Samsung Electronics and SK Hynix Fail to Reach Labor Agreement Before Chuseok... Divergent Union Risks in Jeoncha

Samsung Electronics Begins Procedure to Unify Negotiating Unions
Jeonsamno and Others Express Negotiation Intent... Coordination Underway
SK Hynix to Renegotiate with All Employee Unions
Preliminary Agreement Rejected with 144 Votes Against

Samsung Electronics and SK Hynix, both competing in the global semiconductor market, have failed to finalize their wage collective bargaining agreements (CBAs) before the Chuseok holiday. This contrasts with the automotive industry, including Kia, which has relatively quickly resolved 'union risks' by reaching CBA agreements without disputes for four consecutive years. The fortunes of the two leading sectors driving the domestic industry, electronics and automobiles, are diverging.

According to industry sources on the 14th, Samsung Electronics began a procedure on the 12th to unify the four labor unions that will negotiate with management. This process will continue for two weeks. Samsung Electronics has four unions: the National Samsung Electronics Labor Union (Jeonsamno), Samsung Electronics Union Donghaeng (Donghaeng Union), Gumi Network Union, and Samsung Group Super-Enterprise Union Samsung Electronics Branch (DX Union). The office workers' union was previously prioritized as the 'No. 1 union,' but it was absorbed and merged into Jeonsamno last month, reducing the number of unions by one. Since Jeonsamno, which holds the representative bargaining rights, failed to reach an agreement with management over the past year from August last year to last month, other unions have also been able to demand bargaining rights. All four unions recently expressed their desire to negotiate with management through an internal announcement.

The situation has reached a point where the four unions must come together to unify, but it is reported that difficulties have arisen from the start. Some unions raised issues regarding the previous Jeonsamno negotiation process, cooling the atmosphere. Donghaeng Union criticized Jeonsamno's general strike behavior in an email sent to employees on July 26. Donghaeng Union stated, "The negotiations through the general strike by the representative labor union we expected have entered a path of sharp confrontation with the company, making it impossible to expect a reasonable outcome," and added, "The unseen power of the militant union will only hold us back and cause disappointment in the future." Jeonsamno tried to strengthen its negotiating power through cooperation with the Gumi Network Union in mid-last month, but this was rejected by the Gumi Network Union, causing the effort to fail. Due to these circumstances, it is unclear when the union that will negotiate with management will be confirmed. Some predict that if delayed, proper negotiations with management may only be possible by the end of October. An industry insider described the current atmosphere among Samsung Electronics unions as "floating."

SK Hynix Headquarters, Icheon-si, Gyeonggi-do [Image source=Yonhap News]

SK Hynix has yet to complete wage negotiations with the technical full-time (production) union. Initially, the company reached a tentative agreement with this union on a 5.7% wage increase for this year and expanded medical expense support limits, but the agreement failed to pass the union members' vote. Union members voted 144 against and 60 in favor. In particular, union members reportedly opposed the agreement because it did not include their demand to change the current three-shift, two-group work system to a four-shift, two-group system. The production unions within SK Hynix are divided between Icheon and Cheongju, and both negotiate CBAs annually under the name 'full-time union.'

However, another union, the 'technical office workers' union,' reached a final agreement just before the Chuseok holiday on the 11th. SK Hynix plans to discuss the details of the tentative agreement with the full-time union later.