South Africa in talks with Huawei subsidiary to settle hiring lawsuit

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JOHANNESBURG – South Africa’s labor department is negotiating a possible out-of-court settlement with a subsidiary of Chinese company Huawei Technologies Co Ltd, which it accuses of failing to meet local hiring quotas, Huawei and an official said. government to Reuters.

South Africa is facing its highest unemployment rate since the end of white minority rule in 1994. Authorities took Huawei Technologies South Africa to court this month, saying it had no meets the requirement that 60% of workers must be South African.

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Fikiswa Mncanca-Bede, a lawyer with the labor department, told Reuters her officials met with representatives of Huawei Technologies South Africa on Monday.

“We are still negotiating an out-of-court settlement with certain conditions,” she said. “(The) case has been put on hold until we reach an agreement or not.”

Mncanca-Bede said the department aims to conclude negotiations by Friday.

Huawei’s Shenzhen-based parent company forwarded a request for comment from Reuters on the allegations and discussions with the labor department to its local subsidiary.

Huawei Technologies South Africa has confirmed that it has “entered into talks to reach a settlement agreement” and that the legal case has been put on hold pending an outcome.

“Discussions are ongoing, Huawei is committed to full cooperation with the Department and we are confident that this matter will be concluded shortly,” he said via email in response to questions.

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During Monday’s meeting, Huawei “demonstrated its” extensive ICT skills transfer and training programs that aim to bridge the ICT skills gap and foster a strong digital talent ecosystem for South Africa. Sud is increasingly adopting 5G, Cloud, AI and other 4IR technologies,” the company said in a separate statement, referring to information and communications technology.

This has been recognized by the Ministry of Labour, which has advised Huawei to expand this further in its employment equity plan, he added.

The company declined to respond to the allegations, saying it could not comment on an ongoing legal matter.

Citing a 2020 audit, the Department of Labor says foreign nationals make up nearly 90% of Huawei Technologies South Africa’s workforce.

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He was seeking a fine of 1.5 million rand ($99,547) or 2% of the local company’s 2020 annual turnover for the alleged breaches of the rules.

Huawei and ZTE Corporation, another partly state-owned Chinese company, have built most of Africa’s existing telecommunications infrastructure. Experts generally agree that they will play a vital role in the future digital transformation of the continent.

‘IMPROPER’

Court documents seen by Reuters showed authorities filed their complaint after accusing the company of failing to take steps to bring it into compliance with local employment rules.

In December 2020 and January 2021, court records show that the Department of Labor asked Huawei Technologies South Africa to develop a plan to address the under-representation of locals and discriminated groups under apartheid.

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Despite obtaining an extension to ensure the plan met Labor Department requirements, the company was “still found to be non-compliant,” according to a final department notice dated May 18, 2021 and attached to court documents. .

The Labor Department submitted to the court what it said was the revised 2020-2022 hiring plan that Huawei Technologies South Africa was to draft.

The document showed that the company planned to hire 44 South Africans, or about 60% of planned hires for this period. This would translate to a workforce of 652 foreign nationals and 112 locals by September 2022.

The plan said the company would “ensure that effective recruitment is carried out” and added that it would seek to train and promote South Africans and members of previously disadvantaged groups into leadership positions.

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In a separate letter sent to the department in February 2021, Huawei Technologies South Africa explained that its foreign workers were needed to ensure the deployment of “advanced technologies”, including 5G, artificial intelligence and robotic process automation. .

He reiterated that their “skills will be transferred to designated groups through the company’s skills transfer plan,” according to a copy of the letter included in departmental court documents.

The company had not filed any documents in court in response to the lawsuit before settlement talks began. ($1 = R15.0683) (Reporting by Nqobile Dludla in Johannesburg Editing by Promit Mukherjee, Mark Potter and Matthew Lewis)

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