Chair of SK hynix integrated union task force gives first written interview

'Rejection of wage deal was not a judgment on whether the terms were good or bad'

'Transparency and sufficient explanation in the agreement process are needed'

'Goal is to become a majority union with bargaining rights'

SK hynix [Yonhap]
SK hynix [Yonhap]

The newly formed integrated union at SK hynix was launched in response to the company's existing unions. It has cited "insufficient information and explanation" as the key reason behind employees' rejection of a tentative wage and collective bargaining agreement. According to the union, employees were not given enough information to judge the terms of the agreement for themselves. It called this a bigger issue than the method used to calculate performance bonuses.

The integrated union is reviewing the legal implications of the existing agreement and how future collective bargaining agreements will apply. It said dialogue remains its priority, but it will consider legal action if it determines that protecting union members' rights requires it.

SK hynix employees were dissatisfied with the existing technology and clerical workers' union, which is affiliated with the Korean Confederation of Trade Unions (KCTU). They were also unhappy with the Icheon and Cheongju in-house unions, which are affiliated with the Federation of Korean Trade Unions. In August, they launched an integrated union spanning all job categories. More than 3,500 employees — about 10 percent of the company's roughly 35,000-strong workforce — reportedly joined within three days of its launch.

Earlier, SK hynix management proposed changing last year's agreement to pay performance bonuses entirely in cash, offering instead to pay 60 percent of the bonus in company shares. The company and labor added a safeguard to compensate employees in cash if the share price fell. However, the plan was rejected by a margin of 25 votes in a vote among members of the in-house unions.

In its first written interview with The Herald Business, the chair of the integrated union's task force said, "We believe this wage and collective bargaining agreement vote failed because employees were not given enough information and explanation to judge the terms for themselves." He criticized the opaque way management and the existing unions had conducted the negotiations.

"It was not so much that the bonus terms were bad, but that there was not enough explanation of why the excess profit-sharing (PS) system agreed upon last year was being changed after just one year, or what discussions took place in that process," the chair said. "During negotiations, meeting minutes and details were shared only in limited fashion, leaving members without enough information to make their own judgment," he added, pointing to the lack of transparency.

The integrated union also emerged because members felt frustrated by the lack of sufficient information. "Fighting the company is not the only job of a union," the chair said. "Helping members make their own judgments is also part of a union's role. Members' expectations of their union have risen."

The union has raised a similar issue with how performance bonuses are calculated. Under the current collective bargaining agreement, the funding basis for the PS is set at "10 percent of operating profit." However, the integrated union conducted its own analysis of the current formula. It found that calculating the 10 percent based on operating profit after PS costs are deducted would leave actual funding at only about 9.09 percent of operating profit. Assuming SK hynix's annual operating profit of 250 trillion won ($186 billion), that would create a gap of about 2.3 trillion won.

The chair of the integrated union stressed, "Management needs to transparently disclose exactly what formula is used to calculate PS funding from the '10 percent of operating profit' standard specified in the collective bargaining agreement."

The union said it broadly agrees with the direction SK hynix CEO Kwak Noh-jung emphasized at a communication event — building the future together and creating a sustainable company.

"However, to talk about sustainability, members also need to understand and accept the basis for the company's decisions," the chair said. "It matters that the company does not simply present conclusions and ask for agreement, but provides enough information for members to judge for themselves."

The integrated union did not take part in this year's process to unify bargaining channels, so it currently does not hold direct bargaining rights. As a result, rather than directly intervening in the ongoing renegotiations, it plans to focus on independently analyzing the PS formula and the collective bargaining agreement. It will then share that information with members.

The union is also calling for the company to establish formal labor-management relations. It has asked management for an introductory meeting and for office space for the union.

The union is also reviewing the legal implications of the existing PS agreement and how it will apply to future collective bargaining agreements. "Our priority is to confirm what grounds and procedures were used to change the existing agreement, and whether members were given enough information," the task force chair said. "If we determine that legal action is needed to protect members' rights, we plan to review the necessary steps."

"Our goal is to demonstrate our operating principles — disclosure of information, member participation and transparent decision-making — through actual activities, win the support of members, and become a majority union," he said. "Through that, our ultimate goal is to become the bargaining representative union and build a structure where members' opinions are directly reflected in wage and collective bargaining negotiations."

Meanwhile, SK hynix's existing in-house union said Wednesday that it had held renegotiations with management late into the night to reflect members' wishes. The talks came after the wage and collective bargaining agreement was rejected.

The union also said it "seriously discussed practical measures for our members, though some parts require additional legal and practical review." It plans to hold a special delegates' meeting on Thursday to explain the renegotiated proposal, after which it will discuss holding a new vote among members.


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