S. Korea’s Lee urges ‘limit’ to labour action amid Samsung unrest
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Samsung's labour union said a planned 18-day work stoppage would go ahead on May 21.
PHOTO: REUTERS
SEOUL – South Korean President Lee Jae Myung called for an “appropriate limit” on collective labour action, speaking at a Cabinet meeting after government-mediated talks between Samsung Electronics and its union broke down, paving the way for a strike.
While Mr Lee did not mention Samsung by name, he spoke shortly after the chipmaking powerhouse’s labour union leader said a planned 18-day work stoppage would go ahead on May 21, after negotiations once again ended in a stalemate. The company blamed “excessive” demands on the part of the union.
While it is “understandable that some labour unions are working to secure their interests through their rights, there must also be an appropriate limit”, Mr Lee said, according to a live stream of the Cabinet meeting.
Samsung shares finished 0.2 per cent higher reversing an earlier 4.4 per cent loss after the breakdown in talks. The benchmark Kospi also narrowed its earlier loss of 3 per cent to close about 1 per cent down.
The union wants Samsung to scrap an existing bonus cap, allocate 15 per cent of its operating profit to worker bonuses and formalise those terms in employment contracts.
Samsung had proposed allocating 10 per cent of operating profit to bonuses, along with a one-time special compensation package that exceeds industry standards. Samsung executives argued that the union’s demands would be difficult to sustain over the long term.
“It is the investors, the shareholders who receive the share of operating profit,” Mr Lee said, adding that he found it a bit “hard to understand” the idea of sharing a fixed percentage of operating profit through a formalised system, before taxes are deducted.
More South Koreans are demanding a greater share of those profits after SK Hynix agreed in 2025 to allocate 10 per cent of annual operating profit to a performance bonus pool.
Samsung’s lingering labour dispute, which puts the company at risk of production delays and complications accelerating development of its next-generation semiconductors, is being closely watched by other firms. BLOOMBERG
