CHINESE tech giant Huawei Technologies South African unit said that it had entered talks with the Department of Employment and Labour to reach a settlement agreement for alleged employment equity violations, this as the two entities navigate delicate political waters.
The department has agreed to stay court proceedings pending the outcome of the negotiations.
The issue was brought into the public arena on February 11 after the Department of Employment and Labour said it had filed papers in court against Huawei Technologies South Africa 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.
The department said Huawei had violated the Employment Equity Policy after an audit in 2020 found the company’s workforce comprised 90 percent foreign nationals.
At the time, Labour Department advocate Fikiswa Bede said 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.
This after the department’s 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, in the statement yesterday by Huawei, it said: “During the meeting, Huawei demonstrated its extensive ICT skills transfer and training programs that are 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.
“This was acknowledged by the Department of Employment and Labour, who advised Huawei to expand this further in their Employment Equity plan.”
Huawei cautioned that discussions were ongoing.
“Huawei is committed to being fully cooperative with the Department, and both sides are positive that this matter will be concluded shortly,” the tech giant said.
South Africa wants foreign and local companies to comply with its labour laws.
Early in January, the department had issued a series of statements signalling it was cracking down on compliance with labour laws and that companies must get their houses in order.
On January 25, it issued a comprehensive statement on the employment of foreign nationals in South Africa, detailing that valid work visas were required. It then proceeded with inspections, or mega blitzes, in KwaZulu-Natal, targeting the wholesale and retail sectors. This was followed by inspections of companies in the Western Cape’s hospitality sector.
This week, the department announced that Limpopo Province's Inspection and Enforcement Services was planning a week-long mega blitz inspection of the Hospitality and Road Freight sectors.
The mega blitz inspections would take place from February 28 to March 4, 2022, and would target areas throughout the province’s the Capricorn, Mopani, Vhembe, Waterberg, and Sekhukhune districts.
However, South Africa is in a Catch-22 situation as regards foreign employment.
It needs to safeguard local jobs, with unemployment at a record high and the country having witnessed civil unrest last year as the economy went South amid Covid-19.
Adding fuel to the fire is a local movement called Operation Dudula, whose members are increasingly amplifying their calls for illegal foreigners to leave South Africa - a volatile situation with all the problems linked to xenophobia.
This is a potential tinderbox that could jeopardise foreign investment in South Africa, which needs to build business confidence abroad after being shoved to the curb by state capture.
But South Africa needs to attract more foreign skilled workers to the country to kickstart its ailing infrastructure and spur a post-Covid-19 growth recovery.
And this, as President Cyril Ramaphosa’s State of the Nation Address, held earlier this month, flagged that the government would consider the adoption of remote working and start-up visas as part of a push to attract more skilled workers.
But complicating the issue, South Africa is also a member of BRICS - Brazil, Russia, India, China, and South Africa - and has to tread carefully within the minefield of diplomacy.
Quartz Africa reported that trade between Africa and China rose to a record high in 2021, according to recently released data by China’s customs agency.
“China is Africa’s largest trading partner, and last year’s growth strengthens this position,” it reported, adding that the value of trade between Africa and China rose by 35 percent from 2020 to $254 billion (R3.8 trillion) last year, mainly due to an increase in Chinese exports to the continent. This rise occurred despite last year’s global supply chain challenges and other interruptions caused by Covid-19,“ Quartz Africa said.
BUSINESS REPORT ONLINE