On December 26, the Beijing Municipal Human Resources and Social Security Bureau released typical cases of labor and personnel dispute arbitration for 2025. Among them, a case involving a labor dispute triggered by a company’s introduction of artificial intelligence (AI) technology and subsequent elimination of a position has drawn significant attention.

An employee was dismissed after their position was replaced by AI, and a Beijing-based company was ruled to have acted unlawfully—a new challenge requiring proactive and systemic responses.

The arbitration body stated that terminating an employment contract on the grounds of “AI replacing a position” does not constitute a “major change in the objective circumstances relied upon at the time of contract conclusion, rendering the contract unperformable,” as defined under the People’s Republic of China Labor Contract Law. The Arbitration Committee therefore determined that the company’s termination was unlawful.

It should be noted that this conclusion comes from labor arbitration, not a court judgment. However, in practice, arbitration serves as the first and most common adjudicative step in the vast majority of labor disputes, making it a significant indicator of legal trends. Against the backdrop of AI’s accelerating integration into the workplace—and in the absence of settled judicial precedents—this case offers a practical reference for balancing technological advancement with workers’ rights.

The arbitration body is attempting to draw a clear boundary: enterprises may upgrade their technology, but they cannot use “technological upgrading” as a legitimate justification for dismissing employees. Gains in corporate efficiency should not come at the expense of weakening labor rights.

At the same time, it must be acknowledged that technological progress inevitably displaces certain human roles—a natural part of how businesses enhance efficiency and maintain competitiveness. From steam engines to assembly lines, from horse-drawn carriages to taxis, and from computers to the internet, every wave of technological innovation has reshaped employment structures.

It is foreseeable that “AI replacing jobs” will become increasingly common in certain industries. Finding a new equilibrium between corporate technological transformation and workers’ employment rights is thus an entirely new societal challenge—and a systemic undertaking that requires joint efforts from enterprises, government, society, and workers themselves.

For enterprises, compliant transformation and mitigating the shock of replacement are essential. Using “AI replacement” as a simplistic rationale for contract termination may appear to reduce labor costs in the short term, but it risks higher long-term uncertainties—including frequent labor disputes, arbitration and litigation expenses, and associated management risks—that could ultimately backfire on the company itself.

In fact, technological upgrading does not have to mean only one path: dismissal. Alternatives such as negotiating changes to employment contracts, internal reassignment, and skills training can gradually adjust workforce structures. While these approaches may incur short-term costs, they help reduce legal exposure and cushion the impact of technological displacement. This not only respects workers’ rights but also reflects sound business judgment.

More importantly, society as a whole must establish institutional “shock absorbers” to create better conditions for technological renewal and industrial transition across sectors.

Many people’s anxiety about AI stems not from the technology itself, but from the mismatch between the pace of technological change and society’s capacity to adapt. More fundamentally, the debate around AI is less about “whether to develop the technology” and more about “where the technology should be applied first.”

Suppose highly advanced humanoid robots already existed. Should they be deployed first in labor-intensive roles like food delivery, or directed toward areas with chronic labor shortages—such as elderly care or high-risk operations? The answer is clear. The former might boost short-term efficiency but exacerbate job displacement and social tensions; the latter aligns better with the original intent of using technology to “fill critical gaps and safeguard basic needs.”

Addressing this dilemma precisely calls for leveraging institutional strengths to “tame” AI—the “dragon” of technology—through macro-level guidance. Industrial policies and regulatory design should steer AI toward sectors suffering from labor shortages or high occupational risks.

Moreover, while AI displaces traditional roles, it also creates new forms of employment. Therefore, inclusive, publicly accessible skills-training platforms must be built to offer free reskilling opportunities for workers in affected positions, lowering barriers to career transitions and alleviating widespread anxiety caused by the imbalance between job loss and job creation.

For workers in certain industries, “AI replacing jobs” may be an unavoidable trend—but not one without recourse. The fundamental solution lies in maintaining a capacity for continuous learning and self-improvement, shifting from being at risk of “technological replacement” to becoming active “masters of technology” in the workplace.

In sum, the ultimate purpose of technological progress is to make society more efficient and equitable. Yet such progress requires appropriate constraints and guidance to stay anchored in a “people-centered” direction.

For enterprises, compliantly advancing technological upgrades is not a passive concession, but a rational choice that reduces uncertainty and stabilizes expectations. For workers, the existence of clear rules provides necessary buffers amid the tides of technological change.

Technology will inevitably reshape job structures—but it must not erode the baseline of legal and ethical norms. Beyond efficiency, space must be preserved for fairness. Striking the right balance between efficiency and equity may well be the central question that labor relations in the AI era must repeatedly answer.

