Why are nearly 50,000 Samsung workers about to strike in South Korea?

Samsung Electronics is experiencing one of the most serious workers’ strikes in its history, with more than 48,000 workers planning to stop work for 18 days. The protest centers on bonus payments and demands abolishing a cap that limits bonuses to 50% of annual salary. The union instead wants 15% of the company’s annual operating profit allocated to bonuses. The union points to higher bonus practices at smaller companies, including SK Hynix. Samsung defends its pay scheme and says the union’s demands are unacceptable, including bonus levels for loss-making units. Government-mediated talks failed to resolve the remaining issue, and the strike is set to continue while negotiations remain ongoing.

"Samsung Electronics is facing one of the most serious workers' strikes in its history, with a protest which could affect the overall economy and the group's global supply of semiconductors. The company's workers' union has announced that more than 48,000 workers will stop work on Thursday to protest for 18 days over their bonus payments. Samsung Electronics is a major engine in South Korea's economy, producing revenues equal to about 12.5 percent of the country's gross domestic product (GDP)."

"Samsung Electronics' Union has demanded that the company abolish a cap on bonuses that currently stands at 50 percent of annual salary and instead allocate 15 percent of the company's annual operating profit to bonuses. According to local media reports, the union has highlighted other, smaller companies such as SK Hynix, a Samsung rival, which pays its workers higher bonuses. Samsung Electronics has defended its pay scheme."

"In a media statement, it said the union had made unacceptable demands which included the size of bonuses for loss-making units. The two sides held talks mediated by the government on Wednesday but were unable to reach a consensus. On Wednesday, union leader Choi Seung-ho said the union had accepted a final proposal presented by a government mediator, but the 18-day strike would go ahead as management had not come around on one remaining sticking point."

"Choi Seung-ho said, "I would like to apologise to the public for not being able to produce a good result despite making as many concessions as possible. We will not cease our efforts to reach a deal even during the strike." Samsung Electronics said that accepting the labour union's excessive demands would undermine the fundamental principles of company management."

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