Samsung, labour union meet again as Seoul threatens to intervene to block strike

Samsung Electronics and its South Korean labour union began ​another round of talks on Tuesday to break an ​impasse in bonus negotiations, after dialogue on ‌Monday did ​not produce an agreement.

The two sides are under mounting pressure to avert an imminent strike that threatens to hurt the Korean economy and chip production, but remained far apart ‌during the government-mediated pay talks on Monday. South Korea's Prime Minister threatened over the weekend to step in through emergency arbitration to stop a strike that is scheduled to start on Thursday and last for 18 days.

Media reports said on Tuesday, citing the chairman ‌of the National Labor Relations Commission that Samsung and the labour union are narrowing some differences. A court on Monday partially ‌granted Samsung's request for an injunction, ruling that essential staffing levels at some production facilities must be maintained during industrial action.

The ongoing dispute is the biggest clash between Samsung and its labour union since Samsung Electronics Chairman Jay Y. Lee pledged to shed its reputation of union-busting activities in 2020, months after ⁠the creation ​of its first labour union. Samsung ⁠is one of the most sought-after workplaces in Korea, but employees were increasingly frustrated with a widening pay gap with smaller rival SK Hynix, which ⁠took an early lead in supplying high-bandwidth memory for artificial intelligence chip units to Nvidia

SK Hynix introduced overhauls in pay structure last year, resulting ​in bonuses which are more than three times higher than those offered to Samsung workers, accelerating talent defections to SK ⁠Hynix and sparking a surge in Samsung union membership, union members said. Exacerbating workers' ire have been Samsung's record profits as the AI boom drives up ⁠demand ​for chips.

Samsung has proposed that memory chip workers receive bonuses that would top those of SK Hynix employees. The union has demanded Samsung abolish a bonus cap of 50% on annual salaries, allocate 15% of annual operating profit to a bonus ⁠pool shared by workers and formalise this in contracts.

Samsung proposed assigning 9%-10% of its annual operating profit to a bonus ⁠should the profit exceed 200 ⁠trillion won this year, while sticking to the 50% bonus pay cap, the union said. Jay Y. Lee apologised to customers and the public over the labour dispute in his first ‌public comments on ‌the issue. Samsung's customers include Alphabet, Apple, Amazon and Nvidia.

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