Sejong: Samsung Electronics Co. and its largest labor union resumed government-led wage mediation talks Monday, striving to avert a strike at the world's most significant memory chipmaker. However, the discussions concluded without an agreement on the first day of mediation.
According to Yonhap News Agency, the talks resumed shortly after the initial round of government-mediated negotiations failed to produce a deal due to disagreements over performance-based bonuses. This comes in anticipation of an 18-day strike scheduled to start on Thursday. The discussions at the National Labor Relations Commission office in Sejong ended at approximately 6:20 p.m., with representatives from management, the labor union, and the government agreeing to reconvene on Tuesday.
Choi Seung-ho, head of Samsung Electronics' largest labor union, expressed the union's commitment to the negotiations, stating, "We are participating in the negotiations in good faith," and confirmed his attendance for Tuesday's talks. Committee chairman Park Soo-keun indicated the possibility of a government mediation proposal on Tuesday, as labor and management remain at odds over performance-based bonuses linked to the company's earnings from its AI-related semiconductor business during the memory supercycle.
Management suggested maintaining the existing excess profit incentive system while recalculating the bonus pool based on either 10 percent of operating profit or economic value added (EVA). A special compensation system was also proposed to create a more flexible incentive structure. Conversely, the union demands fixed performance bonuses equal to 15 percent of the semiconductor division's operating profit and the elimination of payout caps.
Later on Monday, a district court partially granted Samsung Electronics' request for an injunction to prevent the strike, ordering the union to ensure any industrial action does not disrupt production. The Suwon District Court mandated maintaining usual staffing levels to prevent potential damage to safety-related facilities and products. It also restricted the union from taking over company facilities or obstructing worker access, in a decision that largely sided with the company's requests.
Despite the court's ruling, the largest union stated it respects the decision but affirmed that the strike will proceed as planned. Industry observers warn that a walkout could lead to losses of up to 100 trillion won (US$66.7 billion) for the South Korean economy, given its heavy dependence on semiconductor exports.
Government officials have expressed concern over the potential strike, with suggestions that Seoul might use emergency arbitration powers to prevent it. This possibility has faced criticism from labor groups. South Korean law allows the labor minister to issue an emergency arbitration order if a dispute is likely to harm the national economy or significantly disrupt ordinary people's lives, suspending industrial action for 30 days while mediation and arbitration take place.
Earlier in the day, President Lee Jae Myung emphasized the importance of respecting both labor and management rights. "In South Korea, which has adopted the basic orders of democracy and free market economy, labor should be respected as much as companies, and corporate management rights should also be respected as much as labor rights," Lee posted on his X account.