President Lee Jae Myung during a combined Cabinet meeting and emergency economic review session held at the Blue House on May 20 [YONHAP]
Samsung Electronics' labor union and management reached a last-minute agreement after weeks of negotiations, following multiple levels of government intervention, including direct pressure from President Lee Jae Myung, who urged both sides to reach a deal that would not damage the domestic economy.
"We understand that the tentative agreement was reached because labor and management made concessions," Presidential spokesperson Kang Yu-jung said at a briefing Thursday. "We see this as the result of both sides' efforts, as well as active cooperation from the government, namely Employment and Labor Minister Kim Young-hoon."
The deal, made on late Wednesday evening, averted a planned 18-day strike by tens of thousands of Samsung Electronics workers that had threatened the world's largest memory chip maker during one of its most profitable periods in its history.
President Lee had been sending repeated messages throughout the talks, pressing both sides toward an agreement.
"If some organized workers make excessive or unfair demands, trying to look out only for themselves and draw public criticism, it harms not just that union but other workers as well," the president said on April 30, flagging the possibility that the Samsung Electronics union's demands were excessive.
During an internal meeting at the Blue House recently, Lee laid out his mediation principles explaining specifically what he could accept from the union's demands and what he could not.
Samsung Electronics’ labour union members chant slogans during a protest against company’s compensation levels ahead of a planned lengthy strike in front of Samsung Electronics semiconductor plant in Pyeongtaek, Gyeonggi on April 23. [REUTERS/YONHAP]
"It was the president's clear position that bonuses tied to a share of operating profit itself are unacceptable, and that permanently institutionalizing the bonus distribution method is also unacceptable," a Blue House official said.
Those principles were shared with the Employment and Labor Ministry and the Central Labor Relations Commission, which mediated the talks. And on Monday — three days before the union's planned general strike — with negotiations dragging, Lee weighed in again.
"Labor must be respected as much as business, and business management rights must be respected as much as labor rights," he said, urging both sides to reach an agreement as a strike loomed.
Even so, progress remained slow. As late as Tuesday night, the government was leaning toward preparing for a breakdown in negotiations. It was planning an emergency response meeting to discuss the broader economic fallout and whether to invoke emergency adjustment powers. But the mood shifted on Wednesday after the Central Labor Relations Commission's post-mediation talks resumed.
Samsung Electronics' Seocho office in southern Seoul [NEWS1]
Lee, who held a summit with Japanese Prime Minister Sanae Takaichi on Tuesday, returned to the Blue House on Wednesday morning and received regular updates on the commission's talks.
The situation turned negative around noon when the second round of post-mediation talks collapsed and the union announced it would "go ahead with the general strike as planned [on Thursday] in accordance with the law."
At the Cabinet meeting at 2 p.m. that day, Lee finished his prepared opening remarks and then said he had "one more thing to add" before launching into a pointed statement, in which he laid out clearly the government's mediation principles.
"Distributing a fixed share of operating profit as an institutional matter? Even investors can't do that," he said, calling the union's demand for 15 percent of operating profit as performance bonuses "incomprehensible."
After Lee's remarks, Kim, the labor minister, moved quickly. Talks resumed at 4 p.m. under his mediation, and at around 10:45 p.m., the two sides signed the tentative wage agreement.
Samsung Electronics' management negotiator Yeo Myung-koo, left, and Choi Seung-ho, right, head of the Samsung Electronics chapter of the Samsung Group United Union, pose for a photo at the Ministry of Employment and Labor office in Suwon, Gyeonggi, after signing a tentative wage agreement on May 20. [NEWS1]
The tentative agreement reflected Lee's principles.
Instead of distributing operating profit itself, the two sides agreed to use 10.5 percent of a jointly selected "business performance" indicator as the source for special performance bonuses.
The bonus distribution method will be applied for 10 years rather than being permanently institutionalized, as the union had demanded.
The deal also includes a condition: Bonuses are triggered only when operating profit reaches 100 trillion won or 200 trillion won ($66 billion or $133 billion), depending on the period.
However, the Blue House did not greet the agreement with unreserved applause.
"The controversy surrounding Samsung’s management performance bonuses extends beyond a labor-management issue to a significant part of social debate, and the entire public has witnessed the severe conflict that arose in handling this matter," Kang 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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