Dispute deepens between Samsung Electronics labor unions

Members of Samsung Electronics Company Union and their legal representative speak to reporters before submitting an injunction request seeking a suspension of other Samsung Electronics unions' voting on a tentative wage agreement at Suwon District Court in Suwon, Gyeonggi Province, Tuesday. Yonhap

The dispute between labor unions at Samsung Electronics is deepening over a tentative wage agreement reached between management and a semiconductor union last week, with employees from the company’s device division seeking a court injunction to block the agreement from being approved through an ongoing vote.

With more than 90 percent of eligible employees having voted as of 10 a.m. Tuesday, 24 hours before the voting closes, the agreement, which allows large bonuses only for the company’s chip division employees, appears likely to pass, given that semiconductor employees account for the majority of voters. However, the outcome of the injunction request could still become a variable.

Samsung Electronics Company Union (SECU), the company’s third-largest labor union, filed the injunction request with Suwon District Court on Tuesday, asking the court to halt the voting process. The majority of SECU members are from the company’s Device Experience (DX) division, which covers mobile, home appliance and other network devices.

“The representative union turned a blind eye to the equality and voting rights of a minority labor union,” Park Jae-yong of SECU said. “SECU will fight to the end to find and secure reasonable alternatives for DX division union members who were sidelined in the tentative agreement.”

A person walks past the main gate of Samsung Electronics' headquarters in Suwon, Gyeonggi Province, Tuesday. Yonhap

The tentative agreement was signed by Samsung Electronics Labor Union (SELU), which gained bargaining rights as more than half of the company’s employees joined the union, most of whom are from the chip-making Device Solutions (DS) division. SELU, SECU and the second-largest labor union, National Samsung Electronics Union (NSEU), formed a coalition for joint negotiations, but SECU later pulled out, claiming the views of the DX division were not being reflected.

Since voting is set to close on Wednesday, it is unlikely to be halted midway, but SECU said it plans to continue pursuing a lawsuit seeking to invalidate the vote.

“This rushed agreement is a rushed outcome made by the company and the representative union, insisting that everyone follow the representative union’s decision, even if it is wrong,” Park said. “We are not demanding excessive rewards based on performance. We are simply saying there should be no unfairness within the same company.”

Depending on how the court rules on the case, Samsung Electronics’ wage negotiation process itself could face new uncertainties. However, industry officials said it appears more likely that the dispute will lead to a prolonged legal battle rather than a suspension of negotiations through an injunction, given that courts rarely fully grant such requests unless there is urgency, irreparable harm or clear and significant procedural flaws.

The dispute between the unions centers on a special management performance bonus offered exclusively for the DS division. The agreement states that the bonus will be funded with 10.5 percent of a “jointly selected business performance indicator,” which the unions later confirmed refers to operating profit.

Under this structure, employees from the memory chip business of the DS division could receive as much as 600 million won ($398,900) in bonuses this year. DX division employees, meanwhile, may receive only around 6 million won in treasury shares, due to weak business performance expected for this year.

As of Tuesday morning, 52,036 out of 57,305 eligible SELU members have cast their ballots, putting the turnout rate at 91 percent. At NSEU, 6,939 of 8,187 eligible members have voted. SECU is also separately conducting a vote on the tentative agreement through its website, though SELU said it will only count votes from SELU and NSEU members.

Meanwhile, the Suwon court dismissed a separate injunction request filed by five SELU members working in the DX division who sought the suspension of the wage and collective bargaining process.