Labor-management conflicts over performance-based compensation systems are surfacing in the IT industry. With Kakao entering mediation procedures after failing to reach a wage agreement, tensions over a possible strike are rising. There are concerns that, depending on the outcome at Kakao, further labor disputes could occur in the IT sector in the future.

According to industry sources on the 18th, labor and management at Kakao headquarters will undergo mediation procedures at the Gyeonggi Regional Labor Relations Commission starting at 4:30 p.m. that day. A Kakao representative stated, "We will faithfully participate in the Labor Relations Commission's mediation process, always keep communication channels open with the union, and do our utmost to reach an amicable agreement."

The Kakao Branch (Crew Union) of the National Chemical, Textile, and Food Industry Workers' Union filed a mediation application with the Gyeonggi Regional Labor Relations Commission on the 7th, involving unions from five legal entities: Kakao, Kakao Pay, Kakao Enterprise, DK Techin, and XL Games, amid ongoing disputes over the performance-based compensation system.

The National Chemical Fiber Food Industry Labor Union Kakao Branch (Crew Union) held a rally last March in front of Kakao Pangyo Ajit in Seongnam, Gyeonggi Province, opposing the spin-off of Content CIC (an in-house independent company) that operates the portal service 'Daum'. Photo by Yonhap News Agency

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If labor and management at Kakao headquarters fail to reach an agreement, the Kakao union may go on strike for the first time since its establishment. The two sides have yet to narrow their differences over the structure of the compensation program, including bonuses.

The union pointed to the unbalanced performance distribution structure and the company's unilateral decision-making process as causes of the conflict. The union also cited issues such as excessive working hours, inadequate response to allegations of workplace harassment, and forced consent to forensics for employees. In particular, the union refuted the view that the breakdown in negotiations was due to their demand for bonuses equivalent to 13–15% of operating profit. The union emphasized that the operating profit-linked bonus system was merely one of several options discussed during negotiations, and that the core issue was not the size of the bonus itself, but rather the need to improve the overall compensation system—including transparency of compensation standards, the structure of performance distribution, and long-term service rewards.

The union stated that if mediation is suspended due to failure to reach an agreement, it will decide on a strike through internal procedures such as a vote among union members. Kakao Enterprise and Kakao Pay have already secured the right to strike by suspending their respective mediation procedures on the 14th and 15th.

Kakao Pangyo Agit in Seongnam, Gyeonggi Province. Photo by Kang Jinhyung

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Meanwhile, Naver, another major platform company, concluded its wage negotiations without significant conflict. Naver management and the Naver branch of the National Chemical, Textile, and Food Industry Workers' Union (Naver Union) reached a tentative agreement on May 11 to raise this year's wages by 5.3%, after about three weeks of intensive negotiations.

The gaming industry has also been relatively quiet this year. Nexon reached an agreement with its labor union in March to raise base salaries by 6%, and NC concluded a wage agreement on the 13th to increase the average annual salary by 3 million won. However, since Neople—a Nexon subsidiary and developer of the game 'Dungeon & Fighter'—launched the industry's first general strike last year, there are concerns that labor disputes could erupt at some companies in the future.