Samsung Electronics Co. and its union will resume government-led mediation talks on Monday, just three days before a major strike planned by the South Korean company’s employees.
The South Korean government entered the middle of negotiations to try to reduce the impact that the strike could have on South Korea’s national economy. Seoul Prime Minister Kim Min-seok warned that the government will consider all possible measures to minimize the potential damage to the national economy.
The company’s largest union plans to start a strike next Thursday (21), which could interrupt production at the world’s largest memory chip manufacturer. The union said more than 46,000 of its members had expressed interest in participating in the strike.
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Workers and management interests remain sharply divided over performance bonuses tied to profits from the company’s artificial intelligence-related semiconductor division.
The president of Samsung Electronics, Lee Jae-yong, made a public apology on Saturday (16) for having caused concern about the company’s “internal” problems, at the same time as he called for unity within the company.
“Now is the time to wisely gather our strength and move in one direction,” Lee said at Gimpo International Airport in western Seoul after returning from an overseas business trip. “Union members, Samsung family members, we are one body, one family.”
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“I sincerely apologize to our global customers for causing concern and apprehension regarding our company’s internal issues,” he said, bowing several times.
In response, Choi Seung-ho, head of the union, said that employees joined the union because their trust in the company had been broken. He called for efforts to restore that confidence in upcoming negotiations.
The union demanded fixed performance bonuses equivalent to 15% of the operating profit generated by the company’s semiconductor division, along with the removal of the pay cap.
Management proposed maintaining the current excess profit incentive system, allowing the total amount of bonuses to be calculated based on 10% of operating profit or economic value added, known as EVA.
The company also proposed introducing a special remuneration system, saying this would help create a more flexible incentive structure.
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The South Korean government is studying measures to prevent the economy from being harmed by the strike. Under South Korean labor law, the Ministry of Labor can invoke an emergency adjustment measure that suspends strikes for up to 30 days if it is considered that the strike could seriously harm the national economy or disrupt the daily lives of citizens.
According to the government, the economic impact could reach 100 trillion won (R$337 billion).
* With information from Yonhap News.
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