An SK hynix advertisement is displayed on the exterior of a building in New York on Monday, the first day of the company's NASDAQ listing. [Reuters]
An SK hynix advertisement is displayed on the exterior of a building in New York on Monday, the first day of the company's NASDAQ listing. [Reuters]

Labor tensions over performance bonuses are emerging at SK hynix, following similar strains at Samsung Electronics. After management proposed paying a substantial portion of bonuses in shares rather than cash — departing from an earlier agreement — workers at SK hynix formed a new unified union spanning both production and technical-office staff, separate from existing unions.

If management unilaterally alters the existing labor-management agreement, the union could pursue legal action, and a clear violation of the collective bargaining agreement could escalate into full industrial action.

With both of South Korea's top two semiconductor companies facing mounting tensions over performance pay and union activity, labor risk in the semiconductor industry appears to be growing.

According to industry sources Thursday, workers at SK hynix have been organizing a unified union in response to management's recent proposal to pay bonuses in shares. The union's preparatory committee filed for official registration on Saturday, and membership had already exceeded about 1,800 as of that day — roughly 10 percent of the approximately 18,000 members needed to achieve majority-union status.

The unified union is also exploring potential solidarity with Samsung Electronics' inter-enterprise union, having sought advice from that group. Choi Seung-ho, chair of the Samsung Electronics chapter of the inter-enterprise union, said the group plans to consider issuing joint statements on major issues, noting that the SK hynix Cheongju union had provided assistance last year.

Should labor disputes over performance bonuses intensify simultaneously at both Samsung Electronics and SK hynix, South Korea's two largest semiconductor firms would face an unprecedented situation of confronting union challenges at the same time.

SK hynix currently operates under a multiple-union structure, with three separate unions — covering production workers in Icheon and Cheongju, and technical-office staff — each bargaining independently with management. The production unions in Icheon and Cheongju have traditionally decided tentative wage agreements through delegate votes. Last year, labor and management agreed to scrap the 1,000 percent cap on performance bonuses and instead pay out 10 percent of annual operating profit in cash each year for 10 years.

Discontent surged, however, after management recently proposed paying more than half of the performance bonus in shares subject to a lock-up period rather than in cash. A plan to temporarily adjust wages in the event of a loss was also reportedly discussed alongside the proposal.

Strong dissatisfaction has spread among employees, with many calling on existing unions to push back more forcefully against management's proposal. That pressure fueled the drive to form a unified union that would consolidate members across job categories and worksites to strengthen collective bargaining power.

The unified union task force said it would use legal procedures to block any attempt to convert the profit-sharing scheme — agreed upon as a long-term arrangement — into stock payments, arguing that such a change would constitute an unfavorable amendment to employment rules requiring collective consent under the Labor Standards Act.

The task force added that its top priority is to build a majority union by uniting members across job categories and regions. It said it aims to create a union where all members hold equal voting rights and make decisions directly, rather than through a delegate-centered system.

The group particularly emphasized that the new union would be 100 percent independent, unaffiliated with any umbrella organization such as the Korean Confederation of Trade Unions (KCTU) or the Federation of Korean Trade Unions. The existing Icheon and Cheongju production unions are affiliated with the Federation of Korean Trade Unions, while the technical-office union belongs to the KCTU. The task force also included a provision explicitly banning political activity, allowing the immediate removal of any union chair or executive who uses the union's name for political purposes.

Employees have also expressed frustration over a lack of transparency in the existing unions' negotiation processes. In response, the unified union task force said it would disclose negotiation proceedings and meeting minutes on the day they occur, including specific figures.

However, it remains unclear whether the unified union, once formally launched, will be able to participate directly in this year's wage and collective bargaining negotiations. Without securing more than approximately 18,000 members to achieve majority-union status, joining the ongoing talks would be difficult.

Even if direct participation proves impossible, the unified union plans to exert influence over this year's negotiations by observing bargaining sessions, demanding disclosure of progress and conveying members' views to the table. It is also considering organizing a petition drive among employees opposed to the management proposal.

If management unilaterally changes or fails to honor last year's labor-management agreement, the union could request an interpretation ruling from the Labor Relations Commission or seek a court order for compliance. Legal liability could also be pursued if agreed terms on wages and performance bonuses under the collective bargaining agreement are clearly not upheld.

Starting this year, the Yellow Envelope Act also brings clear violations of collective bargaining agreements by employers within the scope of labor disputes, meaning unions can proceed to industrial action after following the relevant procedures.


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