President Lee Jae-myung said Thursday that "sharing operating profit before taxes is something even investors cannot do," adding that "some unions have crossed a reasonable line." He publicly issued a sharp criticism of union demands over performance-based pay after the final post-negotiation mediation in Samsung Electronics' labor talks collapsed. Samsung Electronics' management and union resumed wage negotiations that day, presided over by Employment and Labor Minister Kim Young-hoon.
Presiding over a Cabinet meeting at the presidential office, Lee said, "It is fine for some unions to work to push through their interests by engaging in collective bargaining through the right to organize and the right to collective action, but isn't there a reasonable limit to that as well?" He then stressed regarding the three labor rights that "the power was not given to collectively push through something solely for the benefit of a few individuals."
Lee pointed out, "Even the government contributes to the growth and development of specific companies," adding, "It can be said to be a common share belonging to the people, so institutionally sharing a certain percentage of operating profit before even paying taxes is something even investors cannot do." This pointed to the Samsung Electronics union's demand to institutionalize 15% of operating profit as a source for performance-based pay as having gone too far.
Samsung Electronics' management and union held consecutive negotiations from the 18th until that morning but ultimately failed to reach an agreement. The union has stated it will begin a general strike from the 21st as scheduled. In response, at 4 p.m., four and a half hours after the negotiations broke down, Minister Kim personally presided over wage negotiations at the Gyeonggi Regional Employment and Labor Office in Suwon. The talks proceeded in the form of "voluntary negotiations" between labor and management, rather than an official mediation procedure of the National Labor Relations Commission.
Labor and management remain at odds over the criteria for distributing performance-based pay. The union demands that when performance-based pay is divided into "common distribution across the entire semiconductor (DS) division" and "distribution linked to each business unit's performance," a 7-to-3 ratio should apply, while management's position is that such a demand is excessive. The company believes that if the proportion of common distribution is expanded excessively, employees in loss-making business units would receive performance-based pay at levels similar to those in profitable units, which could shake the merit-based management system.
