Beyond the 'Performance-Pay Dispute' to a 'Union-Versus-Union Conflict': The S Electronics General Strike and the Shifting Order of Collective Bargaining

The union argued that, given the significant effect of the semiconductor business's results on the company's overall performance, the existing OPI system alone did not sufficiently reflect the DS Division's results.

In particular, it maintained the position that operating-profit-based special performance pay should be separately institutionalized and operated without a cap.

The company, by contrast, continued to maintain the position that the differences in results among business divisions and the performance-based principle had to be considered together.

In particular, it emphasized that compensating even loss-making divisions under the same standard could destabilize the operating standards of the performance-compensation system, and it proposed maintaining a payment structure differentiated by business division.

The reason this situation drew attention across the industry was connected to the characteristics of the semiconductor industry.

The semiconductor industry has a structure in which production processes operate continuously, 24 hours a day.

In particular, because a disruption in even part of a production line can affect the entire production schedule and delivery structure, it is regarded as an industry with greater ripple effects than ordinary manufacturing.

For this reason, when the possibility of an S Electronics general strike became real, tension also grew within the industry over the possibility of production disruptions and an expansion of supply-chain risk.

In particular, because the semiconductor industry has a structure with a high dependence on the continuity of production processes and on the global supply chain, the mere possibility of a general strike caused market tension to expand rapidly.

Analyses continued to suggest that, amid intensifying competition in AI semiconductors, the materialization of concerns over production disruptions could affect transaction structures with major customers and the investment market, and assessments have emerged that this industrial impact also played a part in the background to the active participation of the Ministry of Employment and Labor and the National Labor Relations Commission in the mediation process.

As the possibility of a general strike became real, the government also joined in the mediation.

In particular, concerns grew that, given the nature of the semiconductor industry, disruptions to production could affect the supply chain and the investment market, and a tentative agreement was subsequently reached after further negotiations.

Under the mediation of the Ministry of Employment and Labor, further bargaining took place, and labor and management prepared a tentative agreement that included a special management performance pay structure.

Assessments emerged that, because this agreement included a reorganization of the DS Division's performance-pay system and a method of payment in treasury shares, a compensation structure centered on the semiconductor business division had been reflected in earnest.

Key Details of the Tentative Agreement

The issue of compensation differences among business divisions, however, subsequently led to a union-versus-union conflict.

The union centered on the DX Division argued that its members could participate in the vote even after withdrawing from the joint bargaining body, and it announced plans to file an application for a provisional injunction to halt the vote and to pursue a lawsuit to void the vote.

The representative union, by contrast, maintained the position that a union that had withdrawn from the joint bargaining body had no authority to vote on the tentative agreement.

Accordingly, the conflict expanded beyond the issue of performance-pay distribution to the scope of the representative bargaining union's authority and the issue of the minority union's participation.

In fact, members of the DX Division went so far as to file an application for a provisional injunction to halt bargaining against the supra-enterprise union, taking legal action.

The court, however, found it difficult to conclude that a material defect in the bargaining demand itself had been sufficiently established, and it dismissed the application for a provisional injunction.

That is, it also took into account such factors as the fact that some procedures for ascertaining the members' opinions had been carried out during the bargaining process.

Accordingly, in this situation, the issue of the 'duty of fair representation,' which recurs at workplaces with multiple labor unions, is again being mentioned.

In particular, where a compensation system and bargaining structure centered on a particular business division lead to a controversy over fairness, whether the representative bargaining union has sufficiently reflected the interests of other unions and members is becoming a key point of dispute.

In fact, in this case as well, as the difference in compensation systems between the DS and DX Divisions has become intertwined with the issue of voting rights on the tentative agreement, the scope of the representative bargaining union's authority and the issue of the minority union's participation continue to be discussed.

Recently, as discussion of the amendment to the Trade Union and Labor Relations Adjustment Act, the so-called 'Yellow Envelope Act,' continues, the scope of corporate labor-relations risk management is also gradually widening.

In particular, the issues of expanding the scope of who qualifies as an employer and limiting damages claims are being cited as key points of dispute in the manufacturing and subcontracting-structure industries.

Managing records of the bargaining process and reorganizing decision-making procedures, reviewing the possibility of clashes of interest among business divisions and job categories, and establishing a system for responding to production and supply-chain issues when industrial action occurs are also becoming subjects for review.

Therefore, from the company's standpoint, rather than responding only to collective bargaining itself, it is necessary to establish a comprehensive labor-relations risk-response system that also takes into account the structure of having multiple labor unions, the compensation systems by business division, and the internal decision-making process.