Labor and Management Hold 10th Wage Negotiation in Icheon
Management: "Reset Possible, Let's Discuss Further"
Union Insists on "Full 10% of Operating Profit as Bonus"
Discussions on New PS Criteria Continue
The labor union, which has been negotiating this year's wage agreement with SK Hynix management, has officially declared a breakdown in the talks. Despite the management presenting additional proposals regarding improved criteria for the Profit Sharing (PS) system and the scale of the excess payment limit, the two sides failed to narrow their differences.
According to industry sources on July 29, the SK Hynix union and management held the '10th Wage Negotiation for 2025' at the Icheon campus the previous day.
The PS is an incentive paid once a year, up to a maximum of 50% of the annual salary (1,000% of the base salary), depending on annual performance. Since 2021, SK Hynix has used 10% of the previous year's operating profit as the fund for PS, distributing it to employees based on individual performance and other factors.
Last year, SK Hynix achieved its highest-ever performance (operating profit of 23.4673 trillion won), and at the beginning of this year, paid out a PS of 1,500% of the base salary and 30 shares of company stock as an encouragement bonus. However, the union and employees argued that a higher level of special performance bonus should have been paid, leading to conflict. As a result, in this year's wage negotiations, management and the union are discussing not only the wage increase rate but also new criteria for the PS system.
In the latest round of negotiations, management presented a further improved PS proposal under the principle of performance-based compensation corresponding to results and achievements. They proposed that the annual payment limit within 10% of operating profit could be reset, and suggested that the scale and method of payment for any excess beyond the limit should be discussed further. Previously, in the 8th round of negotiations last month, management proposed raising the upper limit for PS from the existing 1,000% to 1,700%, and suggested that 50% of any remaining funds from the 10% of operating profit, after paying 1,700%, could be used as additional PS for employees. In the 10th round, management indicated flexibility and did not insist on the previous proposal, leaving room for adjustments.
However, the union reportedly maintained its position that the entire 10% of operating profit should be paid as a performance bonus, resulting in continued disagreement. As both sides failed to reach a compromise, the negotiations ended in a breakdown. In a statement, the union said, "The company did not back down even a single step from the previously proposed low wage increase and performance bonus criteria," adding, "There was no willingness to adjust or make any effort to compromise." The union continued, "With the conclusion of the 10th main negotiation, we officially declare the breakdown of the 2025 wage negotiations. From now on, we will enter the final phase of a strong struggle, mobilizing all means and methods available."
Management stated, "Despite the company's flexible change in position, we regret that the union unilaterally declared a breakdown in negotiations," and added, "As promised to employees at the beginning of the year, we will continue discussions on new PS criteria."
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