Talks between labor and management at Samsung Electronics were suspended three days after they resumed. With the two sides failing to find common ground on key issues such as scrapping the cap on performance bonuses, concerns are rising that a general strike in May could become a reality.
Choi Seung-ho of the supra-company union at Samsung Electronics said on the 27th, "We declared a suspension of talks to seek a ruling from the regional labor commission on whether management engaged in bad-faith bargaining."
Earlier, the Samsung Electronics Joint Struggle Headquarters formed a joint bargaining team last November with the Samsung Electronics branch of the supra-company union, the Nationwide Samsung Electronics Labor Union (Jeonsamno), and Samsung Electronics Union Donghaeng, and held wage talks with management for about three months.
However, the negotiations ultimately broke down over differences regarding the removal of the cap on the excess profit incentive (OPI). The union has secured the right to strike and has signaled the possibility of launching a general strike in May.
Although a surprise meeting with Vice Chair Jun Young-hyun, CEO of Samsung Electronics and head of the DS division, created momentum to resume dialogue, 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 consistently demanded the removal of the cap in the OPI system," adding, "The core reason talks are now suspended is a difference in views on how to operate the OPI system."
OPI is a performance bonus system under which, if a division's results exceed the annual goal set at the start of the year, up to 50% of an individual's annual salary is paid once a year within 20% of the excess profit. The union's position is that this cap (50% of annual salary) should be abolished.
In the latest talks, management is said to have proposed lifting the cap for the DS division, which handles the semiconductor business, on the condition that an operating margin of 10% is achieved. It also proposed paying any amount exceeding the existing OPI payout limit (50%) in company stock.
In addition, the memory division was reportedly offered a guarantee of payout rates at the level of SK hynix, while the System LSI and foundry divisions were offered an additional 25% payout if deficits improve.
Chairperson Choi said, "We conveyed the view that the system needs to be improved to motivate employees in the System LSI and foundry divisions, but management did not accept this," adding, "We are reviewing procedures to assess whether the talks were appropriate and conducted in good faith."