A Chinese court ruling that outlaws companies from demoting or firing employees solely to replace them with artificial intelligence has reignited the debate over the technology’s impact on labour markets — and whether Canada is failing to respond quickly enough.
The ruling, posted online last week by the Hangzhou Intermediate People’s Court, sided with a senior technology worker who was offered a reduced salary and job transfer when his employer sought to automate his role with AI. The worker’s employment was terminated after he refused the offer.
The case clarified that “the development of artificial intelligence technology is intended to liberate labour, promote employment, and benefit people’s livelihoods,” the ruling says.
“Labour law allows employers to undertake technological changes and upgrade their operations, but it should also consider protecting the legitimate rights and interests of workers,” it added, noting businesses should prioritize retraining and “reasonable” reassignment and compensation plans for workers over termination.
The ruling comes as businesses around the world are adopting AI for efficiency and cost effectiveness at a breakneck pace, sometimes at the expense of employees.
In North America, tech firms such as Block have begun explicitly citing AI as the reason behind significant layoffs, which labour experts have told Global News is the latest step in a decades-long trend of automation moving from blue-collar to white-collar industries.
The Chinese court ruling doesn’t change that trend, said Moshe Lander, an economics professor at Concordia University, but it does underscore the need for some kind of regulation.
“If you’re trying to slow down the inevitable, you’re doomed to fail,” he said.
Get breaking National news
Get breaking Canada news delivered to your inbox as it happens so you won’t miss a trending story.
“I think what’s much more important is to recognize, that yes, (AI-fuelled automation) it’s coming, there need to be some sort of protections in place, but not necessarily protections of your job. It’s protections of your income or protections of your ability to live” and work alongside AI.
Indeed, the Chinese ruling doesn’t forbid companies from using AI to automate certain roles held by humans, it just mandates that it’s done responsibly.
Workers, the ruling says, “should also understand the strategic development needs of enterprises, continuously update and improve their professional skills through continuous learning, proactively adapt to the changes in artificial intelligence technology, promote the efficient application of AI technology in production practices, and foster a win-win situation of personal career growth and efficient enterprise development.”
Lander said the ruling, which was issued ahead of China’s Labour Day on May 1, was likely a messaging and “self-preservation” exercise for the ruling Chinese Communist Party given the potential widespread impact of AI-led labour disruptions.
“There’s so many potential people that could be caught up in this that the risk of civil unrest, the risk of regime overthrow, is probably much more paramount to them than concern for the actual worker itself,” he said.
“In Canada, we’re a democracy and we’re not necessarily worried about regime overthrow in the same way, other than through the ballot box.”
Simon Blanchette, a management faculty lecturer at McGill University who researches AI and the future of work, said that democratic structure would also make legislating and enforcing a similar ruling in Canada extremely difficult.
He noted provinces, municipalities, industries and unions would all have to play a role in the creation and execution of such guardrails.
“In terms of practicality and the real outcome and externalities of it, it remains to be seen what would be the benefit tangibly,” he said.
“I think there other ways we could be exploring to help workers more, and have a more ‘AI-ready’ future.”
That includes educating and reskilling workers for a future where AI is adopted across industries, he said.
Yet Lander noted that social safety net programs like employment insurance should also be modernized to recognize certain industries will be disproportionately impacted by AI.
“If the government is really trying to implement something that’s meaningful, that’s going to take us through the next 50 years, it’s a lot more than protecting workers’ rights,” he said.
“It’s thinking about which workers’ rights actually need protecting and which ones are we just sending out to be slaughtered in the battlefield.”
Canada’s Artificial Intelligence Minister Evan Solomon said this week that the promised new federal AI strategy will consider the technology’s impacts on the labour market.
“We are making sure that when we launch this strategy, there’s an element … that it will meet the changing needs of labour and all the stakeholder groups,” he said.
Solomon said the strategy will be released “very soon,” after previously promising it would come at the end of last year and then in the first quarter of this year.
He said the impact of AI has been changing and he is still consulting on the strategy, citing recent meetings with labour leaders, environmentalists and young people.
“Even when we did our consultations, the industry has changed dramatically. The impact of AI has changed and we are consulting,” he said.
Experts like Lander and Blanchette, as well as others Global News has spoken to recently about the delayed strategy, agree that the government needs to step up its urgency in enacting guardrails around AI and its myriad, society-wide impacts.
“AI today is as weak as it will be in our lifetime,” Blanchette said. “Tomorrow it will better, the day after it will get better. So we need to face the (inevitable).
“At the same time, yes, we need legislation. We need to protect the public.”
—with files from the Canadian Press
© 2026 Global News, a division of Corus Entertainment Inc.
