Strike Against Samsung, Court Ready to Limit It. Government Also Prepared to Intervene

Samsung is at the center of one of the most delicate labor disputes in recent years in South Korea. Unionized workers are threatening an 18-day strike, from May 21 to June 7, to achieve a significant change in the company performance-related bonus system.

The main demand is the allocation of bonuses equal to 15% of the company’s annual operating profit, an amount estimated at about $30 billion. The union also demands the removal of the cap on bonuses and the introduction of clearer and more formalized rules for calculating variable compensation. Samsung's management has proposed a less generous solution, offering to allocate 10% of operating profit to bonuses and adding one-off extraordinary allowances.

Negotiations have stalled, increasing the risk of mobilization that could involve over 47,000 employees. However, a South Korean court has issued a partial injunction limiting union action. If the order is not complied with, the union would have to pay a penalty of 100 million won per day, equivalent to about $66,500. Following this decision, the parties resumed negotiations.

The Government's Position on the Samsung Issue
The South Korean government has taken a very clear stance. President Lee Jae Myung has called for the protection of both workers' and corporate rights, emphasizing that excesses can produce effects contrary to everyone's interests. Prime Minister Kim Min-seok has stated that the executive is ready to use the "Emergency Arbitration Authority," a tool that allows for the legal suspension of a strike for up to 30 days if there is a risk of severe economic damage. Finance Minister Koo Yun Cheol has also urged to avoid the protest at all costs. Concerns are linked to Samsung's central role in the national economy. The company accounts for 22.8% of South Korea's exports, 26% of the market capitalization, and generates revenues equivalent to 12.5% of GDP. Authorities estimate direct losses of up to 1,000 billion won, with possible damages of up to 100,000 billion in the event of disruptions in semiconductor production. Analysts also warn that a strike could aggravate global tensions in the supply of DRAM and NAND memories, which are already characterized by limited stocks and significant price increases.