SK hynix workers move to merge three unions into one over bonus fight

Production workers and office staff at SK hynix are moving to merge into one company-wide union after management reopened a profit-sharing deal signed only last year. The merger would end a three-union structure that has split workers' bargaining power.

More than 4,000 employees have joined a KakaoTalk group set up on Wednesday to organize the new body, industry sources said Monday. That is 11.6 percent of the chipmaker's 34,466 employees as of the end of last year. Organizers filed a registration application on Saturday and expect to complete the launch this week.

The new union will stand alone, with no ties to either of Korea's two umbrella labor federations. SK hynix has operated under a three-union structure: a technical and office workers' union under the Korean Confederation of Trade Unions, and production workers' unions at the Icheon and Cheongju campuses under the Federation of Korean Trade Unions.

An acting chair drawn from the technical and office ranks will lead the merged union, with a production worker as vice chair. Organizers will be selecting an MZ generation employee — a Korean abbreviation that combines millennials and Gen Z — for the top job. 

The choice to stay independent has a recent history behind it. The two federations argued in May that bonuses should be shared with subcontractors and suppliers as well, and the new union appears to be modeled on the Samsung Group United Union, the conglomerate's cross-affiliate body, which represents its own members and answers to no federation.

Whether the merged union can join this year's wage and collective bargaining talks, already underway, is another question.

"We are checking the facts around the union registration application," SK hynix said. "Once those are confirmed, we will respond in line with the relevant laws and procedures."

Park Han-ul, a labor attorney at the Donggam labor law firm, said the timing works against the organizers.

"If a new union launches while bargaining is already underway, it has to apply to the Labor Relations Commission to have the bargaining unit separated before it can win its own bargaining rights," labor attorney Park said. "Taking part in this year's talks will not be easy."

What pulled workers across job types together was management's proposal to overhaul how bonuses are paid. The company has offered to pay part of the bonus in its own shares, with a lock-up period barring sales, and to adjust wages temporarily in years when it posts a loss.

Labor and management agreed last year to fund the profit-sharing scheme, known inside the company as PS, with 10 percent of annual operating profit and to scrap the previous ceiling of 1,000 percent of base pay. In February, off a record operating profit of 47.2 trillion won ($33.5 billion), SK hynix paid out bonuses worth 2,964 percent of monthly base salary.

That scale has drawn steady criticism. Critics say the payouts have pushed up housing costs and other prices. Others have questioned the fairness of a system in which production workers with high school diplomas can take home hundreds of millions of won.

Chey Tae-won, chairman of SK Group and of the Korea Chamber of Commerce and Industry, gave the debate fresh weight at a press conference during the chamber's Jeju Forum on July 15.

"If our employees' happiness infringes on the happiness of other stakeholders, then for the sake of sustainable happiness, we are in a situation where we have to do something about the problem," Chey said.

The dispute has also moved outside the negotiating room. A minority shareholder group has filed criminal complaints against the chief executives of Samsung Electronics and SK hynix. The group says distributing bonuses without shareholder approval amounts to a breach of trust. Kim Jung-kwan, minister of trade, industry and resources, has said a revision to the Commercial Act requiring shareholder approval for bonus payouts is under discussion.

"Big Tech companies use restricted stock units as the base and vary the size of the award by individual," Song Jae-yong, a chair professor at Seoul National University Business School, said.

"The right direction is to raise the level of compensation itself, hand out shares according to capability and route the size and method of bonuses through the board and the shareholders' meeting."

BY KIM SU-MIN [[email protected]]