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Samsung Electronics labor union threatens to stage first-ever walkout

Samsung Electronics labor union members are seen staging a protest in front of Samsung Electronics office in Seocho-gu, Seoul Wednesday. (Yonhap)
Samsung Electronics labor union members are seen staging a protest in front of Samsung Electronics office in Seocho-gu, Seoul Wednesday. (Yonhap)
Labor unions of South Korean tech titan Samsung Electronics said they could go on strike for the first time in over 50 years, after their demands for a pay raise and special summer leave in a first-ever wage negotiation fell on deaf ears.

Protesters representing four labor unions comprising over 5,000 employees said Wednesday they will work to salvage its wage negotiation with Samsung’s management, with a walkout -- possibly with other trade unions under Samsung affiliates -- being their last resort. Samsung employs more than 110,000 employees.

“A walkout is one of our means to push through our calls,” Lee Hyun-kuk, a Samsung employee and trade union member, said during a press conference held near Samsung’s Seocho-gu office in Seoul.

“We will start discussion this afternoon on the possible options to proceed wage negotiations, and a strike could take place if there is no other option left for us.”

The remark comes after the labor union’s arbitration with the management at the government agency National Labor Relations Commission fell through earlier this week. This gave the labor unions a right to stage a walkout.

Samsung’s labor unions filed for the arbitration on Feb. 4, following over a dozen rounds of talks between the labor unions and the management since October.

The labor unions during the arbitration have called on the company to implement a general basic pay raise of 10 million won ($8,350) for each employee this year to narrow the pay gap between employees and reduce what they said was excessive competition.

They also called on the company to calculate employees’ incentives with higher transparency. Samsung adopts an economic value-added incentive compensation plan, and the labor union argued the system causes opacity in employee evaluations and a wider pay gap between employees. This also comes in comparison with domestic chip rival SK hynix, which fixed the total incentive to 10 percent of its annual operating profit a year prior. Samsung’s labor union opted out of an earlier proposal to dole out a 25 percent of yearly operating profit to employees uniformly.

Labor unions also urged the management to scrap the controversial “comprehensive wage system,” under which total overtime allowance is included in employee’s basic salary -- meaning workers don’t get paid for overtime -- as well as the “wage peak system.” The wage peak system involves an annual cut in salaries to employees nearing retirement, and has been suggested by the government as a way to encourage firms to allow later retirement.

Other requests included a special summer leave, as the company only offered employees minimum annual leave under the Korean rules, unlike competitors like memory chip maker SK hynix.

Labor unions also claimed that the management have not been sincere enough with them. Protesters said they prefer a “sincere” discussion with management to a walkout.

An in-house labor-management council of Samsung has suggested a minimum basic pay raise of 15.7 percent for this year, depending on performance, but Samsung’s labor union said the suggestion implied a continuation of it‘s opaque merit-based system, and called for a uniform pay raise for all workers.

By Son Ji-hyoung (