Samsung Electronics (005930) labor-management renegotiations over performance bonuses — held under mediation by the National Labor Relations Commission — collapsed, and as the union geared up for a general strike on the 21st, the government signaled possible intervention. The argument is that a general strike must be averted given the magnitude of export declines from production disruptions and the ripple effects on regional economies. Some observers speculate that, in a worst-case scenario, the government could invoke its emergency adjustment authority to force a settlement between labor and management.
Prime Minister Kim Min-seok convened an emergency meeting of related ministers on Samsung Electronics' strike on the 13th at his office at the Government Complex in Seoul.
Kim expressed regret over the breakdown of the post-mediation talks and instructed officials to closely manage the situation at the government level, considering the gravity of the ripple effects on the national economy. He emphasized, "Actively support continued dialogue between labor and management so that under no circumstances does this lead to a strike."
Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol also stated regarding the breakdown of the Samsung Electronics labor-management negotiations, "A strike must absolutely not happen." In a post on X (formerly Twitter), Koo said, "The government will support resolution of this issue through principled negotiations to the end, under any circumstances."
He added, "The government deeply regrets that Samsung Electronics' labor-management negotiations failed to reach a settlement despite government post-mediation efforts," and urged, "Comprehensively considering the current business situation and the impact on the national economy, efforts must continue so that both sides reach principled negotiations."
At a press briefing on the 11th, Koo said regarding Samsung Electronics' record-breaking excess profits, "The efforts of Samsung's internal management must have been enormous, but looking more broadly, suppliers may have also contributed, the government's efforts in providing infrastructure such as transmission and distribution investments and power plants played a role, and so did local governments' efforts." He added, "I once again urge (labor and management) to make a wise judgment."
Samsung labor-management talks collapse at NLRC mediation
Management offers "12%" of operating profit, union demands "15%"
General strike set for the 21st of this month
At around 3 a.m. that day, the Supra-Enterprise Union announced that post-mediation negotiations at the NLRC had ended. The meeting, which began at 10 a.m. the previous day, ran for about 17 hours, past 3 a.m.
Choi Seung-ho, chair of the Supra-Enterprise Union's Samsung Electronics chapter, said, "The proposal management put forward 12 hours after we demanded a mediation plan was actually a step backward. They offered a special performance bonus only to the Device Solutions (DS) division, limited to 2026, and did not even institutionalize it."
According to the union, management proposed a performance bonus equivalent to 12% of operating profit only for the DS division. It also attached a condition that the division must achieve the highest operating profit domestically this year.
The union expressed great disappointment that, beyond simple numerical reductions, management insisted on maintaining the Overall Performance Incentive (OPI) system based on the existing Economic Value Added (EVA) methodology. The 50% cap was kept intact, and management refused to apply a stock compensation plan.
Regarding the 18-day general strike scheduled to begin on the 21st, Choi said, "As of today, the number of participants stands at about 41,000. Given management's proposal, we expect more than 50,000 union members to join."
As a result, the Samsung Electronics labor union is effectively preparing to break off negotiations, and the countdown has begun for only the second general strike in the company's history. If semiconductor plants — the nation's largest industry — come to a halt, damage to the national economy in the form of export declines and regional economic slowdowns appears unavoidable.
Deputy Prime Minister Koo's warning that "a strike must not happen" reflects concerns that a general strike would cause roughly 30 trillion won in production losses, customer defections, and supplier damage, inflicting severe harm on the overall economy. Some observers suggest that the judiciary could also put the brakes on the union's general strike. On the 16th of last month, Samsung Electronics filed an injunction with the Suwon District Court seeking to prohibit the union's illegal strike.
The current Trade Union Act prohibits: obstructing the normal operation of safety protection facilities (Article 42, Paragraph 2); stopping work to prevent equipment damage or spoilage of materials and products (Article 38, Paragraph 2); occupying major workplace facilities such as production lines (Article 42, Paragraph 1); and coercing participation in industrial action through intimidation (Article 38, Paragraph 1).
Management argues that a ban on industrial action is essential because, if the union occupies semiconductor production lines and halts operations, memory output supplied to major customers such as Nvidia and AMD will fall, causing enormous damage. In particular, once semiconductor equipment such as extreme ultraviolet (EUV) lithography machines — costing up to 500 billion won per unit — is powered down, the restoration process is so complex that restart can take several months, leading to massive losses.
The Suwon District Court will hold the second hearing on the injunction to ban industrial action on the same day. The court plans to reach a conclusion before the 21st, the strike's start date.
The problem is that even a court order cannot fully halt the union's general strike train. The union can go on strike while maintaining only the essential personnel recognized by the court on the production lines. An industry official explained, "Essential maintenance personnel account for only 5% of the total, or at most 10%. Once a general strike begins, production disruptions are unavoidable."
30 trillion won in production and economic losses projected
Conditions near for government emergency adjustment authority
Minister Kim Young-hoon: "Dialogue even through the night"
For this reason, a scenario in which the government invokes its "emergency adjustment authority" is also being discussed. Samsung Electronics accounts for 37.1% of South Korea's total exports. If its production lines stop, fatal damage to the national economy and overall exports will follow. Emergency adjustment authority is a compulsory measure through which the government, ex officio, halts a general strike to prevent such a situation.
Articles 76 and 77 of the current Trade Union and Labor Relations Adjustment Act allow the Minister of Employment and Labor to invoke emergency adjustment authority "when there is a clear and present danger that industrial action will significantly harm the national economy or endanger citizens' daily lives." Once invoked, the union must immediately halt its industrial action and cannot resume it until 30 days have passed.
However, whether the politically burdensome emergency adjustment authority will actually be invoked remains uncertain. It is a mechanism through which the government directly intervenes in labor-management issues to adjust interests. If an adjustment unfavorable to the union is issued, it could provoke backlash from more than 120,000 Samsung Electronics employees and their families ahead of the local elections in June. In practice, emergency adjustment authority has been invoked only four times: the 1969 Korea Shipbuilding & Engineering strike, the 1993 Hyundai Motor union strike, and the 2005 Asiana Airlines pilots' strike and Korean Air pilots' union strike.
Minister of Employment and Labor Kim Young-hoon also took a cautious stance on the possibility of invoking emergency adjustment authority, saying, "It must be resolved through dialogue." Appearing on the YouTube channel "Jang Yoon-seon's Reporting Convenience Store" that day, Kim responded to a question about whether emergency adjustment authority could be invoked by saying, "Dialogue is needed, dialogue is urgent — we must keep at it even if it means staying up all night."
