Samsung Electronics, Having Signed a Collective Agreement, Begins Wage Negotiation Procedures with Union This Week

Discussion on Negotiation Schedule for 2021 Wage and Welfare Benefits Talks

Samsung Electronics is taking a commemorative photo after signing a collective agreement with the labor union on the 12th of last month. [Photo by Samsung Electronics]

[Asia Economy Reporter Kim Heung-soon] Samsung Electronics is set to enter formal wage negotiations following its first-ever collective agreement with the labor union last month since its founding.

According to industry sources on the 5th, Samsung Electronics' labor and management will finalize a detailed negotiation schedule this week for the 2021 wage and welfare benefits talks. Earlier, the National Samsung Electronics Union under the Korean Federation of Metalworkers' Unions submitted a negotiation request for wage and welfare benefits to the company on the 26th of last month. Upon receiving the negotiation request from the union, the company must publicly announce this fact internally for one week and proceed with related procedures in accordance with the Labor Union Act.

Until now, Samsung Electronics has determined annual wage increase rates through its internal autonomous body, the Labor-Management Council, without wage negotiations with the union. However, after Vice Chairman Lee Jae-yong officially declared last year the end of no-union management, the union within Samsung Electronics has rapidly grown in strength and is accelerating the process of conducting negotiations. The National Samsung Electronics Union, the largest within the company, has increased its membership to about 4,500 members within two years of its establishment.

At the beginning of this year, the Samsung Electronics Labor-Management Council agreed on a total 7.5% wage increase for 2021, consisting of a basic increase rate of 4.5% and a performance increase rate of 3.0%. The union plans to demand a higher wage increase than what the Labor-Management Council agreed upon in the upcoming wage negotiations, which are expected to start soon. Specific figures have not been determined. Consequently, conflicts of opinion between labor and management are inevitable.

Earlier, on the 12th of last month, Samsung Electronics signed a labor-management collective agreement. This was the first time in the company's 52-year history that CEO Kim Hyun-suk personally attended the signing ceremony and announced a 'Joint Declaration of Labor-Management Harmony.'

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