Delicate balance as the country seeks foreign skills, but hauls Huawei to court over its lack of equity compliance

14 February 2022 by Philippa Larkin

THE Department of Employment and Labour on Friday filed papers in court against Chinese tech giant Huawei Technologies’ South African unit for alleged employment equity violations, in what it said was a “strong message” to all companies operating in South Africa that they must abide by the law.

Labour Department advocate Fikiswa Bede said on Friday that Huawei Technologies South Africa (Huawei) faced a potential fine of R1.5 million, or 2 percent of the local firm’s annual 2020 turnover (whichever is greater) for the alleged violations.

The case comes at a tricky time for South Africa as it seeks to attract more foreign skilled workers to the country, as well as – through the Department of Home Affairs (DHA) and the Department of Labour – clamp down on compliance with regulations.

On Friday, the Department of Employment and Labour said Huawei had violated the Employment Equity Policy after an audit in 2020 found the company’s workforce comprised 90 percent foreign nationals.

The assessment report showed that all of Huawei’s top management, five executives, were foreign nationals.

At the professional qualified level, out of 435 employees, 87 percent were foreign, while at the skilled-technical level, 138, or 76 percent of them, were foreign.

However, what got the department hot under the collar was Huawei’s legal department which, when questioned about the number of foreign nationals it employed, said it had been granted permission to do so by the DHA.

The DHA said this was false, and that Huawei had been granted a permit which required them to employ 60 percent South Africans and 40 percent foreign nationals.

After a meeting between the departments of Employment and Labour, Home Affairs and Trade and Industry to determine whether Huawei had broken any other national laws administered by the Department of Trade and Industry, it was decided to refer the case to court.

However, the Department of Employment and Labour on Friday emphasised that it was “a government department that is hard at work, striving for a labour market that is conducive to investment, economic growth, employment creation and decent work”.

Vanashree Govender, media and communications manager at Huawei South Africa, said on Friday: “Huawei has taken note of the media release by the Department of Employment and Labour.

“We are committed to continue engaging further with the department on our equity plan. Huawei is committed to complying with local laws and regulations.”

In his State of the Nation address last week, President Cyril Ramaphosa said the government was also introducing other visa reforms to make it easier for people to enter the country.

Source: IOL at https://www.iol.co.za/business-report/companies/delicate-balance-as-the-country-seeks-foreign-skills-but-hauls-huawei-to-court-over-its-lack-of-equity-compliance-d76a3f61-4fc7-4702-8e49-184ea2cddd1c?fbclid=IwAR0LbiAUQwC-Dn-ZtJboseUbAFcK_82SHbJactihAmLJRTP0XSX91jW80as