Kakao Faces First-Ever Strike as Labor-Management Negotiations Break Down
Breakdown in Collective Bargaining...
Union Files for Mediation with Labor Relations Commission
Possibility of Strike if Mediation Fails
Union: "We Never Demanded Performance Bonuses as a Fixed Percentage of Operating Profit"
Kakao is facing the possibility of its first-ever strike since its founding.
According to the IT industry on May 11, the Kakao branch of the Korean Federation of Chemical, Textile, Food Industry Workers' Unions (Crew Union) submitted an application for mediation to the Gyeonggi Regional Labor Relations Commission on May 7, involving unions from four legal entities: Kakao, Kakao Pay, Kakao Enterprise, and DK Techin. The unions have thereby initiated the procedure to secure the right to take industrial action. If the mediation committee decides to suspend mediation due to a failure to reach an agreement between labor and management, the union may conduct an internal vote among its members to decide on whether to go on strike. However, the Kakao union stated, "No plans have been finalized regarding actions after the mediation process." Kakao, for its part, has announced its intention to continue communicating and coordinating positions with the union even if the labor commission's mediation process begins.
If labor and management fail to reach an agreement, the Kakao union may go on strike for the first time since its establishment. Currently, the two sides are unable to narrow their differences regarding the structure of compensation programs, including performance-based bonuses. The union is demanding that Kakao pay out performance bonuses equivalent to 13–15% of last year's operating profit this year.
A union representative explained, "We specified the rates for wage increases and performance bonuses in our demands to management," adding, "We did not ask for a set percentage of operating profit as performance bonuses. Kakao Enterprise and DK Techin posted losses last year and therefore have no operating profit."
According to the IT industry, SK hynix's case influenced the Kakao union's demand for performance-based bonuses. In 2021, SK hynix introduced a profit-sharing (PS) system, allocating 10% of its operating profit as the fund for this system through a labor-management agreement.
A Kakao representative stated, "We have sincerely negotiated with the union regarding this year’s wage talks, but were unable to reach a final agreement on the compensation structure, which led to the mediation process. We will faithfully participate in the upcoming labor commission mediation procedures and will keep communication channels open with the union, making every effort to reach an amicable agreement."
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In 2024, the Kakao union also applied for its first mediation at the regional labor commission after collective bargaining negotiations broke down. However, after reaching a provisional agreement on wages and collective bargaining, which included reinstating work-from-home once a week, an actual strike was averted. In June last year, union members at Kakao Mobility staged a partial strike for about two hours following the breakdown of wage and collective bargaining negotiations.
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