Samsung Electronics Faces First Ever 'Union Strike' Tension Since Founding... Crucial Turning Point in Early February

Union to elect new executives on the 3rd of next month and decide future response measures
Samsung Electronics "Committed to sincere negotiations... willing to talk anytime"

The Samsung flag is fluttering in the wind in front of the Samsung Electronics Seocho building. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Lee Hye-young] 'The company's first-ever union strike or a dramatic agreement?'

Confusion continues as Samsung Electronics' labor and management have failed to reach an agreement in wage negotiations that have been ongoing since last year.

According to industry sources on the 30th, the National Samsung Electronics Union under the Korean Federation of Metalworkers' Unions, the largest union within Samsung Electronics, will hold a temporary delegates' meeting on the 3rd of next month to elect new executives. The newly appointed union executives will lead discussions on future plans, including additional negotiations with management and the possibility of a strike.

In August last year, Samsung Electronics' labor and management signed their first collective agreement in the company's 52-year history, and wage negotiations have been underway since October of the same year. As a vote on the management's final proposal took place last week, there was speculation about the possibility of concluding the first labor-management wage agreement. However, the overwhelming 90.7% opposition from union members caused the agreement to fail.

The management's final proposal included a plan to support the union development fund with 30 million KRW and discussions on the wage peak system and improvement of employee rest rights through a labor-management win-win consultative body. However, the union's demands for a uniform 10 million KRW annual salary increase and a 25% annual performance bonus based on operating profit were not reflected.

The company reportedly maintained the position that, aside from the existing 2021 wage increase determined by the labor-management council composed of employee representatives in March last year, additional increases are difficult.

Following the rejection of the proposal in the union member vote, the union chairman immediately resigned, and an emergency committee was formed.

In a statement issued shortly after its launch, the emergency committee declared, "Dialogue between labor and management has now broken down," and warned, "We will secure the legal right to strike by applying for mediation with the Central Labor Relations Commission and organize a greater struggle against the company."

The emergency committee also mentioned the 300% additional incentives paid to employees in the Memory Division, criticizing, "The company has been making excuses during wage negotiations that there is no room for wage increases," and added, "We have been blindsided. This is mocking the union and employees." They also demanded that "CEO Kyung Kye-hyun meet and communicate directly with the union."

Going forward, the union is expected to consider applying for mediation with the Ministry of Employment and Labor's Central Labor Relations Commission. If differences between labor and management are not resolved during mediation and a 'mediation termination' decision is made, the union will legally secure the right to strike. If an actual strike occurs, it will be the first strike in Samsung Electronics' history.

However, even if a strike materializes, its impact is expected to be limited. Currently, the National Samsung Electronics Union has about 4,500 members, which is approximately 4% of the total Samsung Electronics employees in South Korea (about 114,000).

Samsung Electronics stated, "We are sincerely engaging in negotiations with the labor union and are willing to communicate with the union at any time."

Meanwhile, union activities have been gaining momentum at Samsung since Vice Chairman Lee Jae-yong's declaration in 2020 to abandon the 'no union management principle.' Earlier, the Samsung Display union, with about 2,500 members, conducted a small-scale strike for over two weeks in June last year but eventually agreed to the company's existing wage increase rate and signed a wage agreement.

This content was produced with the assistance of AI translation services.