SEOUL — Samsung Electronics’ largest union said Wednesday it will proceed with a planned strike later this week after management rejected a government-mediated proposal in talks over performance-based bonuses.
“We accepted the mediator’s proposal,” the union said, adding that it would move forward with the legally scheduled general strike, according to Yonhap News Agency.
The two sides have been holding government-mediated negotiations over bonuses, with nearly 48,000 workers expected to walk off the job for 18 days.
Samsung management expressed “deep regret” over the union’s decision and urged workers to continue negotiations.
“Despite the company largely incorporating the union’s demands, it continues to insist on an unreasonably large compensation package even for loss-making business units,” Samsung said in a statement.
Labor and management have been deadlocked since late last year over performance-based bonuses tied to earnings from Samsung’s artificial intelligence-related semiconductor business, as the global memory chip market experiences a strong upcycle.
The company has proposed keeping its current excess profit incentive system while calculating the bonus pool based on 10% of operating profit. Samsung has also proposed introducing a special compensation system, saying it would create a more flexible incentive structure.
The union is seeking fixed performance bonuses equal to 15% of the semiconductor division’s operating profit, along with the removal of payout caps.
During government-mediated talks, the two sides reached an understanding on eliminating bonus caps set at 50% of annual salary, according to an industry source. However, they remained divided over how bonuses should be distributed across loss-making business units and whether any agreement should be formally institutionalized.
The potential strike has raised concerns within the South Korean government because a prolonged work stoppage could affect the country’s export-driven economy. Semiconductor exports account for about 35% of South Korea’s total outbound shipments.
Global companies that rely on South Korea’s semiconductor supply chain have also raised concerns about possible disruptions. (Source: IANS)
