- by Bedulo Nongjang
- The Guardian
- Issue #2192
Photo: rawpixel.com (CC0)
The Samsung Electronics’ Union has demanded that the company abolish a cap on bonuses. Bonuses are capped at 50 per cent of annual salary. The union wants the company to instead allocate 15 per cent of the company’s annual operating profit to bonuses.
Smaller companies such as SK Hynix, a Samsung rival, pays their workers higher bonuses.
Samsung Electronics has defended its pay scheme.
In a media statement, it said the union had made “unacceptable demands” which included the size of bonuses for loss-making units.
The two sides held talks mediated by the government but were unable to reach a consensus.
Union leader Choi Seung-ho said the union had accepted a final proposal presented by a government mediator, but the 18-day strike would go ahead as management had not come around on one remaining sticking point, Reuters reported.
“I would like to apologise to the public for not being able to produce a good result despite making as many concessions as possible,” he said.
“We will not cease our efforts to reach a deal even during the strike.”
Samsung Electronics said that “accepting the labour union’s excessive demands would undermine the fundamental principles of company management.”
Worker strikes at Samsung were rare until recently. In June 2024, it faced its first-ever industrial action following months of negotiations over pay, when some workers went on strike for one day and held a protest in Seoul, chanting: “Respect labour! We are not wanting a 6.5 per cent raise or a 200 per cent bonus!”
The company had offered a 5.1 per cent pay rise for the year, but the union was demanding a 5.6 per cent rise, an additional day of annual leave, as well as transparent, performance-based bonuses.
Then, on 8 July 2024, thousands of workers went on strike, initially for three days but eventually going on until 1 August, when it largely petered out. Additional strikes have taken place since then.
The stakes are high. Samsung is the world’s largest producer of memory chips, useful in data centres, phones and computers. The company’s revenues amount to almost 12.5 per cent of South Korean GDP. Kim Min-seok, South Korea’s Prime Minister has said that economic damage from the strike would be “unimaginable.”
At time of writing, a court has granted part of an injunction Samsung sought to block the strike. The government has emergency powers that could delay the strike for 30 days. Before the government could do that, however, companies and unions would have to start talks which collapsed some time ago.
