Samsung Labor-Management 'Performance Bonus Talks' Fail in Third Mediation... Union: "General Strike to Proceed as Scheduled Tomorrow"

Third Post-Adjustment Mediation Between Samsung Management and Labor Ends
Union: "Union Agreed, Management Refused"
Company: "Compensation for Loss-Making Divisions Is Excessive Demand"

Samsung Electronics labor and management held their final negotiations on the 20th, one day before the scheduled general strike, but failed to reach an agreement. The labor union stated that management had rejected the mediation proposal presented by the Central Labor Commission and announced that they would proceed with the general strike on the 21st. On the other hand, management claimed that the union had made excessive compensation demands, such as granting large-scale performance bonuses to the foundry (semiconductor contract manufacturing) and System LSI business units—which have been posting multi-trillion-won losses every year—and therefore could not accept the mediation proposal.

On this day, labor and management held the third post-mediation meeting at the Central Labor Commission in the Government Sejong Complex in the morning, engaging in three days of marathon negotiations, but failed to reach an agreement and the mediation ended. Choi Seungho, Chairman of the Samsung Electronics Branch of the Samsung Group supra-enterprise labor union, stated in a press release, "At around 10 p.m. on the 19th, the union agreed to the mediation proposal presented by the Central Labor Commission, but the management expressed their refusal," and added, "At 11 a.m. on the 20th, management only repeated that 'a decision has been made' and ultimately did not clarify their position." He explained that although the union accepted the final mediation proposal presented by the Central Labor Commission during the second post-mediation meeting the previous day, the agreement fell through because management did not agree.

Management, in its own statement, explained, "Even though the company accepted most of the scale and content of the performance bonuses, the union did not withdraw its demand for compensation of a scale that would be difficult to accept socially, even for deficit business units," and added, "This directly violates the basic management principle that 'rewards are given where there are results,' which is why we could not accept the mediation proposal." Management also emphasized, "We determined that if we abandon this principle, it could have a negative impact not only on our company but also on other businesses and industries."

Choi Seungho, Chairman of the Samsung Electronics Branch of the Samsung Group supra-enterprise labor union, after concluding the third post-adjustment meeting held on the 20th at the Central Labor Commission in the Government Sejong Complex, one day before the announced general strike date, explained the breakdown process of the labor-management negotiations and expressed his intention to proceed with the general strike while greeting. Photo by Yonhap News.

According to industry sources, both labor and management continued to clash over the issue of compensation for deficit business units until the very end. While the Device Solutions (DS) division in charge of memory recorded large profits overall, the problem was with the non-memory business units such as System LSI and foundry (semiconductor contract manufacturing), which posted multi-trillion-won losses. The union proposed that 15% of this year's operating profit be divided, with 70% allocated to the DS division and 30% to the memory business unit. During the post-mediation process, there were reports that the allocation ratio was adjusted to 60% for the DS division and 40% for memory, but the union was said to have requested an increase in the share of operating profits, thereby increasing the portion allocated to these units.

The union plans to proceed with the strike as previously announced on the 21st. Chairman Choi stated, "The labor union will legally begin the general strike as scheduled tomorrow," and emphasized, "Even during the strike period, we will make it clear that we will not stop our efforts to reach a settlement."

Meanwhile, management stated that they would not rule out the possibility of further mediation until just before the strike. Samsung Electronics said, "There must not be a strike under any circumstances," and added, "The company will continue making every effort to resolve the issue until the very end, either through additional mediation or direct dialogue with the union."

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