President Lee: "Corporate Management Rights Should Be Respected as Much as Labor Rights"...Final Samsung Labor-Management Negotiations (Comprehensive)

Constitutional Right to Share in Profits Mentioned
Second Round of Post-Mediation Begins at Central Labor Relations Commission in Sejong
Tense Standoff Over OPI and Operating Profit Distribution Ratios
Government May Invoke Emergency Adjustment Powers if Talks Collapse

President Lee Jae-myung stated, "Just as labor rights deserve respect, so do the rights of corporate management." This presidential message was delivered three days before the Samsung Electronics union’s planned general strike, as labor and management resumed post-mediation at the Central Labor Relations Commission.

President Lee Jae-myung is speaking at the senior secretaries meeting held at the Blue House on the 14th. Photo by Yonhap News

On May 18, President Lee posted on X (formerly Twitter), "In the Republic of Korea, which adopts a liberal democratic order and a capitalist market economy, labor must be respected as much as corporations, and the rights of corporate management must be respected as much as labor rights." He addressed the rights of both labor and capital together, stating, "Workers should receive fair compensation for their labor, and shareholders who have invested while bearing risks and losses are entitled to a share of corporate profits."

The president also mentioned the workers’ right to share in corporate profits, which had once been stipulated in the Constitution. President Lee said, "At one time, the constituent Constitution included a provision granting workers the right to share in corporate profits." Article 18 of the original Constitution stated that workers in for-profit private enterprises have the right to share in profits as provided by law, but this clause was deleted during the 1962 constitutional revision.

He also pointed out that basic rights may be subject to certain restrictions for the sake of public welfare. President Lee said, "While the current Constitution guarantees the basic rights of all citizens, those rights can be restricted for public welfare and other reasons, so long as the essential substance is not violated."

President Lee’s comments come at a critical juncture in the labor-management negotiations at Samsung Electronics. At 10 a.m. on this day, labor and management at Samsung Electronics entered the second round of post-mediation at the Central Labor Relations Commission in Sejong City. With the general strike announced for May 21 just three days away, this represents the final mediation attempt in effect.

President Lee also alluded to the importance of not emphasizing only one side’s rights. He said, "Just as there is shadow where there is light, and as high as the mountain, so deep is the valley. Too much is as bad as too little, and extremity turns into its opposite." This means that excess is as bad as deficiency, and things taken to extremes will reverse.

He concluded by saying, "Being stronger does not mean having more or being happier. A new future for Korea is a world where everyone prospers together through solidarity and shared responsibility."

Samsung Electronics Chairman Lee Jae-yong, who returned home after an overseas business trip, is reading a statement at the Seoul Gimpo Business Aviation Center (SGBAC) on the 16th. Photo by Yonhap News.

Previously, as concerns about a general strike mounted, Samsung Electronics Chairman Jay Y. Lee returned urgently from a business trip to Japan on May 16 and issued a public apology, bowing his head. He emphasized, "To all union members and the Samsung family, we are one body, one family. Now is the time to pool our wisdom and move forward together in the same direction." Management also showed willingness to renew its approach by replacing its chief negotiator from Kim Hyung-ro, Executive Vice President of the Device Solutions (DS) Division, to Yeo Myung-goo, Head of the People Team (Executive Vice President) for the DS Division, in response to union demands.

The government also raised the pressure by officially mentioning, for the first time, the possibility of invoking emergency adjustment powers. Prime Minister Kim Min-seok, in a public address the previous day, said, "We will consider all possible measures, including emergency adjustment. The negotiations on the 18th represent, in effect, the last chance to avert a strike." Minister of Employment and Labor Kim Young-hoon also took steps to mediate by meeting directly with both labor and management on May 15 and 16. In response, Choi Seung-ho, chairman of the Samsung Group Super-Enterprise Union, pledged to participate diligently in the post-mediation process to facilitate labor-management harmony, leading to a dramatic last-minute negotiation before the strike.

Before the meeting, Chairman Choi told reporters, "We will also participate sincerely in this second post-mediation." The management entered the meeting room without making any particular statement.

Industry observers believe that the success or failure of these negotiations hinges on how the two sides compromise on the institutionalization of performance bonuses. Key issues include the conditions for payment, the size of the bonus pool, and the ratios for allocation among business units. On the previous day, management held a private meeting with the union before the mediation at the Central Labor Relations Commission to propose a new plan. According to industry sources, management suggested retaining the current OPI (Over-Performance Incentive) system, but allowing a choice between 10% of operating profit and 20% of EVA (Economic Value Added). In addition, if the operating profit of the Device Solutions (DS) Division, which is responsible for semiconductors, exceeds 200 trillion won, management proposed allocating an additional 9-10% of operating profit to the entire division, with a 6:4 split between the entire division (including the memory business unit) and the memory business unit itself, and sought the union’s opinion.

This is interpreted as an attempt at practical compromise by reducing the overall operating profit pool compared to the previous mediation proposal, while increasing the share for the core memory business unit. The previous mediation plan by the Central Labor Relations Commission allocated, in addition to the OPI, a separate 12% of operating profit (7% to the division overall and 3% to the business unit) if the DS Division achieved top sales and operating profit.

However, the union has taken the position that the plan shared the previous day is a step backward compared to the earlier mediation proposal and is unacceptable. The union stated it would not agree unless a more advanced proposal is presented during the post-mediation session on this day.

There is also analysis that management may present a proposal more favorable than the previous day’s during the Central Labor Relations Commission session. An industry official said, "In the closed-door meeting yesterday, with a new chief negotiator for management in place, management likely sounded out how much the union could concede and sought a baseline for negotiations. Ultimately, the key is what kind of mediation proposal the commission puts forth at today’s session and whether both sides accept it."

If even this final mediation by the commission breaks down, the government is highly likely to invoke emergency adjustment powers as previously announced to forcibly halt the strike. If emergency adjustment is implemented, all industrial actions will be suspended for 30 days, and the commission will initiate mediation proceedings ex officio.

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