Samsung Electronics' First Ever Labor Agreement in 53 Years... What Does It Include?

At the Samsung Electronics Wage Agreement Signing Ceremony held on the 10th at the Samsung Electronics Giheung Campus Nanopark. (From left) Son Woomok, Vice Chairman of the Joint Labor Union Negotiation Team, Kim Hangyeol, Chairman of the Joint Labor Union Negotiation Team, Choi Wanu, Head of HR Team, DS Division, and Shin Incheol, Samsung Electronics Negotiation Representative.

[Asia Economy Reporter Park Sun-mi] Samsung Electronics, for the first time in its 53-year history, has signed a labor-management wage agreement that includes wage increases of 7.5% and 9% for 2021 and 2022 respectively, and adjustments to wages and welfare benefits such as increasing the number of days for the ‘Holiday Consideration Allowance’ paid to employees working during the holiday period from 3 days to 4 days.

On the 10th, Samsung Electronics and the labor union joint bargaining team signed the wage agreement at the Giheung Campus Nanopark, with the attendance of Choi Wan-woo, Vice President and Head of HR at the DS Division, Shin In-cheol, Samsung Electronics’ chief negotiator (Executive Director), and the joint bargaining team leaders of the Samsung Electronics Labor Union: Kim Hang-yeol, Lee Jae-shin, Kim Sung-hoon, and Vice Chairman Son Woo-mok.

Samsung Electronics labor and management agreed to apply the company’s 2021 and 2022 wage and welfare adjustments, expand the payment of the Holiday Consideration Allowance, and compensate unused recharge leave only for 2022.

The wage increase rates are 7.5% for 2021 (basic increase rate 4.5%, average performance increase rate 3.0%) and 9% for 2022 (basic increase rate 5%, average performance increase rate 4%). The number of days for the ‘Holiday Consideration Allowance’ paid to employees working during the holiday period will also be increased from 3 days to 4 days. Additionally, the newly established ‘Recharge Leave’ of 3 days at the beginning of this year will be compensated as annual leave pay if unused, but only for this year.

Furthermore, labor and management agreed to form a ‘Labor-Management Win-Win TF’ to discuss system improvements aimed at enhancing employees’ work-life balance and job satisfaction, and to continue cooperating to establish a culture of mutual growth between labor and management.

Since October last year, Samsung Electronics labor and management held a total of 31 collective bargaining sessions, but the possibility of a strike was raised as the company did not accept the union’s demands for a uniform annual salary increase of 10 million KRW and a performance bonus payment of 25% of operating profit.

In the face of increasing uncertainty in the global business environment, labor and management plan to establish a future-oriented and progressive advanced labor-management relationship based on mutual trust through this first wage agreement. Choi Wan-woo, Vice President and Head of HR at Samsung Electronics DS Division, said, "As partners in mutual growth, we hope to draw a progressive future together through sincere communication and cooperation."