Samsung union to press ahead with strike despite injunction, risk of fines

Audio report: written by reporters, read by AI

Samsung Electronics' largest labor union is sticking with a plan to strike beginning Thursday, even as a court order requires key operations to continue at normal levels, with unions facing fines of 100 million won ($67,000) per day should they violate the court decision.

The Suwon District Court partially granted an injunction sought by Samsung against its unions on Monday. While stopping short of prohibiting the strike outright, the court ordered that operations at semiconductor factories be maintained at normal levels of staffing, operating hours and scale in key areas throughout any collective action. The court also barred unions from occupying facilities related to production and core business operations. 

Unions found in violation face fines of 100 million won per day, while union chiefs would each be obligated to pay 10 million won per day.

During the same day, the second round of post-mediation talks opened at 10 a.m. at the National Labor Relations Commission (NLRC) in Sejong, roughly a week after the first round collapsed without an agreement. Though the union had initially indicated it would resume talks only after the walkout, both sides returned to the table following a public appeal for dialogue from the government and Samsung Electronics Executive Chairman Lee Jae-yong.

Mediation talks between Samsung Electronics' management and labor ended Monday without a conclusion. Discussions are set to resume Tuesday at 10 a.m. in what is shaping up to be a final effort to avert an 18-day strike the unions have announced over unmet demands on wages and bonus distributions.

The Bank of Korea on Monday cited the possibility of a strike as a major risk to the Korean economy. In a worst-case scenario, the central bank estimated that a full production halt could result in damages of 30 trillion won, shaving 0.5 percentage points off this year's economic growth rate. Following the court ruling, however, it is unlikely that chip manufacturing production will come to a full stop. 

Yet how significantly an 18-day strike would disrupt chip manufacturing operations remains a matter of dispute, as management and labor have staked out conflicting interpretations of what the court meant by "normal levels" of staffing.

While the court defined "normal" as referring to ordinary weekdays, or ordinary weekends and holidays, the Samsung Electronics chapter of the Samsung Group United Union (SGUU) argued that the court’s ruling permits weekend and holiday staffing levels to apply even on weekdays, contending that the definition of "normal" in the court's decision could mean any of the three time designations.

The union said the strike will be carried out as planned, with the number of workers required to remain on duty falling below Samsung's requested 7,000 — leaving the vast majority of its roughly 46,000 members free to participate.

Management struck back, arguing that the ruling is unambiguous. It said that weekday-level staffing must be maintained on weekdays, and weekend and holiday-level staffing on weekends and holidays.

“The company will separately notify employees in departments required to report to work as normal during the strike period,” Samsung said in a statement following the ruling, adding that it would do everything possible to minimize operational disruption.

Samsung's legal representative, Jipyong, reinforced the management position in a separate statement. “The claim made by the cross-affiliate union and its legal representatives that maintaining weekend and holiday staffing levels during a strike is sufficient to operate safety protection facilities and carry out security operations is an interpretation that contravenes the injunction ruling,” the firm said.

A flashpoint is whether the government will invoke its emergency arbitration powers should mediation collapse. Under Korean law, emergency arbitration can be triggered when a strike is determined to threaten daily public life or seriously damage the national economy. Once invoked, collective action is barred for 30 days while the NLRC conducts mediation. If even that process appears unlikely to yield an agreement, the commission may refer the dispute to binding arbitration.

Prime Minister Kim Min-seok, in a rare public address on Sunday, urged both sides to reach a compromise while warning that the government "will have no choice but to consider all available measures, including emergency arbitration, to protect the economy."

Amid a semiconductor upcycle, with Korean chipmakers Samsung Electronics and SK hynix enjoying record-breaking profits, Samsung’s union has demanded the abolition of an existing bonus ceiling and a provision guaranteeing 15 percent of annual operating profit be set aside as a bonus pool. Management has countered with a proposal to peg the bonus pool at 10 percent of operating profit, supplemented by a one-time special compensation package above industry benchmarks.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]