PM welcomes Samsung Electronics pay talks, warns of possible emergency arbitration

Prime Minster Kim Min-seok, center, delivers a public address regarding a strike at Samsung Electronics at Government Complex Seoul, Sunday. Yonhap

Prime Minister Kim Min-seok on Sunday welcomed the planned resumption of dialogue between Samsung Electronics and its labor union amid a looming strike, while warning that the government will consider every possible measure, including emergency arbitration, to minimize potential damage to the national economy.

Kim made the remarks in a public statement addressed to the nation, as labor and management have decided to resume government-led mediation talks Monday, just four days ahead of a planned walkout.

The two sides have remained widely divided over performance-based bonuses tied to the company's earnings from the artificial intelligence (AI)-related semiconductor business.

"The government sincerely welcomes the decision to resume dialogue," Kim said, calling the planned talks "the last opportunity" to prevent a strike.

The company's largest labor union plans to begin the 18-day strike starting Thursday. The union has said over 46,000 of its members have expressed willingness to join the strike.

"As a strike at Samsung Electronics can inflict enormous damage on the national economy, the government will have no choice but to consider all possible response measures, including emergency arbitration, in order to protect the economy," Kim said.

Kim warned that a strike would not only affect Samsung Electronics itself, but also trigger broader consequences, including a decline in exports, instability in financial markets, and contractions in investment and employment among numerous partner companies, with the resulting economic damage reaching up to 100 trillion won ($66.98 billion).

Under South Korean labor law, the labor ministry can invoke an emergency adjustment measure that suspends strike action for up to 30 days if the strike is deemed likely to seriously harm the national economy or disrupt the daily lives of citizens.

The union has demanded fixed performance bonuses equivalent to 15 percent of the operating profit generated by the company's semiconductor division, along with the removal of the payout cap.

The company proposed keeping the current bonus system while making it more flexible by changing how bonuses are calculated and introducing a special compensation program.

Samsung Electronics Chairman Lee Jae-yong issued a public apology on Saturday for causing concern over the company's "internal" issues, while calling for unity within his company.

Meanwhile, the Federation of Korean Trade Unions (FKTU) said criticism of the union must stop, arguing that the dispute over bonuses should not be dismissed simply as "excessive demands," but rather viewed as a legitimate question about how profits generated by the company should be distributed.

The group also criticized recent discussions about invoking emergency arbitration rights, calling them "highly inappropriate."

"It is dangerous to attempt to apply emergency arbitration simply because of the large economic impact, as this could effectively set a precedent for restricting the right of workers at major corporations to strike," the FKTU said.