Samsung Electronics post-mediation ends in deadlock; union says it will proceed with a lawful strike

[The Financial News] Samsung Electronics' post-mediation process between labor and management, which had continued for three days, has ended in a final deadlock. On the last day of the process, the National Labor Relations Commission proposed an alternative after a 17-hour marathon negotiation on the 12th, but the talks collapsed when the union refused to accept it. The Samsung Electronics union says it will go ahead with the general strike scheduled for the 21st. A voluntary agreement between labor and management before the strike now appears highly unlikely.
Samsung Electronics and its labor union held a second post-mediation session for 17 hours, from 10 a.m. on the 12th until around 3 a.m. on the 13th, but the process ultimately failed.
After the mediation meeting, the Central Labor Commission explained, "The gap between the two sides' positions is wide, and the union requested that post-mediation be suspended, so we decided not to present a mediation proposal and to end this round of post-mediation." It added, "If both sides agree and request additional post-mediation, we can support it at any time."
After the meeting, Choi Seung-ho, chairman of the Samsung Electronics branch of the umbrella union, told reporters, "I think the proposal was a step back from what we had asked for." He added, "The post-mediation has ended in a final deadlock."
He said the Central Labor Commission had offered several alternatives to help reach a settlement, but the talks collapsed after the union refused to agree and declared an end to the dialogue.
Choi said none of the union's original demands — a performance bonus linked to 15% of operating profit, the removal of the bonus cap, and the institutionalization of the bonus system — were reflected in the proposal.
"It kept the EVA-based OPI system in place instead of making performance bonuses more transparent, and the 50% cap remained as well. The cap was not removed," Choi said. "They also said an OPI stock compensation plan was not possible." According to Choi, management appears to have proposed an OPI tied to 12% of operating profit as a special management performance bonus for the DS Division. It also appears to have included a condition that Samsung Electronics must rank first in Korea in sales and operating profit this year.
"None of our demands have changed," Choi said. "It is hard to accept the idea that bonuses should be paid based on external factors such as competitors like SK hynix." He added, "We have no intention of engaging in illegal labor action. We will proceed with lawful and legitimate industrial action." He also said, "Since we are following the proper legal procedures for industrial action, I do not think there will be any problem. If the company brings a proper proposal, we are willing to listen."
On criticism from some quarters that the union is raising issues such as shareholder returns, Choi dismissed the concerns, saying, "We are shareholders too." He added, "We have no intention of fighting with shareholders."
"If our demands are properly reflected, we could receive payment in treasury shares through the OPI stock compensation system," Choi said. "Then I think we could also discuss shareholder returns together with shareholders."
With the post-mediation ending in deadlock, some are also raising the possibility that the government could invoke emergency arbitration. Under this system, the Minister of Employment and Labor can intervene if a labor dispute is likely to have a significant impact on the national economy. If invoked, the strike must stop immediately and mediation procedures resume for a set period. Labor groups, however, oppose the measure, saying it could restrict the right to collective action.
When asked whether the union would pursue a voluntary agreement before the scheduled general strike, Choi replied, "Not at this point."
jhyuk@fnnews.com Kim Jun-hyeok Reporter