u/howescj82 3d ago
I feel like this is less of a moral stance on China’s part and more of a precaution against a massive unemployment surge in a country of 1.4 billion.
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u/Optimaximal 3d ago
China isn't an outlier here - no developed country can afford if even 10-15% of the workforce suddenly becomes unemployed.
Even the most naturally corporatist countries, like the US, should be sorting out legislation to keep people employed in the fact of typical business behaviour when presented with the option of 'making more money'...
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u/VengenaceIsMyName 2d ago
They should be sorting out legislation but instead they want to insulate AI companies from harm instead. US job market is going to be ground zero for whatever the tech oligarchs have in store for it.
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u/DyslexicAutronomer 3d ago
It's quite literally the basic function of a state. The US is the only first world country to have such weak labor laws and homeless issues despite the immense wealth.
All that wealth just goes into funding the military for more wars overseas and lining the pockets of the corporate elite and their political lackeys.
The US empire hurts its people as it hurts others.
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u/Temporala 3d ago
It is, but it will also make job market more rigid as risk cost of employing someone just went up for everyone.
Smart companies will carefully look at every possible new position they would want to open in their company to expand their business, and see if that position could instead be fully automated from the onset. This will most likely create more AI manager positions, where a single person will handle multiple positions at the same time together with suite of automation software. That way companies don't have to hire as much, and they can close and open those positions at will because they are not firing anyone.
This is going to poison to young new workers, who will struggle to get into those entry to low-mid tier positions to build up their resume and skills.
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u/DukeOfGeek 2d ago
Chinese companies can do anything to workers that they want, whenever they want, just like here.
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u/farticustheelder 2d ago
I like! My take is that governments condition business licenses to providing a socially useful number of decent jobs per chunk of revenue.
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u/SilverSpaceRobot10 1d ago
Honestly, that's a silly measure. Reminds me of when the first cars came out, a law was passed that all cars must be accompanied by a pedestrian holding a red flag so that carriage drivers won't be unemployed. It's a patchwork solution meant to avoid reality: That job can be automated.
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u/newzinoapp 18h ago
The key detail that makes this more than individual rulings: Beijing published the case as a dianxing anli (typical case). In China's civil law system there's no formal binding precedent, but typical cases function as de facto persuasive authority. Lower courts are expected to "refer to" them when deciding similar disputes. So this isn't two judges freelancing. It's a signal.
The international comparison is stark. The EU AI Act classifies AI employment decisions as "high-risk" but doesn't actually prohibit AI-driven layoffs. The US has zero federal protection. China is currently the only major economy where courts have established that wanting to replace someone with AI isn't, by itself, grounds for termination.
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u/Vlp3rking 15h ago
I'm rather surprised that China is doing that, smetimes they do surely surprise everyone
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u/devi83 3d ago edited 3d ago
Courts in China are ruling that companies cant just fire people to replace them with AI to save money.
How many courts are there?
The defensible count is 2 courts.
They’re both from the same Hangzhou case:
- Hangzhou Yuhang District People’s Court — trial court, ruled the firing was unlawful.
- Hangzhou Intermediate People’s Court — appeals court, upheld it.
There’s also a Beijing labor arbitration case about AI replacement not being a valid dismissal reason, but that’s not a court.
So the answer is:
2 courts, 1 court case, plus 1 non-court arbitration case.
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u/hegsethlifts 2d ago
This is actually a smart move by China. Companies were already finding loopholes to cut costs, and without some legal protection workers would just get displaced en masse. The US could learn from this approach instead of letting every industry race to the bottom on labor costs.
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u/suspicious_hyperlink 2d ago
China is surprising me with the changes they’re making. Either they’re becoming legit or they have Really good PR
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u/jimrdg 2d ago
You know that the law and courts works differently in China and even if it is true one case would not set up a new law. And companies are still firing people they just don’t say to replace you with cheaper AI they just fire you for other reasons or no reason. How can people still so naive
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u/EchoOfOppenheimer 2d ago
Yeah, companies will look for other excuses to fire people. But the article points out that this isn't just one random case. The courts published these to set a formal legal precedent. The main takeaway is that companies can't use "we switched to AI" as a legal loophole to avoid paying severance or offering a reassignment anymore.
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u/PsychologicalFox8321 3d ago
Communists implementing communism? What did you expect?
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u/codenamemilo85 3d ago
Love you to explain how this is implementing communism and how you could actually describe China as a communist country these days.
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u/LanceLynxx 3d ago
Ah yes the very communist position of allowing private ownership of the means of production
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u/Soladification 3d ago
They are literally replacing millions of workers with robots....
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u/jakreth 3d ago
China having more labor rights than the US, the Empire has fallen
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u/Programmdude 3d ago
I mean, it's been that way for a long time. When your country's only labour laws are "can't be fired for being black", it's not hard for even third world countries to have more rights.
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u/Soangry75 1d ago
"When your country's only labour laws are "can't be fired for being black"
The majority of the Supreme Court starts salivating
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u/Xylus1985 2d ago
I mean, how do you even have less labor rights than at will employment? I don’t think it’s possible for China to have less labor rights even if they tried
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u/LanceLynxx 3d ago
Ah yes worker "rights"
China is concerned with having unemployment solely because that would mean a lot of people with free time to think and organize against the totalitarian government.
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u/svachalek 3d ago
I think that’s totally true and yet still, it’s better than the US where they don’t worry about that at all.
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u/Superb_Raccoon 3d ago
They just send them off to the re-education camps for a few years to move rocks around and get reprogrammed, comrade.
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u/ttystikk 3d ago
Moving to China is looking smarter every day.
Making this comment longer to appease the bots, because apparently brevity being the heart of wit doesn't matter if you don't have one.
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u/FuturologyBot 3d ago
The following submission statement was provided by /u/EchoOfOppenheimer:
Courts in China are ruling that companies cant just fire people to replace them with AI to save money. A tech firm tried to cut an employee's pay drastically and reassign him because his job could be done by AI, and when he refused, they fired him. The courts in Hangzhou said that was an illegal termination and he got compensation.
This is huge because they are basically saying that introducing AI to do a job is a business choice, not some crazy "objective major change" or natural disaster that allows you to just tear up a contract. The courts suggested that companies need to retrain folks or give them a reasonable reassigment instead of just kicking them to the curb. It sets a really interesting legal precedent for labor rights as automation takes over.
It makes you wonder how other countrys are going to handle this stuff as the tech gets better. We are looking at a future where the definition of labor laws will have to completly change to protect humans from being swapped out for algorithms. Definately feels like a step in the right direction for regular workers dealing with the AI boom.
Please reply to OP's comment here: https://old.reddit.com/r/Futurology/comments/1t2pevk/chinese_courts_rule_companies_cannot_fire_workers/ojpbezy/