Talks between labor and management at Samsung Electronics were halted three days after they resumed. With both sides failing to find common ground on key issues such as removing the cap on performance bonuses, concerns are rising that a general strike in May could become a reality.
Choi Seung-ho of the supra-enterprise union at Samsung Electronics said on the 27th, "We declared a suspension of talks to seek a ruling from the regional labor relations commission on whether management negotiated in bad faith."
Earlier, the Samsung Electronics Joint Struggle Headquarters formed a joint bargaining team last November with the Samsung Electronics branch of the supra-enterprise union, the National Samsung Electronics Labor Union (Jeonsamno), and the Samsung Electronics Union Donghaeng, and had been negotiating wages with management for about three months.
However, the negotiations ultimately broke down over differences regarding the removal of the cap on the overachievement performance incentive (OPI). The union has secured the right to strike and has indicated the possibility of launching a general strike in May.
A rapid meeting with Jun Young-hyun, vice chairman and CEO of Samsung Electronics and head of the DS division, recently created momentum to resume dialogue, but the two sides failed to narrow their differences even in working-level and intensive talks held from the 25th through the day.
Chairperson Choi said, "The Joint Struggle Headquarters has continuously demanded the removal of the cap in the OPI system," adding, "The core reason the talks are currently suspended is a difference of views on how to operate the OPI system."
OPI is a performance bonus system that pays once a year, up to 50% of an individual's annual salary, within 20% of excess profit when a business unit exceeds its annual target set at the beginning of the year. The union's position is that this cap (50% of annual salary) should be removed.
In this round of talks, management is said to have proposed removing the cap for the DS division, which handles the semiconductor business, on condition that it achieves a 10% operating margin. It also proposed paying any amount that exceeds the existing OPI limit (50%) in company stock.
In addition, it was reported to have proposed guaranteeing a payout rate at the level of SK hynix for the Memory Business Unit, and an additional 25% payout for the System LSI and Foundry business units if their losses improve.
Chairperson Choi said, "We conveyed our view that system improvements are needed to motivate employees in the System LSI and Foundry business units, but management did not accept this," adding, "We are reviewing procedures to seek a determination on the propriety and good faith of the talks."