South Korea’s industrial sector is facing renewed labor uncertainty as unions raise pressure even after companies expanded bonuses and steps aimed at job stability, including more conversions to regular employment, industry officials said.
According to the business community on Tuesday, the Samsung Electronics labor union’s joint struggle headquarters will hold a large rally Wednesday with about 37,000 participants. The gathering is widely seen as a show of force ahead of any strike action. The union’s key demand is the removal of the cap on performance bonuses. Samsung Electronics currently pays performance bonuses based on business division results but sets an upper limit; the union is calling for that limit to be abolished, effectively seeking unlimited performance-linked compensation. With the semiconductor market highly volatile, the demand could increase the company’s burden by making the compensation structure more rigid on the downside.
Unions at Hyundai Motor Group are taking a similar approach. Hyundai Motor paid record compensation last year, including performance bonuses of about 500% of base pay and encouragement payments in the tens of millions of won. The union has additionally put a demand for a “30% of net profit” performance bonus on the wage and collective bargaining agenda. Industry voices warn that tying bonuses to a fixed share of profit could reduce funds available for investment.
Efforts to improve cooperation between prime contractors and subcontractors are also encountering friction. POSCO and HD Hyundai have been strengthening measures such as converting partner-company workers to regular employment and improving treatment. But at worksites, additional demands from subcontractor unions and pushback from existing regular-employee unions are mixing, with signs of union-on-union conflict. Analysts say measures intended to promote shared growth are expanding into broader demands to reshape employment structures, creating new fault lines.
The trend is adding to pressure as external conditions remain uncertain, with energy price instability linked to rising tensions in the Middle East and continued pressure from global supply-chain restructuring. Industry officials are increasingly wary that labor risk could go beyond higher costs and weaken core competitiveness.
A business community official said that “even when companies accept demands such as bigger bonuses or regularization, a pattern of repeated additional demands is taking hold,” adding that negotiations are “turning into an upward competition to keep raising demands rather than labor-management talks.”
Experts say that if short-term, results-focused demands are repeated in an environment of weak trust between labor and management, sustainability across industry could be damaged. They also warn that if internal conflict drags on as global competition intensifies, both companies and workers could end up worse off.
Kim Dae-jong, a professor of business administration at Sejong University, said that considering that major industries have been sustained in part through national support, “excessive expansion of performance bonuses demanded by unions in semiconductors or autos is unlikely to win broad public sympathy.” He said balance is needed between bonuses and future investment because “jobs can be maintained only if companies continue to invest.”
He added, “Employment and wages can be maintained only if companies keep growing,” and said he hopes recent wage-negotiation disputes at several companies will be resolved in a mutually beneficial direction.
* This article has been translated by AI.
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