Mediation Talks Break Down Over Bonus Dispute on May 20
As Samsung Electronics rejected the post-mediation proposal of the National Labor Relations Commission, the general strike that the labor union decided to push ahead with starting on May 21 has become unavoidable. The photo shows the headquarters of Samsung Electronics. (Business Korea DB)
As the management of Samsung Electronics rejected the final mediation proposal of the National Labor Relations Commission, South Korea’s largest company is facing an unprecedented general strike. The Samsung Electronics Branch of the Samsung Group Multi-Enterprise Labor Union officially declared the end of post-mediation and plans to launch a strike starting on May 21 as scheduled.
According to industry and labor circles on May 20, labor and management of Samsung Electronics continued post-mediation meetings at the National Labor Relations Commission for three days starting on May 18 over issues such as the bonus distribution method, but ultimately failed to reach an agreement. The union will exercise its previously secured right to strike and push ahead with a strike for a total of 18 days from May 21 to June 7, and it is estimated that about 50,000 union members will participate in this collective action.
The core issue of this situation is the level of bonus payments for the deficit business units within the semiconductor (DS) division. Both labor and management remained in a standoff until the end over whether to guarantee bonuses at a level similar to that of surplus departments for employees in the Foundry and System LSI business units, which are recording deficits of trillions of won.
Choi Seung-ho, head of the Samsung Electronics Branch of the Multi-Enterprise Labor Union, made it clear through a statement that the negotiations broke down due to the management’s rejection, even though the union had agreed to the mediation proposal of the National Labor Relations Commission. Choi criticized, “The labor union did its best to find common ground, but the management only delayed time by repeating its position that a decision had not been made.”
In fact, the management extended the negotiations by requesting time for internal discussions right before the declaration of the failure of mediation, but it was confirmed that they failed to make a clear decision even by the morning on May 20. Accordingly, the National Labor Relations Commission declared the end of the post-mediation process, and the union decided to immediately take steps toward a strike.
While the union clarified its intention to push ahead with the strike, it left the possibility of dialogue open for a settlement. Choi stated that negotiation efforts would continue even during the strike period and expressed gratitude for the mediation efforts of government officials.
Meanwhile, Samsung Electronics released a statement after the negotiations broke down on this day, stating, “We consider it very regrettable that the post-mediation has ended,” and, “The company will not give up on dialogue until the last moment to prevent the worst-case scenario.” The company also explained, “Under no circumstances should there be a strike,” and, “The reason an agreement could not be reached until the last minute in the post-mediation is because the basic principle of company management could be shaken if the excessive demands of the labor union are accepted as they are.”
Samsung Electronics claimed that although the union accepted most of the size and details of the company’s bonuses, it did not yield on its demand to provide compensation of a scale that is socially difficult to accept even to the deficit business units, and that this directly violates the basic principle of company management that ‘where there is performance, there is compensation.’ The company repeatedly emphasized that the concern that giving up this principle could have a negative impact on other companies and the overall industry was the reason it could not accept the post-mediation proposal of the National Labor Relations Commission this time, and stated that it would make efforts until the end to resolve the issue by keeping the door open for additional mediation or direct dialogue with the union.
The industry is keeping a close watch on the impact this general strike will have on the semiconductor production lines. Samsung Electronics has begun preparing countermeasures to minimize production disruptions, but if a large-scale workforce of 50,000 people participates, a certain degree of impact is expected to be inevitable.
Jung Min-hee
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