Under new guidelines, Samsung strike could have been illegal — South Korean labor minister
South Korean Labor Minister Kim Yong Hoon said that a previously planned strike by Samsung Electronics unions over a demand for a fixed share of the company’s operating profit could have been considered illegal under new government guidelines. This was reported by The Korea Herald.
Last week, the Ministry of Employment and Labor released guidelines on applying the revised Trade Union and Labor Relations Adjustment Act. The law expanded the list of labor disputes to include changes in working conditions resulting from specific management decisions. At the same time, the guidelines exclude demands to set a fixed share of a company’s profit for bonus payments from matters subject to mandatory bargaining.
The minister’s position
Speaking on SBS, Kim Yong Hoon explained that the guidelines were intended to restrict demands to allocate a certain percentage of operating profit to bonuses before taxes are paid. According to him, foreign investors may misinterpret such demands, potentially reducing investment and weakening companies’ competitiveness.
Asked whether the Samsung Electronics strike would have been illegal if the rules had been in effect before the dispute began, the minister answered in the affirmative. He reiterated criticism of demands for a predetermined share of operating profit for bonus payments.
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Agreement with the unions
In March, three Samsung Electronics unions, including the Samsung Electronics Super Corporate Union, voted to hold a general strike. It was supported by 93.1% of those who took part in the vote. The unions and the company reached an agreement on May 20.
Initially, the unions demanded that 20% of Samsung’s operating profit be allocated to bonuses. Under the agreement reached, employees working in semiconductor production will receive an additional bonus funded from 10.5% of the company’s performance indicator. This year, that indicator specifically means operating profit, while the parties will separately agree on its definition for subsequent years. The agreement also removed the previous cap on bonuses at 50% of annual salary.
The new government guidelines are not retroactive and do not apply to Samsung negotiations that have already concluded. Union federations criticized the document, saying that it narrows the scope of labor disputes. Business representatives, meanwhile, expressed doubts about its binding force, since it consists of administrative recommendations rather than legally binding rules.
