Kakao (035720.KS) and its labor union failed to narrow differences over the size and calculation method of performance bonuses during a second round of mediation by the labor commission, raising the prospect of the first strike in the company's history.
The union plans to hold a rally on June 10 and launch full-scale collective action including a strike, industry sources said Wednesday.
According to the industry, the Kakao branch of the Korean Federation of Chemical, Textile and Food Industry Workers' Unions under the Korean Confederation of Trade Unions has filed for a 1,200-person rally in the Pangyo Station area of Seongnam, Gyeonggi Province, from 9 a.m. to 4 p.m. on June 10. In a statement, the Kakao union said, "A decision to suspend mediation has been issued by the labor commission regarding this year's wage agreement negotiations with Kakao Corp.," adding that "we will fully prepare for the June strike struggle."
Kakao headquarters' management and union held an eight-hour second mediation meeting on wage negotiations on Tuesday but failed to reach common ground. The two sides have differed over a proposal to pay 13 to 14 percent of last year's operating profit as performance bonuses and whether to include 5 million won worth of restricted stock units (RSUs) in the bonus calculation. The union maintains that RSUs should be excluded from the performance bonus calculation as they constitute a separate compensation that has already been agreed upon. Discussions continued in the second mediation over whether to include RSUs and other issues, but talks ultimately broke down, leading the Gyeonggi Regional Labor Relations Commission to decide to suspend mediation.
Following the suspension of mediation, the Kakao headquarters union secured the right to industrial action. If a strike actually takes place, it would mark the first headquarters-level walkout in Kakao's history. While Kakao Mobility staged a partial strike in June last year, there has been no precedent for a strike at Kakao's headquarters. With affiliates including Kakao Enterprise, Kakao Pay, DK Techin, and XL Games also passing strike votes, the possibility of a joint general strike is also emerging.
However, prospects for a last-minute agreement have surfaced as Kakao CEO Chung Shina has stepped in directly. In an internal company notice on Wednesday morning, Chung said, "Although we have not yet sufficiently narrowed our differences, we ultimately must work together within Kakao and move in the same direction." She added, "We will make greater efforts to resolve our differences through dialogue and once again unite as one Kakao." She also signaled the possibility of organizational restructuring, noting that "it is time for the company to establish a stable framework."
