Restricted processes expanded from 3 to 9; union to contest ruling but signals schedule change, cancels Wednesday rally

Employees arrive for work at the Samsung Biologics factory in Yeonsu-gu, Incheon, on the fourth day of a full union strike. [Yonhap]
Employees arrive for work at the Samsung Biologics factory in Yeonsu-gu, Incheon, on the fourth day of a full union strike. [Yonhap]

A court has expanded the number of production processes at Samsung Biologics that must continue operating during labor disputes — from three to nine — effectively blocking a three-week second strike the union had planned to begin Oct. 26. The union said it would contest the ruling but signaled it may revise the strike schedule, and it canceled a rally it had previously announced.

According to Samsung Biologics, the First Civil Division of the Seoul High Court's Incheon bench on Friday broadened the scope of processes required to operate normally during any strike period, going beyond what a lower court had ordered.

The first-instance ruling in April had barred strike action in three processes — concentration and buffer exchange, bulk filling, and buffer manufacturing and supply. The appellate court designated all nine processes requested by management as off-limits. The newly added processes include flask culture, bioreactor culture, recovery, media manufacturing and supply, chromatography and virus filtration, in addition to the three already covered.

The union said it would pursue an appeal. However, it said it was reviewing the specific schedule for the second strike, including the planned Oct. 26 start date and its duration. "A change is highly likely, but no revised schedule has been finalized," the union said in a statement Friday.

The union also canceled a rally that had been set for Wednesday. "We need members to understand the ruling and to rethink our strategy, so we have canceled the Wednesday rally and plan to replace it with a live broadcast for internal communication," it said. The union stressed, however, that it had not abandoned the strike itself. "We need a different strategy, but there has been no blanket restriction on collective action, so our plans for industrial action remain unchanged," it said.

The union had been recruiting members ahead of the second strike, and as of Friday morning, about 35 percent of members had indicated they would participate. Management said in response to the ruling that it would "continue to make efforts toward a mutually beneficial labor-management relationship."

The two sides have been in negotiations over wage increases and improvements to the personnel system but have failed to narrow their differences. Management has offered a 6.2 percent raise in base pay along with a one-time payment, while the union is demanding a 9.5 percent base pay increase, a flat payment of 3 million won ($2,220) per member and a performance bonus equal to 15 percent of operating profit.

After wage and collective bargaining talks broke down on March 23, the union staged a partial strike in late April and then a full strike from May 1 to 5 using annual leave. It has since continued a work-to-rule campaign, refusing overtime and holiday shifts. Earlier this month, the union also asked Korea Exchange and the Financial Supervisory Service to delay the company's planned rights offering, citing growing business uncertainty from the labor dispute.

Should the second strike go ahead, analysts warn it could disrupt production schedules, reduce sales and erode customer confidence.

Korea Investment & Securities said in a recent report that the five-day strike in May caused roughly 150 billion won in lost sales, and that a three-week walkout could have a significant impact on first-quarter earnings next year. The brokerage added that given the multi-year nature of CMO contracts, supply chain stability and sound labor-management relations under environmental, social and governance standards are key factors in how potential customers evaluate the company, making whether the two sides reach an agreement a critical variable through the end of October.


kacew@heraldcorp.com