Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Samsung Biologics labor dispute drags on amid tensions over police complaint, AI plants
A red light is seen in front of a Samsung Biologics plant in Incheon, Monday, when the company's labor union staged a strike. The strike ended on Tuesday and the union members are set to stage "lawful protests" to push for their demands. Korea Times photo by Shim Hyun-chul
By Nam Hyun-woo
1st-ever strike disrupts production, analysts warn of growing revenue impact
The labor dispute between Samsung Biologics’ union and management is escalating as talks over wages and bonuses remain stalled, with the union continuing to demand provisions requiring its consent for the introduction of new technologies and machinery — a move that could be viewed as encroaching on management rights.
According to industry officials, Wednesday, Samsung Biologics has filed a criminal complaint with Incheon police against a union member for allegedly disrupting the company’s operations by entering a production site without authorization and monitoring manufacturing processes on Monday, when the union was staging a strike.
The union member is accused of monitoring operations without proper authority and disrupting normal manufacturing activities. Samsung Biologics views the act as a clear deviation from legitimate labor activities and a serious violation of its management and facility control rights.
The complaint marks the latest escalation in the dispute between the company’s management and labor union. Samsung Group United Union's Samsung Biologics chapter staged a strike from Friday to Tuesday, a first in the company’s history, and continued its protest on Wednesday by refusing overtime and weekend work, which it claims falls within legal boundaries.
The union is demanding a 14.3 percent wage increase, a 30 million won ($20,600) incentive payment per employee and the allocation of 20 percent of operating profit as performance bonuses. The company has offered a 6.2 percent wage increase, arguing that accepting the union’s demands would raise the total wage increase rate to 21.3 percent.
The union is also demanding the company to include several provisions, which are seen as infringing on management rights in the collective bargaining agreement.
According to industry officials, the union demanded that the company establish a joint labor-management council and obtain union approval when introducing new machinery and technologies or making improvements to work processes.
The provision is interpreted as requiring union’s consent if the company seeks to introduce new technologies or equipment such as artificial intelligence (AI), robotics and others that can affect the workforce. The union said it has included this out of concern that the company could pursue unmanned “dark factory,” although Samsung Biologics said it has no such plans.
Along with this, the union has also demanded notification of executive appointments and dismissals, union approval for workforce allocation and union review and approval for corporate spinoffs or outsourcing plans.
Samsung Biologics employees enter the company's plant in Incheon, Wednesday, after ending their strike that lasted from Friday to Tuesday. Yonhap
Against this backdrop, the two sides canceled a scheduled meeting between top negotiators on Wednesday after management took issue with conversations between the negotiators being leaked on online. They are set to join a tripartite meeting involving the labor ministry on Friday, but their differences are unlikely to be resolved anytime soon.
The two sides held two discussion sessions led by a local labor office on Monday, after holding another session on April 30, but failed to narrow their differences.
Though the union members ended their strike on Tuesday and continued their “lawful” protests, the company is expected to pile up losses.
According to Kiwoom Securities analyst Huh Hye-min, the company sustained an estimated 150 billion won in revenue losses during the strike due to production disruptions, and the impact on second-quarter earnings is expected to grow if the dispute is not resolved quickly.
“The strike is expected to weigh not only on the company’s earnings but also on its efforts to secure contracts from global big pharmaceutical companies,” Huh said.
A Samsung Biologics official, meanwhile, said, “Even if the labor union claims its actions will remain within legal boundaries, the scale of losses could vary depending on the extent and manner of the campaign.”
“Given the around-the-clock nature of the biopharmaceutical industry, damage could grow further if workers refuse to respond even to essential emergency situations. The company will do its best to minimize additional losses.”