Samsung strike court ruling released! It ordered unions not to interfere with production capacity; violators will be fined 100 million won per day

Samsung Electronics has recently seen its labor-management negotiations break down, and the union has vowed to launch an 18-day all-out strike involving up to 50,000 participants this Thursday. Because Samsung memory chips account for one quarter of South Korea’s exports, the South Korean government has urgently stepped in to mediate. On 5/18, the court ruled in favor of Samsung Electronics’ request for an injunction against what the union termed an illegal strike, and imposed steep daily fines on the union. After the ruling was issued, Samsung’s stock price rose by about 6.7% at one point in early trading.

（Labor-management profit-sharing talks stall! Samsung union plans a major strike; JPMorgan: revenue could evaporate by 4 trillion KRW）

No consensus between labor and management on performance bonus system

According to a report by Bloomberg, the core of this labor dispute lies in the performance bonus system. The union is firm in its stance, demanding the removal of the existing performance bonus cap of “50% of annual salary,” and arguing that “allocating 15% of operating profit as the source of performance bonuses” be formally written into the provisions of the collective bargaining agreement.

The company said that if operations achieve the goal of being “No. 1 in the industry,” it is willing to pay the highest salary level beyond competitors. However, on the point of “removing the performance bonus cap,” it would not yield an inch, causing the previous first round of government mediation to end in failure.

South Korean court issues a provisional injunction ruling! Restricts strikes from affecting production lines

With urgent government intervention, the court granted Samsung Electronics’ request for an injunction against the union’s strike and explicitly ordered that the strike action must not cause damage to production inputs, while also maintaining the same production volume and yield levels as in the past. If the union violates the rules, the union will face a daily fine of 100 million KRW (about $72,000). Union leaders personally will also face a daily penalty of 10 million KRW. Samsung’s official statement and the union have not commented on this so far. Samsung Electronics’ stock price surged in early trading today, once up about 6.7%, driven by the granting of the injunction.

South Korean President Lee Jae-myung: corporate management rights should be respected

South Korean government officials have warned that strikes could pose significant risks to economic growth, exports, and financial markets. President Lee Jae-myung also posted on X today, saying that companies’ management rights should be respected to the same extent as workers’ rights and calling on labor and management to seek consensus on a rational basis. With government intervention, will this labor-rights action—one that threatens the nation’s economic lifeblood—continue without violating the court ruling? Global investors are closely watching.

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