Conceptual diagram of AI Photo: VCG

Beijing Municipal Bureau of Human Resources and Social Security released on Friday a series of typical labor dispute arbitration cases for 2025. In a labor dispute arbitration triggered by artificial intelligence (AI) replacing a job position, the arbitration committee ruled that "AI replacing a position ≠ legal dismissal," providing a case reference for resolving similar cases in the future, China Media Group reported on Saturday, citing Beijing Daily.

A Chinese expert said on Sunday that the ruling provided reassurance to the vast number of workers, noting that against the backdrop of accelerating AI penetration and workplace concerns about being replaced by AI, the arbitration has a positive exemplary effect, helping alleviate employees' anxiety about AI, which is expected to help the stability of the labor market.

According to the media report, in the Beijing case, Liu had worked in a technology company for many years, responsible for traditional manual map data collection. In early 2024, the company decided to full transition to AI-managed autonomous data collection, abolishing Liu's department and the corresponding position. 

At the end of 2024, the company terminated Liu's labor contract on the grounds that "major changes have occurred in the objective circumstance on which the hiring contract was based, making it impossible to continue implementing the labor contract." Liu objected to the firm's termination, claiming it was unlawful and applied for arbitration, according to the report.

The focus of the dispute in this case is whether an employer's abolition of a position due to the introduction of AI constitutes a "major change in the objective circumstance on which the labor contract was based" as stipulated in the Labor Contract Law.

The arbitration committee noted that "major circumstance changes refer to changes that occur after the conclusion of the labor contract which neither the employer nor the employee could foresee at the time of contract signing." Typical scenarios include force majeure caused by natural disasters, as well as employer relocation, production halt, or business transformation due to changes in laws, regulations, or policies. The common essence of these circumstances lies in their "irresistibility" and "unpredictability" — that is, they fall outside the scope of the employer's normal business decisions and risk management, per the report.

Regarding the specific case, the company's introduction of AI technology was a proactive technological innovation implemented by the enterprise to adapt to market competition. Although it may lead to adjustments in job structures, it does not possess the characteristics of "irresistibility" and "unpredictability." The company's termination of Liu's labor contract on the grounds that the position was replaced by AI shifts the risk of normal technological iteration onto the employee. The arbitration committee ruled that the company had committed an illegal termination, said the report.

"This ruling safeguards Liu's legitimate rights and interests, providing reassurance to the vast number of workers, helping alleviate employees' anxiety about AI," Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Global Times on Sunday.

The arbitration committee noted that, against the backdrop of the rapid development of AI technology, employers should properly accommodate affected employees through measures such as negotiating changes to the labor contract, providing skills training, and internal job reassignment. 

If it is indeed necessary to terminate the labor contract, employers must strictly comply with relevant laws and avoid simply applying "major changes in the objective environment" as grounds for termination, said the media report.

"Companies can provide relevant skills training to employees based on the new job demands arising from the application of AI technology, helping them transition to new positions; or conduct internal job reassignments, allowing employees to continue contributing value in new positions," Wang said.

If it is indeed necessary to terminate the labor contract, employers must ensure that the termination is backed up by sufficient factual and legal grounds and is carried out in accordance with statutory procedures, including negotiating with the affected employees in advance and paying corresponding economic compensation, Wang said.


Global Times