Huawei brought to trial in South Africa for recruitment practices

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South Africa has asked a court to fine the local unit of China’s Huawei Technologies for violating rules on hiring local workers and order the company to change its practices, the labor department said on Friday. Roughly 90 percent of the company’s employees were foreign nationals, violating “employment fairness” rules that impose a cap of 40 percent, the department said, citing a 2020 audit.

The department said it had filed court papers seeking a fine of ZAR 1.5 million (approximately Rs. 75,00,100) or 2 per cent of the local company’s annual turnover in 2020 for the alleged breaches of the rule.

“We are asking the honorable court to give them an order saying they must implement an employment equity plan that will correct the status quo,” labor department advocate Fikiswa Mncanca-Bede told Reuters by telephone.

In a brief statement, Huawei South Africa said it is “committed to continuing to further engage with the Department on our equity plan. huawei agrees to comply with local laws and regulations.”

The department said Huawei was granted a permit in accordance with Immigration Regulations provisions that require it to employ 60 percent South Africans and 40 percent foreign nationals.

Instead, he said, Huawei had been employing far more than that number of foreign workers and had plans to hire more.

“The Department has determined that its cause of action is clear and that all violations have been committed,” he said.

The move is the first time the South African government has filed a legal challenge against the Chinese tech giant, which is dealing with US sanctions over allegations that the Chinese government could use the company’s equipment for espionage.

Huawei and Beijing have repeatedly denied the allegations.

However, the labor department has cracked down on a smaller Chinese company on charges of poor working conditions and human trafficking at its factory in Johannesburg. That case is still in court.

Huawei is one of the leading information and communications technology players in South Africa, selling a wide range of products, from mobile phones, smart devices, televisions, and telecommunications equipment to cloud computing and data storage solutions.

It has not publicly stated the number of people it employs in South Africa.

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