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Samsung SVC president Choi Woo-soo and Korean Metal Workers’ Union (KMWU) Samsung SVC chapter president Na Du-sik shake hands after signing an agreement at the Seoul Garden Hotel on Apr. 17 to convert around 8,0000 subcontractor workers at 90 partner companies to direct employment by Samsung SVC. (provided by Samsung SVC)
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8,000 irregular workers at partner companies will be converted to regular employee status
Samsung Electronics subsidiary Samsung Electronics Service (Samsung SVC) plans to convert around 8,000 indirectly employed irregular workers at partner companies to directly employed regular worker status. With the company also pledging guarantees on lawful union activity, many are now watching to see whether this spells changes for the “no union” policy maintained at Samsung over the 80 years since its establishment. Meeting at the Seoul Garden Hotel on Apr. 17, Samsung SVC president Choi Woo-soo and Korean Metal Workers’ Union (KMWU) Samsung SVC chapter leader Na Du-sik signed an agreement on the conversion of indirectly employed subcontractor workers to direct employment by Samsung SVC. Samsung SVC is a Samsung subsidiary providing repair and maintenance services for appliances produced and sold by Samsung Electronics, which owns a 99.33% stake. The workers being hired directly by Samsung Electronics represent around 8,000 employees at 90 or so partner companies working with Samsung SVC – the largest number of irregular workers converted to regular status at a major corporation since E-mart in 2013 (10,000 employees). While other major corporations like Hyundai Motor, SK, and LG have converted indirectly employed workers to direct employment status at the headquarters or an affiliate in the past, Samsung – which ranks first in the South Korean business world – has maintained their indirect status. In the agreement on Apr. 17, Samsung SVC announced its plans to “guarantee lawful union activities going ahead,” adding that labor and management both planned to “resolve their conflicted relationship and work in a future-oriented way for the development of the company.” It was the first example of union activity being officially guaranteed for a Samsung affiliate or subsidiary since the company was founded in 1938. An investigation by prosecutors appears to have had a major impact on Samsung’s pledge to guarantee “lawful union activity” in addition to direct employment of the workers. Analyzing an external hard drive confiscated from an employee with the Samsung Electronics human resources team, prosecutors obtained 6,000 documents on “union-busting operations,” ramping up the speed of the investigation into charges that Samsung made continued efforts to destroy unions while directly managing Samsung SVC workers according to a “master plan.” Bribery case against Lee Jae-yong likely impacted Samsung’s decision With evidence emerging that key figures in the Future Strategy Office, the group’s control tower, were involved in the process, the situation is one where the company’s de facto leader, Samsung Electronics vice president Lee Jae-yong, could once again face a prosecutors’ investigation. Indeed, Samsung was reported to have proposed dialogue with the Samsung SVC chapter soon after the prosecutors’ investigation heating up, with the surprise agreement reached four days later in lieu of that dialogue. Analysts suggested the threat of the situation negatively impacting Lee’s Supreme Court appeal in connection with bribery charges may have been a factor. Some business analysts have also suggested a decision may have been made by Lee. While the subsidiary managers were officially the actors in the agreement, they are seen as unlikely to have made a decision on their own without approval from the Samsung Electronics top brass. Lee Jae-yong is a registered director for Samsung Electronics. “While Lee Jae-yong probably did not take a leading role in this case, it happened the way it did because he at the very least agreed to it or didn’t oppose it,” a Samsung Electronics source said. In addition to the Samsung SVC chapter of KMWU, three democratic unions are currently operating within the Samsung Group: the Samsung chapter (Samsung C&T Union) and Samsung Welstory chapter of KMWU and the Samsung S1 union. Samsung now finds itself in a situation where it will be hard-pressed to apply a different standard from the current agreement to the “lawful” activities of the other unions. “If the Samsung SVC chapter establishes greater solidarity with the other democratic unions as the largest of them, we may soon see the day when a democratic union is created at Samsung Electronics,” a member of the KMWU said. But many observers advised waiting a bit longer to see whether there are any fundamental changes to Samsung’s “no union” policy. “The latest agreement feels a lot like a way of ‘avoiding the storm’ with the prosecutors’ investigation and trial. Now that some cracks have emerged in the ‘no union’ policy, we’re going to have to watch for any fundamental changes in Samsung’s response to future union establishment and activity,” the member said. By Kwack Jung-soo, business correspondent, Park Tae-woo and Choi Hyun-june, staff reporters Please direct questions or comments to [english@hani.co.kr]
