Samsung Electronics Labor and Management Hold Final Post-Adjustment Talks Today... Critical Juncture Between Dramatic Agreement and General Strike

Final Round of Negotiations Before the General Strike on the 21st

First Day of Post-Adjustment Ended Without Agreement

Attention on Central Labor Commission's Proposal... Hopes for a Dramatic Settlement

On May 12, Samsung Electronics labor and management will enter into final negotiations over the performance bonus dispute under government mediation.

On this day, beginning at 10:00 a.m., the labor and management of Samsung Electronics will hold the second post-adjustment meeting at the Central Labor Commission (CLC) located at the Government Sejong Complex. The previous day, the two sides held the first post-adjustment meeting at the same location from 10:00 a.m. to 9:30 p.m., totaling 11 hours and 30 minutes, but failed to reach an agreement.

The labor union is demanding the abolition of the performance bonus ceiling and the formalization of a plan to allocate 15% of operating profit as the source of the performance bonus. The management maintains that institutionalization should be discussed later after fully listening to the opinions of both union members and employees. Instead, the management proposed to provide compensation higher than competitors through special bonuses if Samsung Electronics achieves the top performance in the domestic industry.

Choi Seungho, Chair of the Samsung Electronics Branch of the Super Enterprise Labor Union, told reporters before the first post-adjustment meeting the previous day, "We continue to call for the payment of a performance bonus equal to 15% of operating profit, the abolition of the ceiling, and institutionalization," adding, "If the company has no position on institutionalization, I do not think adjustment will be possible."

Post-adjustment is a form of mediation conducted again with the consent of labor and management to resolve labor disputes after the initial mediation has ended, with the CLC leading the negotiations. It is known that the CLC will present a mediation proposal at the second meeting today.

If labor and management accept and agree to the mediation proposal derived through post-adjustment, Samsung Electronics will be able to avoid the second strike in its history. The union has stated that if no agreement is reached, it will go ahead with a general strike scheduled for the 21st. If the general strike materializes, the expected damages are estimated to reach approximately 30 trillion won. Global investment bank JP Morgan recently analyzed in a report that this strike could cause Samsung Electronics' annual operating profit to decline by more than 40 trillion won.

The warning of a general strike by the Samsung Electronics labor union has raised concerns from various sectors. Deputy Prime Minister and Minister of Strategy and Finance Koo Yoon-chul said at a press briefing on the 11th, "I understand that labor and management at Samsung Electronics are working to reach an agreement centered on the CLC," adding, "I hope that the two sides will reach an amicable settlement."

Deputy Prime Minister Koo emphasized, "At this crucial time, when the world is coming to Korea to secure semiconductor chips, it would be unfortunate for labor-management discord to cause us to miss this opportunity," adding, "It is even more important to seize such opportunities and contribute to our economy when Samsung Electronics' semiconductor business is thriving. I once again urge both sides to make wise decisions."

Kim Younghoon, Minister of Employment and Labor, also welcomed the initiation of post-adjustment by the CLC with the consent of Samsung Electronics labor and management in his keynote speech at the policy review meeting and emergency employment and labor situation review meeting held at the Government Sejong Complex on the same day. He stated, "Just as Samsung Electronics has become a world-class company through technology, labor and management must set a new example in labor-management relations." He added, "I hope that both labor and management will approach the mediation with a sense of social responsibility, befitting Samsung Electronics' slogan, 'One More Family, Samsung.'"

Minister Kim also said, "I hope that, through this situation, our labor-management relations can go beyond the pursuit of individual interests and build a mutually beneficial relationship. I expect this will spark an active social discussion on desirable profit sharing and distribution by companies, and the government will also provide support."