By Nqobile Dludla

JOHANNESBURG (Reuters). South Africa’s labour ministry is negotiating an agreement out of court with a Chinese subsidiary, Huawei Technologies. It claims that it has not adhered to the local hiring quotas. This was disclosed by a government official.

South Africa now has the highest level of unemployment in its history since 1994 when white minority rule ended. The authorities brought Huawei Technologies South Africa before the courts this month. It stated it did not meet the requirements that South Africans must make up 60% of all workers.

Fikiswa Mncanca–Bede, a labour lawyer, said that Reuters’ officials met on Monday with representatives from Huawei Technologies South Africa.

She said, “We are still in negotiations for a settlement outside of court with certain conditions.” “(The) case was stayed until we reached an agreement.”

Mncanca Bede stated that the department hoped to end negotiations Friday.

Huawei’s Shenzhen based parent company referred a Reuters comment request on the claims and discussions with the labor department to its local subsidiary.

Huawei Technologies South Africa said it was in talks with the parties to reach an agreement and that the matter had been suspended pending resolution.

It stated in an email that “Discussions continue, Huawei is committed and will cooperate fully with the Department. We are confident that this matter can be resolved soon.”

However, the company refused to comment and said it couldn’t comment on ongoing legal matters.

The labour department cites a 2020 audit that shows foreigners make up almost 90% of Huawei Technologies South Africa workforce.

For the rule violations, it had sought a fine in the amount of 1.5 million rand ($99547) or 2.2% of the annual 2020 turnover of the local company.

Huawei and ZTE Corporation (HK:) Corporation are two Chinese companies that have contributed to the majority of Africa’s telecommunications infrastructure. They are expected to play an important role in Africa’s digital transformation, according to experts.

‘NON-COMPLIANT’

Reuters found court documents that the authorities used to file their case against the company. They accused the company of not complying with local employment regulations.

The court files show that the labour department demanded from Huawei Technologies South Africa in January 2020 and February 2021 that a plan be developed to deal with the low representation of people and groups who were discriminated under apartheid.

The company received a notice from the labor department on May 18th, 2021 that was attached to court papers. It claimed they had extended the deadline to make sure the plan met all requirements.

According to the labour department, the court was presented with the updated 2020-2022 Huawei Technologies South Africa hiring plan.

According to the document, the company was planning on hiring 44 South Africans. This is roughly half of all the planned hires during that time. This would create a workforce of 652 international nationals and 112 natives in September 2022.

It stated that the company will ensure effective recruitment and would train and encourage members of previously disadvantaged group to high-ranking positions.

Huawei Technologies South Africa sent a separate note to the department on February 20, 2021 explaining that its foreign employees were required to support the rollout of cutting-edge technologies, including 5G and artificial intelligence.

According to court documents, the letter reiterated that their skills would be transferred to designated groups by the company’s skill transfer plan.

Before settlement negotiations began, the company hadn’t filed papers to court.

($1 = 15.0683 rand)