Samsung Electronics could get its first strike

Tech

Published: 12 Feb. 2022, 07:00

Samsung Electronics could get its first strike

Unionized members of Samsung affiliates stage a protest ahead of a wage negotiation on May 6, last year. [YONHAP]

Samsung Electronics is facing its first strike after a wage deal fell through last month.

National Samsung Electronics Union, the biggest union at the electronics maker, filed for arbitration with the National Labor Relations Commission on Feb. 6, considered a first step to a strike.

Members of the National Samsung Electronics Union file for arbitration of a wage dispute with the National Labor Relations Commission at the commission's office in Sejong on Feb. 4. [YONHAP]

The union and management failed to reach agreement on a wage increase rate for 2021. The union demanded annual wages be raised by 10 million won ($8,340) for all employees and 25 percent of annual operating profit be earmarked for bonuses.

Management offered a 4.5 percent increase to base salaries.

After the negotiations were called off, the two sides will have 10 days for mediation. If they remain divided after that period, the union get the right to strike or engage in other activities aimed at strengthening collective bargaining.
“The first meeting in the meditation process is going to be held today,” said Son Woo-mok, a director of the National Samsung Electronics Union, in a phone interview on Feb.11.

“Since the procedure is underway, we can’t say which action we will be taking should the talks fall through,” he said.

A spokesperson for Samsung Electronics said that it “will engage in the process in accordance with the rules.”

Even if a strike is called, it will likely be symbolic and not have any impact on production of chips and smartphone.

“The union has around 4,800 members in total, which is less than 5 percent of the entire workforce at Samsung Electronics,” said a source in the tech industry.

“Of the members, only a part of them will participate in a possible walkout, which won’t likely have a major impact on production, just like with Samsung Display,” the source said.

Samsung Electronics began its first-ever wage negotiations with unionized labor last year, a month after the company signed its first official agreement with labor unions in 52 years.

Previously, Samsung Electronics had negotiated wages through an internal labor-management council that companies are obligated to establish according to the Act on the Promotion of Employees’ Participation and Cooperation.

Despite the limited impact of a strike, the Samsung case exposes the challenges of meeting expectations of workers at a time when big-name tech companies in and outside of the country have announced aggressive pay raises to keep talented engineers.

SK hynix paid half of annual salaries as bonuses to all employees last month, following record-high performances driven by surging demand for semiconductors.

Nexon offered a pay raise of 8 million won to all workers at the gaming company last year. Competitors Netmarble and NCSoft announced comparable raises.

Outside Korea, Apple, Meta and Amazon all promised big raises to programmers and developers.

The pressure will keep on rising with inflation.
An alliance that represents the labor unions of Samsung’s 12 affiliates demanded a 10 percent increase in base salaries for 2022, citing soaring inflation and property prices. The National Samsung Electronics Union belongs to the Federation of Korean Metalworkers’ Trade Unions.

The company union has not agreed to an increase for this year given that negotiations over 2021 raises stalled.

“The wage deal for 2021 needs to be addressed first, before we talk about this year’s rate,” Son said.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]