South African authorities sue Huawei over foreign employee quota

South Africa’s labour department has sued Chinese multinational technology group Huawei Technologies’ local business over alleged employment rule breaches.

The Chinese tech giant has about 90% foreign nationals at its South Africa unit, including all five top management officials, the Department of Employment and Labour said in a statement on Friday. This exceeds the maximum quota of 40%. 

The labour department said that Huawei was granted a permit in accordance with the provisions of the Immigration regulations that required the company to employ 60% South Africans and 40% foreign nationals, but it had been employing far above that number and had plans to further increase it.

Per Bloomberg, the department has filed court papers in Johannesburg, according to Advocate Fix Bede, who is representing the government. It wants the judge to order Huawei to comply with the employment rules and pay a fine of 1.5 million rand ($99,000) or 2% of the unit’s revenue, whichever is greater, she said. 

This is the first time the South African government has made a legal challenge against the Chinese tech giant. This move is part of the South African government’s recent increase in scrutiny on immigration, in the bid to placate voters ahead of the 2024 elections. In November, the government ended a 12 year program to enable about 200,000 Zimbabweans to live and work in the country. 

South Africa has a population of about 60 million, about 3 million are migrants, according to the national statistics agency. Home Affairs Minister Aaron Motsoaledi said this week it would look at employment quotas for foreign nationals.