Huawei and Labour Department to reach agreement out of court

Huawei Technologies South Africa says it has entered into talks with the Department of Employment and Labour to reach a settlement agreement.

The agreement includes a resolution by both parties to stay court proceedings instituted by the department against Huawei on 11 February 2022 pending the outcome of the negotiations.

The department’s court action against Huawei came after investigations revealed that 90% of its employees are foreigners.

The hiring quota for foreign-owned companies operating in South Africa stipulates that at least 60% of employees must be local.

Skills shortage 

Huawei said in a statement that it had demonstrated its extensive ICT skills transfer and training programmes to the department.

The skills transfer programme is aimed at reducing the ICT skills gap and fostering a strong digital talent ecosystem for South Africa to further embrace 5G, Cloud, AI and other 4IR technologies.

The Department of Employment and Labour has apparently acknowledged the skills transfer programme and advised Huawei to expand this further in their Employment Equity plan.

“Discussions are ongoing. Huawei is committed to being fully cooperative with the department, and both sides are positive that this matter will be concluded shortly,” said the Chinese tech giant.

Hiring of foreigners

But Huawei’s latest statement did not address or clarify the department’s allegations that 90% of its employyes in South Africa were foreigners, including its top five managers.

The department also accused the tech company of lying that it had a Home Affairs permit to circumvent the Employment Equity Act 40% cap on foreign hires.

“In investigating this matter, we worked with DHA to determine whether DHA had granted Huawei a permit to employ more than 40% foreign nationals, as required by the Immigration Regulations,” the department said in early February.

The department met with Home Affairs, and Trade and Industry to determine whether Huawei had committed other violations. That meeting’s outcome was clear, “all transgressions had been committed,” and the matter was referred to court.

Huawei has declined to provide further clarity on its hiring quotas citing the ongoing legal process.

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