(Yicai Global) Sept. 12 -- A court in Shanghai will preside over an arbitration case which the legal industry is calling the first dispute concerning the replacement of human labor by artificial intelligence, China Economic Weekly reported.

A data analyst surnamed Wang went to the court in July following the termination of his employment contract at a well-known department store where he had worked for 13 years. An AI system replaced his data collection and analysis role at the company.

The firm began using an enterprise resource planning system in early 2017, which was able to undertake all data collection work without the need for human labor.

"In terms of time, the work requires eight hours if it is done completely by human efforts but with the new system, it only took around 10 minutes to complete the work," the court heard.

After the work was replaced by the intelligent system, there was no longer a need for the use of human labor, Wang's company said.

The enterprise removed Wang from his position in January 2017, and then terminated his contract in May on the grounds that an agreement for a job transfer could not be reached and he was then paid compensation.

The Labor Contract Law of the People's Republic of China states that when the objective conditions for signing a labor contract significantly changes, leading to the inability to fulfill its conditions, the employer may terminate the contract with 30 days' notice. This is if related consultations fail to reach an agreement on adjustments to the contract.

"One of the arguments of the case is whether using an ERP system can be identified as a significant change in the objective conditions," the arbitrator responsible for the case said to China Economic Weekly.

The final decision for AI replacement of human labor cases is not necessarily the same, he added. However, it does require a comprehensive judgment on the process leading up to the employer's contract termination and relevant evidence.

"At present, the most scientific definition of artificial intelligence has not yet been made clear. Arbitration institutions will deal with such cases according to the specific circumstances of the case, combined with the evidence, in accordance with the law," said Qiu Baohua, president of Shanghai Labor Disputes Arbitration.