"Request for 15% Wage Increase"… Samsung Electronics Labor-Management Council Proposes Highest Raise Rate Ever

Labor Committee Worker Representatives Propose Basic Wage Increase Rate of 15.72%

[Image source=Yonhap News]

[Asia Economy Reporter Lee Hyeyoung] The employee representatives of the Samsung Electronics Labor-Management Council have decided to propose the highest wage increase rate in history to the management this year. This comes amid the initiation of adjustment procedures following a breakdown in wage negotiations with the union, raising the possibility of the company's first-ever strike since its founding, drawing attention to the direction of labor-management issues.

According to industry sources on the 9th, the employee representatives of the Labor-Management Council, composed of employee delegates, recently notified executives and staff that they will propose a basic wage increase rate of 15.72% this year.

The wage increase rate proposed by the Labor-Management Council is the highest ever and more than double last year's final agreed increase rate of 7.5% (basic increase rate 4.5% + performance increase rate 3.0%). Last year's increase rate was also the largest in the past decade.

The council reportedly proposed this increase rate considering Samsung Electronics' record-high performance last year and employees' dissatisfaction with the performance reward system. The council plans to convene a meeting soon to continue detailed discussions on this year's wage increase rate and other matters.

The Labor-Management Council is a body where user representatives representing the company and employee representatives representing the workers negotiate working conditions such as wages. Although multiple unions are active at Samsung Electronics, none have a majority of employees as members. Therefore, employee representatives for the council are elected through voting, and the council has set the annual wage increase rate around February to March each year.

In addition to the basic increase rate (15.72%) this year, the council plans to request the company to revise fixed overtime pay and the wage peak system, increase transparency in the performance increase rate system, and introduce summer vacation, among other demands.

These unprecedented demands have emerged amid ongoing conflicts between the company and the union. The Samsung Electronics union joint bargaining group, which began wage negotiations last year, demanded a uniform annual salary increase of 10 million KRW, a 25% performance bonus based on operating profit every year, and disclosure of the performance bonus payment system. However, the company maintained its position that additional increases beyond the previously agreed wage increase rate with the Labor-Management Council are difficult.

The union applied for mediation to the Central Labor Relations Commission of the Ministry of Employment and Labor to secure the legal right to strike. Both sides will conduct the first and second mediation sessions on the 11th and 14th respectively, and if no agreement is reached, the union may proceed with industrial action. Meanwhile, the union coalition composed of unions from 12 Samsung Group affiliates presented six joint demands, including a common 10% wage increase for 2022, a 20% pre-tax payment of excess performance bonus (OPI), and extension of the retirement age to 65.

There is also a possibility of cooperation between the union and the employee representatives of the Labor-Management Council. The National Samsung Electronics Union, the largest union within Samsung Electronics, recently officially proposed cooperation to the employee representatives of the Labor-Management Council at the Giheung and Hwaseong plants to improve working conditions. The union pointed out that Samsung Electronics' wages and welfare are inferior compared to competitors and emphasized that the Labor-Management Council and the union must join forces to resolve the issues.

An industry insider said, "Although adjustments will be made through internal discussions and consultations with management, the ongoing related issues have become a considerable burden for Samsung Electronics."

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