Samsung Biologics union asks Samsung Electronics to bargain as its employer under Korea's new labor law

The union's first collective bargaining demand to Samsung Electronics, sent on Tuesday ^[1], went to a company that is only the drugmaker's second-largest shareholder ^[19]. The union argues that the chipmaker's influence over personnel and pay policies makes it an employer under Korean labor law ^[9]. The Yellow Envelope act turns on control over working conditions ^[10], so the case rests on who writes the evaluation and pay rules, and the size of the stake matters less. The two newspapers covering the request do not even agree on it: 30.92% in the Korea Herald, 31.22% in the JoongAng Daily ^[19][20].

The union drew its list to fit that test. It said it confined its demands to matters where it believes Samsung Electronics holds actual employer authority ^[3], and the Korea Herald lists them as evaluations, performance-linked compensation, promotions and the rules governing personnel and reward systems ^[2]. The union has bargained alone since its members left the Samsung Group United Union, the group's cross-affiliate union, in June ^[13].

The strike cost falls on Samsung Biologics. The company estimated that the May 1-5 walkout cost about 150 billion won, roughly a quarter of its second-quarter operating profit ^[12]. That works out to 30 billion won a day ^[15], and it implies quarterly operating profit of around 600 billion won ^[16]. At the same daily rate, the three-week strike planned from Oct. 26 ^[7] would cost about 630 billion won ^[17], slightly more than one quarter's operating profit ^[18]. The estimate assumes the May rate holds for 21 days. It also leaves out the work-to-rule campaign of refused overtime and holiday work that has run since the May walkout ^[8]. This month the company is marketing its contract manufacturing capacity at CPHI Milan, Bio Japan and World ADC San Diego, the last running Oct. 12 to 15 ^[14].

"We are reviewing the matter and have no official position at this point," Samsung Electronics said ^[11]. If it names negotiators and attends the proposed Oct. 14 meeting ^[4], it concedes part of the employer question just by sitting down. Letting Monday's deadline pass sends the union to the National Labor Relations Commission, where a finding of employer status could bring a corrective order ^[5]. The third outcome is a wage deal at Samsung Biologics before Oct. 26 that makes the parent claim less pressing, though three rounds of post-mediation talks have already failed ^[6].

I think the request changes little about the October strike, which grew out of the subsidiary's own wage talks ^[6][7]. The longer exposure is the ruling. A commission finding that a roughly 31% shareholder is the employer for personnel rules it sets would be an early reading of a law in force only since March ^[10]. Unions at other affiliates whose pay systems are designed by a parent would then have a ruling to cite. This view is wrong if Samsung Electronics turns up on Oct. 14 and the strike is called off, because the parent claim would then have moved the subsidiary's wage talks.