SK Hynix’s Korean workers launch unified union amid stalled wage talks
FILE PHOTO: The logo of SK Hynix is seen at its booth during The 26th Semiconductor Exhibition (SEDEX 2024) in Seoul, South Korea, October 23, 2024. REUTERS/Kim Hong-Ji/ File Photo
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SEOUL, Aug 13 : Workers at SK Hynix on Thursday launched a new labour union in South Korea, seeking to bring together employees across different job categories and locations as they pursue greater bargaining power at the leading memory chipmaker.
The launch comes as SK Hynix and its existing unions are locking horns over annual wage talks, after the chipmaker posted record quarterly profits on strong demand for AI infrastructure.
Nearly 2,500 SK Hynix workers have joined the new union, according to its website. The union was formally launched after the government approved an application. SK Hynix has nearly 35,000 employees in South Korea.
Unlike existing unions organised around particular job categories or workplaces, the new union aims to represent employees across SK Hynix’s operations, including factory workers in Icheon, Cheongju, as well as technical and office staff.
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Its immediate goal is to become a majority union by signing up more than half of the company’s workforce, which would give it greater influence in negotiations with management.
CONTROL OVER COLLECTIVE BARGAINING
The chipmaker last year agreed with its union to allocate 10 per cent of annual operating profit to employee bonuses in cash under a deal that would remain in place for 10 years.
But SK Hynix this year proposed paying a majority of workers’ bonuses in shares rather than cash, after its peer Samsung Electronics agreed on similar terms earlier this year.
Park Ji-soon, a social security law professor at Korea University’s School of Law, said the launch could trigger competition among unions for members, as becoming the majority union is key to securing control over collective bargaining.
He said a shift towards stock-based bonuses could prompt unions to seek other benefits such as housing loans comparable with those at rival Samsung Electronics.
Kim Yong-jin, a management professor at Sogang University, said while workers’ concerns over stock compensation were understandable, given the volatility of Korean stocks, equity-based bonuses were common in the United States.
Investors have also questioned whether allocating 10 per cent of operating profit to employees reduces funds available for investment or shareholder returns.
In May, Samsung Electronics and its unionised workers agreed on a deal on performance pay, averting a major strike at the chip giant that had threatened to disrupt supplies. Samsung agreed to allocate 10.5 per cent of its annual semiconductor operating profit to special bonuses for chip workers. The bonuses would be paid in company stock, with the immediate sale of over a majority of the shares to be restricted.
($1 = 1,417.7400 won)
Source: Reuters
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