Court puts brakes on Samsung unions' strike plan amid final round of talks over bonuses

A person walks past Samsung Electronics' office in Seocho District, Seoul, Monday, when a district court partially accepted the company's injunction request to block a strike by its labor unions amid an ongoing government-arranged mediation session between labor and management. Yonhap

A district court put the brakes on Samsung Electronics unions’ plan to go on strike for 18 days starting Thursday, partially banning a labor action that would shut down production facilities as it accepted most of Samsung management’s requests on Monday.

The injunction ruling came just as the company’s labor and management resumed talks in an additional government-arranged mediation session, regarding the unions' demands for higher performance-based bonuses and the removal of a payout cap.

Although the ruling still allows the walkout, it effectively undermines the unions’ leverage by ordering them to maintain minimum operations to prevent damage to production facilities and raw materials.

In the ruling, the Suwon District Court said that the workforce must be maintained at normal levels even during a strike, in order to prevent potential damage to safety-related and other facilities, as well as the company’s products.

It also accepted management's argument that wafer preservation falls under essential work that should continue, in order to prevent damage to production facilities and the deterioration of raw materials or products.

It also restricted Samsung Electronics Labor Union (SELU), the largest of the company's three unions, from taking over company facilities or preventing workers from entering them.

To ensure the unions’ compliance, the court said each of the three unions should pay 100 million won ($66,745), along with 10 million won from Choi Seung-ho, chairman of SELU, for each day they violate these orders.

Choi Seung-ho, center, leader of Samsung Electronics Labor Union, enters a meeting room for a mediation session between labor and management at the National Labor Relations Commission in Sejong, Monday. Joint Press Corps

While industry officials view the court as having effectively ruled that strikes aimed at bringing production facilities to a standstill cannot be tolerated, the unions said the ruling does not hamper their collective action.

According to the unions, Samsung management had argued that a minimum of 7,000 employees, or about 9 percent of the chip division’s total workforce, should be maintained based on weekday staffing levels. However, the unions said the court accepted the use of weekend or holiday staffing levels, allowing the number of employees required to work to fall below 7,000.

Management, for its part, refuted the unions' claim, saying the court ruling clearly stated that the operations should be maintained with weekday-level staffing on weekdays and weekend-level staffing on weekends.

Amid the different interpretations of the ruling, the two sides resumed their mediation session five days after the previous session collapsed.

Before the session, National Labor Relations Commission (NLRC) Commissioner Park Su-keun told reporters that the session was likely to continue into Tuesday.

Given the timeframe, the talks are likely to be the final opportunity for negotiations before the planned strike begins. However, the two sides remain far apart.

On Sunday night, Choi told union members that “management’s attitude changed (from its initial stance of seeking dialogue) after the government floated the possibility of compulsory arbitration,” adding that management unofficially brought proposals worse than the ones suggested during the previous mediation session.

Yeo Myung-koo, head of Samsung Electronics Device Solutions Division's People Team and the company's top negotiator, leaves a meeting room during a mediation session between Samsung unions and management at the National Labor Relations Commission in Sejong, Monday. Joint Press Corps

On May 12, the NLRC proposed a compromise plan that would maintain the payout cap on performance bonuses while providing additional “special compensation” equivalent to 12 percent of operating profit, with the scheme to remain in place if the company achieves a similar level of business performance. The unions rejected the proposal at the time because it retained the payout cap and the amount of bonuses was lower than its demand of 15 percent.

The “worse terms” proposed by the company on Sunday would also keep the cap in place while offering bonuses equivalent to 9 to 10 percent of operating profit.

Against this backdrop, the government is stepping up its push for a settlement, signaling the potential use of compulsory arbitration.

President Lee Jae Myung wrote on X (formerly Twitter), “In the Republic of Korea, which embraces the liberal democratic basic order and a capitalist market economy, labor should be respected as much as management and management rights should be respected just as labor rights are.”

He said while the fundamental rights of all citizens are guaranteed, "they may be restricted for public welfare, as long as their essential value is not violated."

His remarks on management rights and the possibility of restricting fundamental rights are increasing the likelihood of government intervention if the ongoing mediation session also collapses.

A day earlier, Prime Minister Kim Min-seok said the government may invoke an emergency arbitration of industrial action if management and labor fail to reach a settlement and the union decides to strike, citing potential impact on the national economy.

The measure is one of the strongest tools the government can use to handle labor disputes. If a strike is deemed likely to harm the national economy or disrupt citizens’ daily lives, the labor minister can invoke the emergency measure, immediately suspending collective action for 30 days, resulting in mediation and arbitration procedures.

The country’s six major business associations also said in a joint statement that the strike could “shake the foundation of the country’s key industries,” and that “the unions should withdraw their strike plan and seek to resolve the issue through dialogue.”

As of Monday afternoon, more than 47,000 union members had expressed their intention to join the walkout. If it takes place, the 18-day strike is expected to generate up to 100 trillion won in losses.