Seoul: Samsung Electronics Co. and its largest labor union resumed government-led wage mediation talks on Monday in an attempt to avert a looming strike at the world's largest memory chipmaker. However, the discussions concluded without an agreement, and the threat of industrial action remains.

According to Yonhap News Agency, these talks came shortly after the initial round of government-mediated negotiations ended without a resolution due to disagreements over performance-based bonuses. The union has scheduled an 18-day strike to commence on Thursday if no compromise is reached. After lengthy discussions at the National Labor Relations Commission office in Sejong, representatives from Samsung's management, the labor union, and government officials agreed to reconvene on Tuesday to continue negotiations.

Choi Seung-ho, head of Samsung Electronics' largest labor union, expressed the union's commitment to the talks, stating, "We are participating in the negotiations in good faith," as he confirmed his intention to attend the next round of talks. Meanwhile, committee chairman Park Soo-keun indicated that the government might propose a mediation solution on Tuesday. The core issue remains the division over bonuses linked to the company's AI-related semiconductor business.

Samsung's management has suggested maintaining the current excess profit incentive system, with the option to calculate the bonus pool based on either 10 percent of operating profit or economic value added (EVA). They also proposed a special compensation system to introduce a more adaptable incentive structure. However, the union is demanding fixed performance bonuses amounting to 15 percent of the semiconductor division's operating profit and the elimination of payout caps.

In an additional development on Monday, a district court partially approved Samsung Electronics' injunction request to prevent the planned strike, mandating that the union ensures any industrial action does not disrupt production. The Suwon District Court emphasized the need for staffing to protect safety-related and other facilities, as well as maintaining normal levels of product output. The court's decision also restricted the union from taking control of company facilities or blocking workers from accessing them, aligning with many of the company's requests.

Despite the court ruling, the union has stated its respect for the decision but confirmed its intention to proceed with the strike as scheduled. Industry analysts warn that a strike could inflict significant damage on the South Korean economy, with potential losses projected to reach as high as 100 trillion won (US$66.7 billion), given the country's heavy reliance on semiconductor exports.

Amid these tensions, government officials have expressed concern over the potential strike, suggesting that Seoul might invoke emergency arbitration powers to avert it, a move that has drawn criticism from labor groups. Under South Korean law, the labor minister can issue an emergency arbitration order if a dispute is likely to harm the national economy or seriously disrupt everyday life. Such an order would halt industrial action for 30 days while mediation and arbitration take place.

Earlier, President Lee Jae Myung emphasized the importance of balancing labor and management rights, stating, "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," in a post on his X account.