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The Economic Times
The Economic Times

Samsung minority union challenges bonus deal in court

A labour union representing several thousand Samsung Electronics employees asked a court on Tuesday to nullify a bonus agreement between the South Korean tech giant and its largest union.

Samsung has emerged as a key player in the fast-evolving artificial intelligence industry thanks to its highly advanced memory chips.

The company has recently concluded high-stakes negotiations with its largest union over a bonus wage deal, averting a major strike that had raised concerns about the potential impact on the national economy.

Under the agreement, around 78,000 employees of the chip division -- out of the company's 125,000 domestic workforce -- are eligible to receive a bonus of roughly $330,000 this year, based on estimates of annual operating profit.

But the deal has left many in non-chip divisions disgruntled, as they are expected to receive significantly lower benefits, worth around $4,000.

The minority union with around 13,000 members had initially filed an injunction seeking to halt a vote among employees to approve the deal, which concluded last week.

Following its approval, "we have amended an injunction application, requesting the suspension of the effectiveness of the tentative agreement," a lawyer representing the minority union said in a message to AFP.

Frenzied demand for memory chips powering AI data centres has turbocharged Samsung's earnings.

The firm said in April that first-quarter operating profit surged roughly 750 percent year-on-year, while its market value topped $1 trillion for the first time this month.

Under the union's 10-year deal -- tied to ambitious performance targets -- annual bonuses for employees in the semiconductor division would amount to 10.5% of their segment's operating profit.

The bonuses will be paid in shares alongside an additional 1.5% in cash.

The Samsung agreement has fuelled labour demands across South Korea, with workers in sectors ranging from biotech and autos to shipbuilding asking for a larger share of corporate profits through bonuses.

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