A flag with Samsung's logo is seen at Samsung Electronics' headquarters in southern Seoul on May 13. [NEWS1]
Samsung Electronics is running out of cards to play to prevent a full-scale strike as negotiations with its labor union once again ended deadlocked and without an agreement — just eight days before the planned walkout.
Despite mediation talks taking place for more than 11 hours and 30 minutes on Monday and another 17 hours on Tuesday, Samsung Electronics and its unionized laborers failed to reach a deal. However, the government, which oversaw the negotiations, is still scrambling to keep discussions alive and to prevent an all-out walkout. The negotiation was overseen by the National Labor Relations Commission.
As the talks between the workers and management have not seemed promising, the option of declaring emergency arbitration has been discussed as a potential next step.
“[The commission] has failed to propose a mediated plan as it thought there was no workable compromise capable of narrowing the gap between the two sides,” an official at the National Labor Relations Commission told the JoongAng Ilbo on Wednesday.
The government added that it is still trying to keep negotiations open, as it seeks to end the standoff and avoid a large-scale strike.
“The sharpest divide appears to have centered on whether to institutionalize performance bonuses based on a set share of operating profit,” the source said.
Samsung Electronics has proposed maintaining the current operating profit incentive (OPI) system based on economic value added, while capping OPI payouts at 50 percent, according to union workers.
The company also proposed handing out a special management bonus equal to 12 percent of operating profit on top of that OPI ceiling if Samsung's semiconductor division secures the industry’s top spot this year. The payout would reportedly be distributed across divisions and business units, including seven percent at the division level and three percent at the business unit level.
Choi Seung-ho, head of the Samsung Electronics chapter of the Samsung Group United Union, leaves the National Labor Relations Commission in Sejong after failing to reach a deal with company management on May 13. [NEWS1]
Although management did put forward a richer compensation package, the proposal is still quite far from employees’ demands — a permanent bonus system tied to a fixed share of annual operating profit. Samsung’s proposal was a conditional, one-time reward, but workers have been pushing for longer-term structural changes in compensation.
“Additional dialogue with management until the end of the strike is not an option at this moment,” the union said on Wednesday.
Talks so far have failed
The first mediation has failed as the union workers have declared a break in talks. Even so, the labor commission says it plans to maintain informal contact with both sides and encourage them to return to the table for another arbitration session.
At this stage, the commission’s remaining leverage largely hinges on persuading labor and management to reopen mediation through unofficial channels. Whether the two sides continue talking before an all-out strike begins may now determine how the standoff ends.
The option of emergency arbitration
The government is also weighing the possibility of invoking emergency arbitration — a rarely-used measure — as a last resort.
Emergency arbitration can be authorized at the discretion of the labor minister. It can be imposed when a strike is deemed likely to significantly disrupt people’s daily lives or damage the national economy.
If the labor minister formally orders emergency arbitration, both sides are required to immediately suspend actions, and any strike would be barred from resuming for 30 days. The measure is one of the strongest state tools to prevent a walkout.
Samsung Electronics headquarters in Seocho District in southern Seoul on May 13. [NEWS1]
Yet the Ministry of Employment and Labor appears to be cautious about ordering emergency arbitration, as it could ignite political and legal controversy regarding restrictions on labor rights.
Emergency arbitration has been invoked only four times in Korean history. If it gets applied to the Samsung dispute, it would be the first time the measure has been used in 21 years.
Labor Minister Kim Young-hoon stressed that the “issue should be solved through dialogue” when asked about the possibility of emergency arbitration during his appearance on a YouTube show on Wednesday.
“Whether to strike or not is ultimately the union’s decision,” the minister said. “But the government will do everything in its power to facilitate talks and to prevent the [standoff] from escalating into a strike. The government will use every available moment to mediate between the two sides, both publicly and behind closed doors.”
Pressure to continue talking
Government officials are moving urgently to prevent the strike as it draws closer.
“A strike must never happen,” Finance Minister Koo Yun-cheol wrote on his social media on Wednesday.
“Under all circumstances, the government vows to support to solve the issue through principled negotiation,” said Koo, who doubles as deputy prime minister.
Prime Minister Kim Min-seok speaks during an emergency economy meeting held in central Seoul on May 13. [NEWS1]
On Wednesday, Prime Minister Kim Min-seok also convened an emergency inter-ministerial meeting to discuss a potential full-scale strike at Samsung Electronics.
“Do everything possible to ensure talks between labor and management continue so the dispute does not escalate into a strike under any circumstances,” Kim said.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
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