Samsung has won an injunction partially blocking a planned strike by its South Korean workers later this week. However, it may not completely prevent all industrial action, with up to 50,000 Samsung employees poised to walk off the job this Thursday. If it goes ahead, it will be the largest strike in the tech company's history.
The dispute fuelling the planned workers' action primarily concerns bonuses. As reported by Yonhap, South Korea's state news agency, the union has requested that Samsung set aside 15 percent of operating profits for performance-based bonuses, as well as remove the cap on such payouts and commit to a fixed formula for calculating them. Samsung has reportedly offered to allocate 10 percent of operating profits for bonuses instead, as well as issue a one-time special compensation package.
Initial talks collapsed last week after Samsung and the union were unable to reach an agreement, according to Reuters. Last-minute negotiations were resumed on Monday, which were facilitated by the South Korean government. Unless an agreement is reached, Samsung's unionised workers are set to go on an 18-day strike beginning on May 21.
However, a new injunction will restrict what the workers can do as part of the strike. As Yonhap reports, Suwon District Court ordered on Monday that Samsung's unionised workers cannot take over the company's facilities or disrupt other workers. Normal staffing levels must also be maintained where matters of safety and security are involved, the news agency reported, such as when maintenance work is required to prevent equipment damage.
It's currently unclear exactly how this will impact Samsung employees' strike plans. However, while the injunction may have tempered the threat of industrial action, it doesn't appear to have completely stopped it.
South Korean government works to prevent Samsung strike
The Samsung strike is of significant concern to the South Korean government. Samsung accounted for over 13 percent of South Korea's GDP in 2024, according to the country's Edaily media group, and is its largest employer with over 125,000 employees. The planned industrial action is anticipated to involve over a third of this massive workforce, and could have a significant impact on South Korea's economy.
"Just one day of suspension at Samsung Electronics' semiconductor factory is expected to incur direct losses of as much as 1 trillion won [approximately $US667 million]," Prime Minister Kim Min-seok said on Sunday, as reported by the South China Morning Post. "What is more concerning is that a temporary pause on semiconductor manufacturing lines leads to months of inactivity."
Kim further stated that if Samsung and the union are unable to come to an agreement, the government will consider issuing an emergency arbitration order under South Korean law. Per The Korea Times, this enables the labor ministry to suspend any strike action for up to 30 days if it "it is deemed likely to seriously harm the national economy or disrupt the daily lives of citizens."
South Korean President Lee Jae Myung also addressed the issue, taking to social media on Monday.
"Workers must be able to receive fair compensation for their labor in return for providing their services, and shareholders who bear risks and losses through their investments share in the company's profits," Lee wrote on X, translated by the platform. He later added, "Under the current Constitution, the fundamental rights of all citizens are guaranteed, but they may be restricted within the scope that does not infringe on their essential content for the sake of public welfare and other reasons."
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Samsung recently announced that its operating profit for Q1 this year was ₩57.2 trillion (approximately $US38.1 billion), an "all-time high" driven by the boom in demand for AI chips. This is a significant increase compared to the same quarter last year, when Samsung reported an operating profit of ₩6.7 trillion (approximately $US4.4 billion).