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Huawei in hot water for former employee’s eight-month detention (updated)

The former employee was kept in jail for 251 days and later released due to a lack of evidence.

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Shenzhen-based telecommunication infrastructure provider and world’s second-largest smartphone vendor Huawei has been under fire since a legal dispute with a former employee was exposed last week.

The case involved Huawei and former employee Li Hongyuan, who was kept in jail for 251 days, between December 16, 2018, and August 23, 2019, after Huawei reported to the Shenzhen police that Li was suspected of committing extortion to get RMB 300,000 (USD 42,570) in layoff compensation.

Li, who worked with Huawei’s sales department for inverters, a marginal business of the company, was later released as local prosecutors declined to sue him due to lack of evidence.  The former Huawei employee got RMB 100,000 as a “national compensation” on November 25 for being wrongly jailed.

The dispute went mostly unnoticed, until Li shared a copy of the compensation decision to an online WeChat chat group, also including Huawei’s former employees, on November 28. Without his knowledge, the copy was later shared with some Chinese media outlets, which reported the story, gaining widespread attention from Chinese netizens.

Approached by the media outlets, Li explained other details about his case. According to him, he started to work for Huawei in October 2007, and used to renew his contract every four years. In 2016, he claimed to have reported to Huawei’s higher executives that some of his colleagues were involved with some corruption cases, after which he got marginalized.

In 2018, Huawei decided not to renew Li’s contract. Li demanded a 2N compensation (N represents how many years one employee works for a company), as indicated by China’s labor law, under which companies are demanded to sign unfixed-term employment contracts with employees who have served the same company for more than 10 years, Li said.

In March 2018, Li received RMB 300,000 in the form of “compensation for leaving the company”, but this money came from a Huawei employee’s personal bank account, not from Huawei directly, according to Li, who added that he did not know the reason behind this. Reportedly, Huawei denounced Li to the Shenzhen police, indicating that Li committed extortion by taking this sum of money, and adding that the former employee threatened his department leader to provide the money amount.

Li defended himself with his lawyers, handling over an audio recording of Li’s conversations with a Huawei HR employee that happened in January 2018, which turned to be in favor of Li.

Chinese public opinion quickly took Li’s side after listening to his story, especially after other similar conflicts went mainstream recently, such as the case of an ill former NetEase employee, who also reported an unfair termination of his contract after being diagnosed with dilated cardiomyopathy (DCM), a disease affecting the heart’s ability to pump blood.

Huawei’s reaction also didn’t help, as the company first remained mute, and then replied on Monday that the firm has the right and obligation to report practices it suspects of being illegal to China’s judicial authorities. Huawei also added that if Li thinks his rights have been violated and offended, he is welcomed to resort to legal means, including suing the company.

This response further enraged the public, including several Chinese media outlets.

The Paper commented that Huawei did not have sympathy as it even refused to apologize to its former employee who was unfairly jailed, adding that Huawei acted “horribly”. Youyouluming commented that Huawei’s response, which was unprecedented in China’s corporate history, showed that “Huawei has been finally spoiled”, in relation to Huawei’s CFO Meng Wanzhou detention case.

Yufucaijing wrote that the “251 incident” could lead to a fatal public relation crisis, even more serious than the current sanctions imposed by the United States.

You Yunting, a lawyer of Shanghai Debund Law Firm told The Paper that Huawei should not have turned a civil dispute with its former employee into a criminal case, adding that the move only showed the existing problems in Huawei’s corporate culture and internal control mechanisms.

After reading Huawei’s response from the media, Li told Tencent News on Tuesday that he does not know what to do next, as Huawei is refusing to communicate directly with him, adding that “Freedom is the only thing I want.

Li also told The Paper that he will return to his hometown in Zhejiang province, and will stop taking actions over the issue. Previously, he and his wife said that they wanted to receive an apology from Huawei, remarking that they had no intention to sue the company.

At a press conference held at Huawei’s headquarters in Shenzhen on Thursday morning, Huawei’s chief legal officer Song Liuping thanked the public for paying attention to the case involving Li and emphasized that this is not a labor dispute case.

He said that the company has explained clearly in the statement that Huawei suspected that its former employee has conducted illegal practices, and has thus reported that to the police. Song didn’t release further comments.

This report was updated on December 5 to include recent developments.