Samsung Electronics faces an escalating strike risk after union mediation failed early Wednesday. The National Labor Relations Commission convened last-ditch talks between management and the company’s largest union. The union demands a performance bonus equal to 15 percent of operating profit. The union also wants to remove the current bonus cap. Consequently, this strike risk stems from these unresolved demands.
The union fixed both the timing and duration of the strike. The walkout would last 18 days starting May 21. Samsung is the world’s largest memory chipmaker. A prolonged strike could affect production, exports, and investor sentiment. JPMorgan warned a prolonged strike could weigh on Samsung’s annual operating profit. Semiconductor fabs run around the clock. Thus, this strike risk has drawn government attention.
Emergency arbitration could manage the strike risk. The labor minister can invoke emergency arbitration when a strike harms the national economy. Korea used this measure only four times in history. Deputy Prime Minister Koo Yun-cheol wrote that a strike must not happen. Labor Minister Kim Young-hoon said the government would arrange further talks. However, legal experts hold different views. Park Ji-soon, a law professor, said a strike would have an enormous economic impact. Jung Heung-jun disagreed, saying emergency arbitration is not appropriate now.
A court ruling due before May 21 could shape the strike risk. The Suwon District Court is reviewing Samsung’s request for an injunction. If the court accepts part of the request, the union would face limits on strike conduct. If the court rejects, the union could gain momentum. The court may issue its decision as early as Thursday. Union chief Choi Seung-ho said even a partial injunction would not stop the strike. He said emergency arbitration would only delay the strike a little. Therefore, the strike risk remains high regardless of legal maneuvers.
