Samsung Electronics labor and management on the 11th entered post-mediation. It is effectively the final round of talks ahead of the general strike slated for the 21st. If mediation breaks down, the matter will go to court, because Samsung Electronics has filed for an injunction to ban "illegal industrial action" against the National Samsung Electronics Labor Union.
In legal circles, analysts say that because the Supreme Court has recently declined to recognize management performance bonuses as wages in a series of rulings, it may be difficult to recognize the legitimacy of the union's strike.
According to legal sources on the 11th, the Suwon District Court will hold a second hearing on the 13th for the injunction application that Samsung Electronics filed against the union. The court is said to be planning to issue a decision before the scheduled general strike on the 21st.
The core of the dispute is performance bonuses. The union is demanding the removal of the cap on performance bonuses and payment of 15% of annual operating profit as performance bonuses. Based on Samsung Electronics' annual operating profit forecast of 30 trillion won for this year, that would be about 4.5 trillion won. In the semiconductor institutional sector, a performance bonus close to 600 million won per person would be possible. The company, however, said it would "maintain top-of-the-industry compensation" but that it is difficult to accept removing the cap on performance bonuses.
◇"Performance bonuses are not wages"… Supreme Court precedent becomes a variable
The issue is whether the demand for performance bonuses constitutes a legitimate objective of industrial action. For a union strike to be recognized as legitimate, its objective must be the maintenance or improvement of working conditions. However, many in legal circles interpret performance bonuses based on excess profits as having a strong nature of a management judgment area, making them different from ordinary wages.
In fact, on Jan. 29, the Supreme Court, in a lawsuit filed by former employees of Samsung Electronics against the company, distinguished between the "target achievement incentive (TAI)" and the "over-profit incentive (OPI)." TAI, which is paid based on the level of target achievement by half-year, can be considered wages because employees can manage and control it to some extent, but OPI, which is paid once a year funded by the corporations' excess profits, was deemed difficult to consider as wages.
The Supreme Court viewed OPI as determined by a combination of factors beyond the provision of labor, including capital scale, expense, market conditions and management judgment. A ruling with the same purport was handed down in February in a severance pay lawsuit filed by former employees of SK hynix.
An attorney who requested anonymity said, "Given recent precedents, it is true that the likelihood of judging that the demand for performance bonuses falls within the purpose of a strike is low."
◇Samsung says "it is dangerous if semiconductor processes stop"… scope of maintaining safety facilities is at issue
The particularities of the semiconductor industry are also a factor. The current Trade Union and Labor Relations Adjustment Act prohibits stopping or interfering with the maintenance and operation of safety protection facilities during industrial action. This means that managing toxic gases and chemicals used in semiconductor processes and conducting wafer degradation prevention work must be maintained even during a strike.
Samsung Electronics reportedly emphasized these points as well at the first hearing held on the 29th of last month. The union, on the other hand, said, "Management is not specifically presenting the scope of safety duties to be maintained and the number of personnel," adding, "We are directing and supervising union members to ensure they do not engage in illegal acts."
If the strike materializes, concerns over production disruptions could grow, raising the possibility of government intervention. Under the Trade Union and Labor Relations Adjustment Act, if the scale of industrial action is large or is feared to have a significant impact on the national economy, the Minister of Employment and Labor (MOEL) may decide on emergency mediation.
A legal source said, "Considering the impact of this strike on the national economy, there is a possibility that the government will initiate emergency mediation," adding, "In that case, the union must suspend industrial action and enter the National Labor Relations Commission's mediation procedure."