Samsung Electronics, the South Korean tech giant, may face its first-ever labor strike after wage talks between the company and unionists failed to reach an agreement. The Korea National Labor Relations Commission attempted to arbitrate the wage deal between Samsung and the labor union but decided to halt the talks due to an unbridgeable gap.
This has resulted in the labor union, which consists of around 9,000 members, securing the right to legally strike through a member vote. This marks the second time the commission has arbitrated between the two sides, the first time being on April 27.
The labor group, which makes up 7.4% of Samsung’s employees, will hold a press conference in front of Samsung Electronics’ Seocho building on Thursday to announce its position on the decision to end mediation. Samsung has faced no strikes since its founding in 1969. The labor group secured the right to strike last year after wage talks failed but did not take action.
Samsung’s labor-management council, elected to discuss working conditions with representatives from both the company and the employees, including wages, has been at the center of the dispute. The council members are elected through an employee vote. The labor union claims that the company has illegally concluded a wage agreement through the council instead of the union for the past two years.
Samsung announced that it had agreed to an average wage increase of 4.1% through the labor-management council on April 14. However, the union negotiation body had initially demanded a 10% wage hike and suggested options between a higher wage increase rate than Samsung’s rival firms or a lump sum allowance, on top of the withdrawal of 17.7 hours of fixed overtime payments. The union claims that every time it negotiates wages, Samsung unilaterally decides and announces its final decision.
Samsung has also effectively put on hold the increase in the compensation limit for registered executives due to its worsening business conditions and the global economic downturn.
The labor union’s push for a higher wage increase rate is not the only issue at hand. The group has also criticized Samsung’s labor-management council, which they claim is illegal and does not represent the interests of unionized workers. The company has defended the council, saying that it is a legitimate representation of both management and employees and that its decisions are made through a democratic process.
This dispute is happening amid Samsung’s worsening business conditions, which have been attributed to the global economic downturn caused by the COVID-19 pandemic. The tech giant’s net profit in the first quarter of 2021 fell by 44 percent year-on-year, with lower smartphone sales and rising competition from Chinese rivals being cited as the main factors.
A labor strike at Samsung, which is South Korea’s largest conglomerate and the world’s biggest smartphone maker, would be a significant development. It would also come at a time when the country’s labor movement is gaining momentum, with more workers across different sectors demanding better working conditions and higher wages.
The labor union has not announced a specific date for the strike, but its press conference on Thursday is expected to shed more light on its plans. Samsung has not yet commented on the possibility of a strike, but the company has previously warned that a prolonged strike could have a negative impact on its business.
This latest development underscores the ongoing tension between labor groups and large corporations in South Korea. While the country’s labor laws protect the right to strike, companies have been accused of using various tactics to discourage workers from doing so, including hiring replacement workers and threatening to cut jobs.