A Strike May Loom for Samsung as South Korean Government's Wage Arbitration Failed

Image Source: Visual China

BEIJING, February 14 (TMTPOST) — South Korea’s Labor Relations Commission had decided on Monday to end arbitration talks between Samsung Electronics’ management team and the company’s labor union members.

Samsung Electronics might face employee strikes for the first time since its establishment in 1969.

The Labor Relations Commission had organized two arbitrations in one week but failed to produce any substantial result. The two parties could not reach an agreement on a wage plan.

The possibility of a strike will then be decided by a vote at the labor unions.

Samsung Group’s chairman Lee Jae-yong abolished the company’s “no labor union” policy in May 2020.

Samsung Electronics’ four labor union groups had formed a collective negotiation group, which has been having negotiation talks with the company’s management since October last year. They ask the company to raise each employee’s annual salary by 10 million Korean won (around US$8,354) and disclose a bonus incentive policy. Samsung Electronics’ management team did not satisfy the demands.

The negotiation between Samsung Electronics and its labor unions started in October last year. Besides demanding a salary raise for every employee, the labor unions also want the company to distribute 25% of its income to the staff as a bonus.

The labor unions’ demands target the entire staff at Samsung Electronics. The company currently has a workforce of around 114,000.

"The top management of Samsung Electronics Co. should now come forward to directly talk with the union (to solve the wage issue)," the labor group said in a press release.

The company said it will "sincerely talk to the union."

The biggest union among the four labor unions is said to have approximately 4,500 members, about 4% of the company"s workforce of 114,000.

Samsung China’s spokesperson told Beijing-based securities newspaper Securities Daily that the tension between Samsung Electronics and its labor unions will not impact Samsung’s business operation in China.

Samsung Electronics’ semiconductor business surpassed Intel in 2021, becoming the top semiconductor maker in the world. If its employees decide to strike, the global chip supply chain will suffer greatly at a time when chip supply is already in short.

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