Unionists' Strike Looming Large
The possibility of a labor strike is growing at Samsung Electronics as the labor-management confrontation over wage negotiations for 2021 is continuing. Samsung Electronics has not yet suffered a labor strike since its foundation in 1969.
Unionists call for a reform of the pay system. Specifically, they demand a fixed-sum increase in basic wage, a change in performance-based bonus payment standards, and abolition of the comprehensive wage system and wage peak system. They also demand that the company guarantee their right to rest and add seven more days to the paid leave system.
The company's management proposed on March 25 that the issues raised in the wage negotiations for 2021 be discussed in wage negotiations for 2022. Yet, the joint bargaining group of Samsung Electronics’ unions rejected the proposal, demanding that management come up with a salary system reform plan.
“If the management does not come up with a reform plan, we will go on strike based on a vote by labor union members,” the labor union said in a statement. The union has secured the right to strike as the Central Labor Relations Commission terminated its arbitration process last month.
The labor union is demanding five additional paid holidays and the designation of company and labor union foundation days as paid holidays. Unionists are demanding that the management change the financial resources for incentives from economic value added (EVA) to operating profit, and change the base salary increase method from a flat-rate increase to a fixed-sum increase.
The labor union is pointing out that bonuses accounted for a significant portion of Samsung Electronics’ average salary of 144 million won in 2021. The labor union believes that basic salaries should be raised as performance-based bonuses are highly volatile and bonuses, not basic salaries and are not counted in the calculation of severance pays. The management is concerned that if the basic salary increase method is converted to a fixed amount increase system, the principle of giving compensations based on business performances which have been considered a secret of Samsung’s success will be undermined.
Earlier, the management sent an official letter to the labor union on March 25, saying, “If the union adds agendas proposed in 2021 wage negotiations to 2022 wage negotiations, the discussion will proceed smoothly. Let’s discuss them together now.”
The management also suggested that regular meetings between the labor union and HR executives should be held on a bi-monthly basis to promote labor-management communications apart from wage negotiations.
The labor and management have negotiated wages 15 times since October 2021, but the negotiations fell through because they could not iron out differences between their positions. Currently, the total number of members of the four labor unions at Samsung Electronics is about 4,500, or four percent of the total number of employees. The largest labor union is the National Samsung Electronics Labor Union, which was established in November 2019 and is affiliated with the Federation of Korea Trade Unions (FKTU).