Key facts
- South Korea's labor ministry issued new guidelines for labor negotiations.
- Profit-linked bonuses are considered voluntary, not mandatory, bargaining subjects.
- Plans for new semiconductor plants are not mandatory bargaining subjects unless they directly lead to personnel restructuring.
- The guidelines clarify South Korea's revised trade union law, effective in March.
- Samsung Electronics' union had sought to include performance bonuses and new plant plans in negotiations.
South Korea's labor ministry has issued new guidelines clarifying that demands for profit-linked bonuses and plans for new semiconductor plants cannot be mandatory subjects of collective bargaining. The guidelines aim to resolve ambiguity arising from a revised trade union law that expanded bargaining rights for subcontracted workers. Bonuses fixed to a certain percentage of a company's profit are considered voluntary subjects for negotiation, not mandatory ones, as such demands could infringe upon companies' business freedom and shareholders' rights. This clarification comes as performance bonuses have become a significant issue, particularly for South Korea's chip manufacturers benefiting from the AI-driven semiconductor boom. Samsung Electronics recently agreed to a special bonus equivalent to 10.5 percent of business performance earnings. Large-scale projects, such as Samsung's planned semiconductor plant construction, are also not mandatory bargaining subjects unless they directly lead to personnel restructuring due to relocation, due to uncertain impacts on working conditions for such long-term projects. The government had previously announced plans for a new semiconductor production base, expecting significant corporate investment.