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Major Unions Demand ‘Compensation for Subcontractors’
Samsung Electronics and its union reached a tentative agreement ahead of a planned general strike, but social tensions have widened as the country’s two major labor federations and farmers’ groups press for broader profit sharing. After SK Hynix adopted a bonus model tied to a percentage of operating profit, Samsung did likewise, and subcontractor and supplier unions have intensified demands for a share of the gains.
The Korean National Farmers’ Federation (Jeonnong) issued a statement on the 22nd saying, \”Behind Samsung Electronics’ massive profits lies the blood and sweat of farmers who have been thoroughly neglected.\” It accused the company of erecting enormous transmission towers in rural, nonmetropolitan areas to power semiconductor plants serving the Seoul metropolitan region, and of prioritizing factory pipelines even when agricultural water supplies are scarce.
Building on that argument, Jeonnong called for legislation to establish a trade-gains sharing mechanism and for the introduction of an excess profits tax. The proposed trade-gains sharing system would reclaim part of the profits companies gain from free trade agreements to support industries harmed by those agreements, such as farming and fishing. Jeonnong added, \”We should not entrust the national economy to corporate goodwill; the government and the National Assembly must step in to correct this distorted concentration of wealth.\”
The Korean Confederation of Trade Unions (KCTU) and the Federation of Korean Trade Unions (FKTU) argue that Samsung’s gains should not be confined to the company’s regular employees. They say supplier and subcontracted workers who contributed to production and growth must be included in discussions on distributing performance-based pay.
In a statement released the previous day, the KCTU said, \”Samsung’s global success is not the exclusive preserve of corporate regular employees. The benefits from this agreement must lead to improved conditions for subcontracted workers and tangible returns to local communities.\”
The FKTU likewise called for concrete measures to reform the industrial ecosystem so that workers at partner firms receive a fair share of the gains.
Shareholder groups have pushed back, arguing the deal could harm shareholder interests. A Samsung shareholder organization warned it would pursue legal action over what it says is potential illegality in the tentative wage agreement.
The shareholder body Korea Shareholders’ Movement Headquarters held a rally the same day near Samsung Chairman Lee Jae-yong’s residence in Hannam-dong, Yongsan-gu, Seoul, asserting that a labor-management agreement allocating 12% of pre-tax operating profit would effectively infringe on shareholders’ claims to residual assets.
The group said it will file a suit to nullify any board resolution that ratifies and enforces the agreement and will seek a provisional injunction on the basis of preserving rights against illegal acts. It also announced plans to bring a representative derivative suit for damages against any director who voted to approve the tentative agreement, alleging a breach of fiduciary duty under the Commercial Code.
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