On December 26, the Beijing Municipal Human Resources and Social Security Bureau released typical cases of labor and personnel dispute arbitration for 2025. Among them, a case involving a labor dispute triggered by a company’s introduction of artificial intelligence (AI) technology and subsequent elimination of a position has drawn significant attention.

An employee was dismissed after their position was replaced by AI, and a Beijing-based company was ruled to have acted unlawfully—a new challenge requiring proactive and systemic responses.

The arbitration body stated that terminating an employment contract on the grounds of “AI replacing a position” does not constitute a “major change in the objective circumstances relied upon at the time of contract conclusion, rendering the contract unperformable,” as defined under the People’s Republic of China Labor Contract Law. The Arbitration Committee therefore determined that the company’s termination was unlawful.

It should be noted that this conclusion comes from labor arbitration, not a court judgment. However, in practice, arbitration serves as the first and most common adjudicative step in the vast majority of labor disputes, making it a significant indicator of legal trends. Against the backdrop of AI’s accelerating integration into the workplace—and in the absence of settled judicial precedents—this case offers a practical reference for balancing technological advancement with workers’ rights.

The arbitration body is attempting to draw a clear boundary: enterprises may upgrade their technology, but they cannot use “technological upgrading” as a legitimate justification for dismissing employees. Gains in corporate efficiency should not come at the expense of weakening labor rights.

At the same time, it must be acknowledged that technological progress inevitably displaces certain human roles—a natural part of how businesses enhance efficiency and maintain competitiveness. From steam engines to assembly lines, from horse-drawn carriages to taxis, and from computers to the internet, every wave of technological innovation has reshaped employment structures.

It is foreseeable that “AI replacing jobs” will become increasingly common in certain industries. Finding a new equilibrium between corporate technological transformation and workers’ employment rights is thus an entirely new societal challenge—and a systemic undertaking that requires joint efforts from enterprises, government, society, and workers themselves.

For enterprises, compliant transformation and mitigating the shock of replacement are essential. Using “AI replacement” as a simplistic rationale for contract termination may appear to reduce labor costs in the short term, but it risks higher long-term uncertainties—including frequent labor disputes, arbitration and litigation expenses, and associated management risks—that could ultimately backfire on the company itself.

In fact, technological upgrading does not have to mean only one path: dismissal. Alternatives such as negotiating changes to employment contracts, internal reassignment, and skills training can gradually adjust workforce structures. While these approaches may incur short-term costs, they help reduce legal exposure and cushion the impact of technological displacement. This not only respects workers’ rights but also reflects sound business judgment.

More importantly, society as a whole must establish institutional “shock absorbers” to create better conditions for technological renewal and industrial transition across sectors.

Many people’s anxiety about AI stems not from the technology itself, but from the mismatch between the pace of technological change and society’s capacity to adapt. More fundamentally, the debate around AI is less about “whether to develop the technology” and more about “where the technology should be applied first.”

Suppose highly advanced humanoid robots already existed. Should they be deployed first in labor-intensive roles like food delivery, or directed toward areas with chronic labor shortages—such as elderly care or high-risk operations? The answer is clear. The former might boost short-term efficiency but exacerbate job displacement and social tensions; the latter aligns better with the original intent of using technology to “fill critical gaps and safeguard basic needs.”

Addressing this dilemma precisely calls for leveraging institutional strengths to “tame” AI—the “dragon” of technology—through macro-level guidance. Industrial policies and regulatory design should steer AI toward sectors suffering from labor shortages or high occupational risks.

Moreover, while AI displaces traditional roles, it also creates new forms of employment. Therefore, inclusive, publicly accessible skills-training platforms must be built to offer free reskilling opportunities for workers in affected positions, lowering barriers to career transitions and alleviating widespread anxiety caused by the imbalance between job loss and job creation.

For workers in certain industries, “AI replacing jobs” may be an unavoidable trend—but not one without recourse. The fundamental solution lies in maintaining a capacity for continuous learning and self-improvement, shifting from being at risk of “technological replacement” to becoming active “masters of technology” in the workplace.

In sum, the ultimate purpose of technological progress is to make society more efficient and equitable. Yet such progress requires appropriate constraints and guidance to stay anchored in a “people-centered” direction.

For enterprises, compliantly advancing technological upgrades is not a passive concession, but a rational choice that reduces uncertainty and stabilizes expectations. For workers, the existence of clear rules provides necessary buffers amid the tides of technological change.

Technology will inevitably reshape job structures—but it must not erode the baseline of legal and ethical norms. Beyond efficiency, space must be preserved for fairness. Striking the right balance between efficiency and equity may well be the central question that labor relations in the AI era must repeatedly answer.