Kakao and its labor union extended the mediation period during proceedings held at the Gyeonggi Regional Labor Relations Commission, while two of its affiliates failed to reach an agreement.
The Kakao management and union extended the mediation deadline by mutual consent, sources in the information and communications technology (ICT) industry said Tuesday. With both parties' agreement, the mediation period can be extended up to 10 days from the application date. Meanwhile, two Kakao affiliates — DK Techin and XL Games — held mediation proceedings at the Gyeonggi commission on the same day but failed to reach an agreement, resulting in a breakdown. A mediation suspension is a procedure that ends mediation when differences between labor and management are deemed too large to bridge. Following this, the union can secure the right to take industrial action, including strikes, through a member vote.
Earlier, the Kakao chapter of the National Chemical and Food Workers' Union (Kakao union) applied for mediation at the Gyeonggi Regional Labor Relations Commission on the 7th, after wage agreement negotiations broke down at five entities including Kakao, Kakao Pay, Kakao Enterprise, DK Techin and XL Games. Among these, Kakao Enterprise and Kakao Pay had previously failed to reach agreements and secured the right to take industrial action.
According to the industry, the key issues in Kakao's wage agreement are reportedly two-fold: the annual salary increase rate and the performance-based bonus compensation structure. Some sources have reported that the union is demanding 13 to 14 percent of operating profit as performance bonuses. In response, the union issued a statement on the 11th refuting that the demand for 10 percent of operating profit as performance bonuses was merely one of several proposals the company had suggested and reviewed. The union argued that the background to the negotiation breakdown lies not only in the performance-based bonus structure but also in excessive working hours, unilateral execution of performance bonus compensation, and repeated changes of negotiating representatives.
With the breakdown of mediation at the two affiliates on the same day, the union can now proceed with collective action such as strikes or work slowdowns following a member vote. If mediation at Kakao headquarters also breaks down and leads to an actual strike, it would mark the first strike in the company's history at the headquarters level.
"The mediation deadline was extended with mutual consent between labor and management," a Kakao official said. "The company will continue to make efforts toward an amicable agreement." The union is expected to hold a vote at the Kakao union rally to be held on the 20th at the plaza of Pangyo Station in Seongnam, Gyeonggi Province, to decide on whether to strike.
