New deal includes a special performance bonus for Samsung's chip-making division
Unionised workers at Samsung Electronics have voted in favour of a new wage deal that will grant them a special performance bonus to end a months-long dispute that nearly escalated to an 18-day strike at South Korea's tech giant.
More than 70% of eligible workers from two of Samsung's biggest labour unions voted in favour of the new deal, according to local media.
From the Samsung Electronics Labour Union (SELU), 44,606 out of the 55,333 employees who participated in the poll voted in favour of the new agreement, reaching an approval rate of 80.6%.
From the National Samsung Electronics Union (NSEU), 1,536 out of 7,283 workers who participated in the poll were in favour of the new deal, equivalent to an approval rate of 21.1%.
Overall, the combined rate reached 73.7% to hit the needed numbers to get the new wage deal approved, The Korea Times reported.
SELU Chair Choi Seung-ho, in the official signing of the agreement in South Korea's Gyeonggi Province, said they believe that labour and management reached a "meaningful agreement."
"We will continue striving to improve working conditions and protect the rights and interests of Samsung Electronics employees," Choi said as quoted by The Korea Times.
Major strike averted
The approved agreement puts an end to the months-long dispute between unions and Samsung Electronics, which came close to an 18-day strike that was supposed to begin on May 21.
The strike action, which the government estimated could incur direct losses of up to KRW1 trillion in a day, was averted following a last-minute deal reached during government-mediated negotiations between unions and the Samsung management.
Voting on the new offer started on May 22, with the approval announced on May 27.
Under the deal, employees of the company's chip-making Device Solutions (DS) division will receive a special management performance bonus that will be funded with 10.5% of the tech giant's operating profit and paid out in treasury shares.
Previous local media reports also said the provisional agreement includes a 6.2% wage increase and a new housing loan programme.
In a press release, Yeo Myeong-gu, head of the DS division's People Team, thanked the labour union and employees for "not giving up on dialogue until the very end."
"Starting with the conclusion of this wage agreement, labour and management will work together as one to strengthen our global competitiveness," Yeo said in the release quoted by Yonhap News Agency.
Backlash from other workers, shareholders
The deal, however, was not met well by other unions and shareholders at Samsung.
The Korea Shareholder Action Headquarters previously claimed that the profit-linked bonus to the DS division is not legally valid because they were not passed in a shareholders' resolution.
It warned the tech giant of legal action, saying its directors could also be accused of breaching their fiduciary duties.
Meanwhile, the Samsung Electronics Company Union (SECU) also said they were planning to file a separate lawsuit to invalidate the agreement.
SECU is Samsung's third-largest labour union and represents employees from the company's Device Experience (DX) division, which makes the company's smartphones, TVs, and home appliances.
The union was initially involved during the negotiations but later pulled out due to disagreements.
Roh Tae-moon, head of the DX division, said on Wednesday that he plans to restore the division's competitiveness as he acknowledged the "sense of deprivation and disappointment" towards Samsung following the new deal, The Korea Times reported.
The wage dispute at Samsung Electronics follows the ballooning profits at the tech giant amid a spike in demand for memory chips due to widespread artificial intelligence adoption.
Samsung's latest quarterly results revealed an operating profit of KRW57.2 trillion for the period of January to March, roughly eight times the figure for the same period a year ago, and its highest-recorded profit since its founding.
