Lee Warns "Do Not Cross the Line" as Minister Steps In... Behind the Scenes of Defusing the Samsung Strike Crisis

Lee: "Even investors couldn't accept this... It's incomprehensible"

Minister Kim Younghoon steps in, persuades both sides to negotiate autonomously

Labor and management each make concessions, reaching a dramatic agreement

The dramatic breakthrough that averted an unprecedented all-out strike at Samsung Electronics just one day before it was set to begin was decisively enabled by the intense mediation of the Minister of Employment and Labor and the Central Labor Relations Commission (CLRC). After a period of sharp confrontation, both management and labor ultimately made concessions following government intervention, thereby defusing the crisis of what would have been the company's largest-ever strike.

On the 20th at the Gyeonggi Employment and Labor Office in Jangan-gu, Suwon-si, Gyeonggi Province, after concluding the Samsung Electronics wage negotiation, Yeomyeonggu, Head of the People Team at Samsung Electronics DS (Device Solution - Semiconductor Business), and Choi Seungho, Chairman of the Samsung Electronics Branch of the Samsung Group Supra-Enterprise Labor Union, signed the tentative agreement and took a commemorative photo with Kim Younghun, Minister of Employment and Labor. Photo by Yonhap News Agency

The second post-mediation session of the CLRC, held on May 18—three days before the union's planned strike—was contentious from the outset. Management and the union began negotiations at the CLRC conference room in Sejong City, but failed to close the gap on the size of the performance bonus pool and the criteria for its distribution among business divisions, resulting in no agreement on the first day. On May 19, the parties engaged in a marathon negotiation that lasted a full 14 hours and 30 minutes, but by 12:30 a.m. on May 20, the session was adjourned without a deal.

On the same day, at 10:00 a.m., labor and management returned to the negotiating table, but after just an hour and a half, by 11:30 a.m., the talks broke down completely. The CLRC presented a mediation proposal after three days of deliberations; the union accepted the terms, but management refused to sign, resulting in a complete breakdown in negotiations.

Management at the time refused to sign, stating that the union's demand—to allocate performance bonuses with a 70% common distribution and 30% differentiated by division, even to loss-making units—would undermine Samsung's performance-based HR principles. The union, on the other hand, argued that it was necessary to address the sense of deprivation among employees in deficit business units. With official mediation by the CLRC having failed, an all-out strike on May 21 appeared inevitable.

Despite the collapse of mediation, the mediators did not give up. CLRC Chairman Park Sukeun stated immediately after the breakdown, "Although this round of mediation did not lead to a final agreement, if labor and management come together and request it, we are ready to resume mediation at any time to support negotiations," leaving the door open to further talks.

President Lee Jae-myung is speaking at the Cabinet Meeting and Emergency Economic Inspection Meeting held at the Blue House on the 20th. Photo by Yonhap News Agency

Amid these developments, President Lee Jaemyung's remarks further accelerated the government's mediation efforts. At a cabinet meeting that day, President Lee criticized the union, stating, "It is incomprehensible to institutionalize a system in which a certain percentage of operating profit is divided before taxes—which are the shared assets of the people—are even deducted. Even investors cannot do this." He added, "Ultimately, the government bears final responsibility for all mediation. If the parties cross the line, we must fulfill our responsibilities to the community."

Subsequently, Minister of Employment and Labor Kim Younghoon took up direct mediation. Moving away from the mediation proposal approach of the CLRC, labor and management entered into "autonomous negotiations" based on trust in Minister Kim.

Minister Kim persistently persuaded both sides and, on the afternoon of May 20, arranged a final negotiating table at the Gyeonggi Employment and Labor Office in Suwon, Gyeonggi Province. That afternoon, he posted on X (formerly Twitter), calling for a settlement with phrases such as, "No achievement without obsession," and "Hope is a flower that blooms in despair. It's not over until it's over." He also used hashtags like "#ResponsibilityWithinLimitsAndTheSamsungWay" and "#NegotiationIsHarderThanStriking" to encourage a decision from both sides.

At the final table arranged by Minister Kim, both management and labor each took a step back. The union maintained its original demand that 70% of the performance bonus be distributed upfront to all, including loss-making business units within the Device Solutions (DS) division, but agreed with management to defer implementation of the allocation method for deficit business units by one year.

Management maintained that excessive common distribution would undermine its performance-based HR principles, but largely accepted the union's demand for institutionalization by agreeing to formalize a special compensation scheme with no upper limit, to be applied for the next 10 years.

Immediately after the signing of the tentative agreement, Minister Kim stated, "On behalf of the government, I deeply appreciate that both sides did not let go of the thread of dialogue until the end and reached a tentative agreement through autonomous negotiations. This has demonstrated 'K-resilience' by resolving an unprecedented conflict through dialogue."

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