With only four days left until the announced general strike by the Samsung Electronics union, labor and management agreed to make a "final settlement" attempt in second-round talks on the 18th. Attention is on whether they can reach a dramatic deal, spurred by Samsung Electronics Chair Lee Jae-yong's apology to the public and his appeal to join forces as "one family."
◇ Samsung Electronics heads into final talks on the 18th before strike
According to the industry on the 17th, Samsung Electronics labor and management will attend the second post-mediation meeting at the National Labor Relations Commission (hereafter the commission) in Sejong on the 18th. With a strike looming, it is highly likely to be the de facto final negotiation. Previously, from the 11th to the 13th, under the commission's mediation, Samsung Electronics labor and management held post-mediation talks and negotiations, but they broke down after failing to narrow differences over the criteria for paying performance bonuses.
Labor and management are signaling a commitment to negotiate in good faith. Management accepted the union's demand and replaced its chief negotiator from Vice President Kim Hyeong-ro to Ye Myeong-gu, DS (semiconductors) Head of Team for People. Ye is the top human resources officer for the semiconductor business unit. The trans-enterprise labor union Samsung Electronics chapter (hereafter the trans-enterprise union), which holds a majority at Samsung Electronics, said, "Management accepted the request to replace the chief negotiator, and we agreed to resume talks." To aid understanding of the process, the union also accepted management's request to allow Vice President Kim to attend the mediation without speaking, with both sides stepping back and agreeing to continue good-faith negotiations.
The previous day, Lee personally apologized and sought to soothe the union, saying, "We are one body, one family." Returning to Seoul's Gimpo Business Aviation Center (SGBAC) in Gangseo District on the 16th after a business trip to Japan, Lee told reporters, "Samsung family, we are one body, one family. Now is the time to wisely join forces and move in one direction," adding, "I will face the biting wind and rain and take all the blame. Let's do our best so we can take pride in being Samsung people." He also said, "I bow my head to our customers and the public to say I am sorry for causing concern."
◇ Government's emergency arbitration power emerges as a variable
In these talks, the union is demanding institutionalization to fix performance bonuses at 15% of operating profit and abolish the bonus cap. Management, by contrast, proposed keeping the existing bonus system but paying a special reward equal to 10% of operating profit with no cap if the company reaches No. 1 in the industry. Fifteen percent of operating profit would be 45 trillion won, considering this year's Samsung Electronics earnings outlook of 300 trillion won. For semiconductor employees on average, that approaches 600 million won.
Following Lee's appeal, Prime Minister Kim Min-seok raised the possibility in a public address that the government could use its emergency arbitration power in the event of a general strike, increasing the chance labor and management could wrap up negotiations dramatically. In his address, Kim said, "Rather than insisting on a strike, the Samsung Electronics union should make efforts to find common ground through dialogue and compromise," adding, "If a strike is feared to cause enormous damage to the national economy, the government will consider every possible response, including emergency arbitration." Choi Seung-ho, chairperson of the Samsung Electronics trans-enterprise union, said the same day, "We have reviewed the prime minister's address and will faithfully engage in post-mediation so that labor and management can achieve harmony."
If the talks collapse, the union has indicated it will push ahead with a strike. The union has announced an 18-day general strike from the 21st to July 7. If the government invokes emergency arbitration against the strike, the union must immediately halt industrial action and strikes are banned for 30 days. Continuing strike action during that period could trigger an investigation for legal violations. During the 30 days, labor and management must resume talks, and if they fail to reach an agreement, the commission chair will unilaterally refer the case to arbitration. Once an arbitration plan is issued, labor and management must comply.
Since the emergency arbitration system was introduced in 1963, it has been invoked four times. These were the 1969 Daehan Shipbuilding strike, the July 1993 Hyundai Group Union Federation strike, and the 2005 Asiana Airlines and Korean Air Lines strikes. In the 2016 Hyundai Motor union strike, a dramatic labor-management agreement was reached after the government signaled it would declare emergency arbitration, so it was not invoked. Labor circles are voicing strong opposition to invoking emergency arbitration. The Federation of Korean Trade Unions said in a commentary that day, "Attempting to apply emergency arbitration solely because of large economic ripple effects risks setting a precedent that effectively restricts the right to strike for big-company workers," condemning it as "highly inappropriate."