Samsung Electronics labor-management post-mediation ends in final breakdown... strike threatening 40 trillion won in losses now imminent (combined)

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[The Financial News] Samsung Electronics and its labor union have failed to narrow their differences over performance bonuses despite two government-backed mediation attempts, bringing negotiations to a final collapse. As the union is expected to go ahead with a general strike scheduled for the 21st, speculation is also growing that the South Korean government may invoke emergency mediation powers as a last resort.
After the meeting ended in the early hours of the 13th, Choi Seung-ho, chairman of the Samsung Electronics Branch of the Samsung Group Enterprise Labor Union, told reporters that the labor and management sides had failed to bridge their differences. He said they had requested a mediation proposal and waited, but the proposal was actually a step backward, adding that the post-mediation process had been declared a final breakdown. Samsung Electronics and the union had held a second round of post-mediation talks at the National Labor Relations Commission in Government Complex Sejong starting on the 12th for a 2026 wage agreement, but even after 17 hours of discussions from 10 a.m. on the 12th until 3 a.m. the next day, they failed to reach an agreement.
The union says the proposal did not eliminate the cap on performance bonuses and did not establish a transparent system. Choi said the proposal would keep the existing operating profit incentive (OPI) system in place rather than making performance bonuses more transparent, and that the 50% cap on bonuses for both the semiconductor (DS) and finished products (DX) divisions would remain unchanged. He added that the union had demanded the removal of the bonus cap as well as greater transparency and institutionalization, but those demands were not accepted. He also noted that the special management performance bonus for the DS Division would only apply if Samsung Electronics' payout exceeded that of SK hynix.
Asked whether the union would continue participating in the extended post-mediation process at the Central Labor Commission, he said, "It ended today." On the possibility of autonomous negotiations with management, he said, "We are not considering that," but added, "If the company brings a proper proposal, we are willing to listen."
Going forward, the union plans to focus on responding to the injunction request filed by management seeking to ban illegal industrial action. The court is expected to decide between the 13th and the 20th, just before the general strike, whether to grant Samsung Electronics' request for an injunction against illegal industrial action filed against the union. Choi said 41,000 union members have expressed their intention to join the general strike scheduled for the 21st. He stressed, "We have no intention of engaging in illegal industrial action. We will proceed lawfully and legitimately," adding, "Because we are following the proper legal procedures for industrial action, we do not expect any problems. If the company brings a proper proposal, we are willing to listen."
Meanwhile, Samsung Electronics and its union had failed to reach an agreement during mediation by the Central Labor Commission in February and March, leading to a suspension of mediation. They resumed negotiations through a post-mediation process over two days starting on the 11th, but again failed to find common ground. After the mediation meeting, the Central Labor Commission said, "The gap between the two sides' positions is wide, and the union requested that post-mediation be halted, so we decided not to present a proposal and to end this round of post-mediation. If both sides agree and request additional post-mediation, we can support it at any time."
On concerns raised by some over issues such as shareholder returns, Choi dismissed them, saying, "We are shareholders too," and added, "We have no intention of fighting with shareholders like this."
If the general strike becomes a reality, estimated losses could exceed 40 trillion won due to factory shutdowns and other disruptions. Some observers say the government may invoke emergency mediation powers to prevent such a scenario. Emergency mediation is a system that the Minister of Employment and Labor can activate when a labor dispute is likely to have a significant impact on the national economy. Once invoked, industrial action is immediately suspended and mediation procedures resume for a set period. The labor community, however, has protested, saying the measure could restrict the right to collective action. A Central Labor Commission official, meanwhile, drew a line, saying, "That is not something we are reviewing."
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soup@fnnews.com Im Su-bin Reporter