Samsung Electronics (005930.KS) and its union will sit down again 45 days after negotiations broke down. As the threat of a full-scale strike intensified, the union accepted the government's active mediation, reviving the prospect of a dramatic compromise.
According to the Samsung Electronics chapter of the Samsung Group Cross-Company Union, the union accepted a recommendation from the Ministry of Employment and Labor and will conduct post-dispute arbitration with management for two days from May 11 to May 12 at the National Labor Relations Commission in the Sejong Government Complex, the union said Thursday. It marks the first dialogue arranged in the 45 days since negotiations broke down on March 27 this year.
Unusually, this post-dispute arbitration will proceed as a "sole arbitrator procedure" overseen by one member jointly recommended by labor and management. "The arbitrator for this urgently arranged session is someone who understands the labor-management situation well and is trusted by both sides," an official at the National Labor Relations Commission said. The Ministry of Employment and Labor plans to provide indirect support for the resumption of negotiations.
Post-dispute arbitration has no limit on the number of meetings and no legal binding force. Entering post-dispute arbitration is typically interpreted as a sign that both sides are willing to make concessions on their respective demands, but some observers suggest it may be the union's way of "building justification" ahead of a strike. Management said of the resumption of negotiations, "We will engage in the consultations in good faith."
The core issue in the negotiations is performance-based pay. Management has retreated from its position of maintaining the existing cap of 50% of annual salary and presented a more progressive proposal. Under the proposal, if the company achieves the top position in Korea, more than 10% of operating profit would be used as a source for performance-based pay, and the memory business division would be guaranteed treatment exceeding that of SK hynix. The union, on the other hand, is holding firm on completely abolishing the performance-based pay cap and using 15% of operating profit as the funding source.
The calculations within the Samsung Electronics union surrounding performance-based pay are also complex. Because performance-based pay inevitably concentrates in the Device Solutions (DS) division, which generated more than 90% of total operating profit in the first quarter this year, the Device eXperience (DX) division is pushing back, citing its own dedication during the period when DS recorded losses in the past.
If the arbitration fails, the union plans to launch a full-scale strike on May 21 as previously announced. The second hearing on management's injunction request to ban industrial action, scheduled for May 13, is expected to be the first watershed for whether the strike goes ahead. The Suwon District Court panel handling the case plans to issue the injunction ruling before the strike begins.
Meanwhile, Samsung Biologics recently filed a criminal complaint with the Yeonsu Police Station in Incheon against six union members, including coexistence chapter leader Park Jae-sung, on charges including obstruction of business, after they pushed ahead with a strike in some processes where the court had banned industrial action.
