Labor And Management Meet On May 18 To Avert A May 21 Strike Over Performance Pay Rules
Pictured on May 15, executives of Samsung Electronics’ DS Division are seen meeting and speaking with the Joint Struggle Headquarters of the Samsung Electronics Labor Union. (Photo = Samsung Electronics)
Samsung Electronics’ labor and management are entering cliff-edge negotiations three days before the general strike scheduled for May 21. This round of bargaining is expected to serve as the last watershed moment to prevent disruptions to semiconductor production and damage to the national economy.
On May 18 at 10 a.m., Samsung Electronics’ labor and management will hold a second post-mediation conference at the National Labor Relations Commission at the Government Sejong Complex, attempting last-minute coordination of remaining differences. The meeting was arranged after the first mediation concluded without results, with intervention by the Ministry of Employment and Labor converging with management’s willingness to engage in dialogue. Should this round of mediation also fall through, the union plans to proceed with the large-scale show of force as announced.
In consideration of the urgency of the matter, the National Labor Relations Commission will have Chairperson Park Su-geun personally attending to conduct intensive mediation. On the management side, Yeo Myeong-gu, head of the DS People Team overseeing personnel for the semiconductor division, has been deployed to the negotiating table, while on the labor side, Choi Seung-ho, chairperson of the inter-enterprise union, will personally attend to lead the talks. Both sides have dispatched their core decision-makers, underscoring the pressure they feel to reach a settlement.
The central issue can be summarized as whether to formally codify the criteria for performance pay disbursement. The union is demanding that 15% of operating profit be formally designated as the source of funds for performance pay and that the current cap of 50% of annual salary be abolished. Management, on the other hand, has pledged top-level compensation but expressed reluctance to enshrine this in written regulations, arguing that doing so could reduce flexibility in a rapidly changing business environment.
The government signaled its concern over the economic fallout from a potential strike and hinted at the possibility of a strong response. Prime Minister Kim Min-seok stated in a public address that a strike could cause losses of up to 100 trillion won (approximately $71.4 billion) and announced that the government would invoke emergency adjustment powers if necessary. If emergency adjustment powers are invoked, the union’s industrial action must cease immediately, and it would be compelled to accept the mediation proposal put forward by the National Labor Relations Commission.
Samsung Electronics Chairman Lee Jae-yong, immediately upon returning from an overseas trip, delivered a message of mutual cooperation and appealed for resolution of the situation. Chairman Lee emphasized that all responsibility lies with him and that labor and management must move in the same direction. However, the union has characterized the government’s mention of emergency adjustment powers as pressure and has not backed down from its resolve to fight, suggesting the negotiation process will be rocky.
The outcome of today’s talks will be a decisive variable determining the future direction of Samsung Electronics’ labor-management relations. If a dramatic agreement is reached, the May 21 general strike will be called off, and labor and management will lay the groundwork for cooperative coexistence. This could serve as a positive signal that removes uncertainty during the semiconductor industry’s recovery phase.
On the other hand, if negotiations ultimately break down, Samsung Electronics will face an unprecedented situation — the largest-scale strike in the company’s history. This is likely to be followed by the government’s invocation of emergency adjustment powers and a direct confrontation with a union that opposes such action, with labor-management conflict entering a prolonged phase. The industry is closely watching the far-reaching impact this showdown could have on the broader domestic industrial sector.
Jung Suk-yee
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