"Can't Stand This: Why Change the Promised Bonus?"... 3,500 SK hynix Employees Rally

Preparatory Group Formed for Unified Union
Official Launch Possible as Early as Next Week
Growing Opposition to Management’s Incentive Proposal

At SK hynix, efforts to establish a new integrated labor union encompassing both production and technical·administrative employees are gaining momentum.

According to industry sources on August 9, SK hynix employees have recently formed a preparatory group for the creation of an integrated union and have begun official procedures for its establishment. The preparatory group, launched on August 5, reportedly attracted more than 3,500 participants within just three days, which accounts for about 10% of SK hynix's approximately 35,000 employees. Some have even expressed intentions to withdraw from their existing unions in order to join the new integrated labor union.

The interim head of the integrated union announced on August 8, "We have submitted the union establishment application," adding, "The union is expected to be formally established as early as next week."

The push to create a new integrated union stems from conflicts surrounding SK hynix's performance-based bonuses. Currently, SK hynix operates under a multiple union system, where the technical·administrative employees' union under the Korean Confederation of Trade Unions and the full-time employees' unions for the Icheon and Cheongju plants under the Federation of Korean Trade Unions each conduct separate collective bargaining on wage and contract agreements.

Yonhap News

Last year, SK hynix management and labor agreed to abolish the cap on the profit-sharing bonus (PS), which is funded by 10% of annual operating profit, and to maintain this system for the next 10 years. Under this agreement, 80% of the PS is paid in cash in the current year, while the remaining 20% is paid on a deferred basis over two years.

However, during this year's negotiations, management reportedly proposed to adjust the performance bonus scheme to partially distribute bonuses in company stock, with restrictions on selling for a certain period. This has prompted concerns among employees about the potential variability in actual compensation due to share price fluctuations, and there is also backlash against renegotiating a performance bonus system that had already been agreed upon last year.

The interim head stated, "The foremost purpose of launching the integrated union is to ensure the complete fulfillment of last year's agreement on performance bonus payouts," expressing the intention to force management to withdraw its proposed changes to the bonus negotiations.

The government's review of modifications to the performance-based bonus scheme linked to operating profits is also a variable. On August 6, Minister of Trade, Industry, and Energy Kim Junggwan expressed his opposition to the bonus system tied to operating profit and stated that the government is discussing amendments to the Commercial Act and the Capital Market Act with relevant ministries. The Ministry of Employment and Labor is also planning to announce guidelines within this month clarifying the scope and subjects of collective bargaining between labor and management, including performance bonuses.

If the integrated union is successfully established, securing the status of the representative union through steps such as the unification of bargaining channels is expected to be key to strengthening its bargaining power.

This content was produced with the assistance of AI translation services.