Samsung union asks South Korean court to block vote on pay deal

A Samsung Electronics' 005930.KS union representing the conglomerate's consumer electronics workers said on Tuesday it has asked a South Korean court to block a vote on a pay deal that primarily benefits their colleagues in the company's chip divisions.

The government-mediated agreement reached last week, which averted an 18-day strike by 48,000 workers, provides huge bonuses for workers in Samsung's memory chip division, which has seen profits soar amid the AI boom.

Voting by unionised workers began on Friday and is due to conclude on Wednesday morning.

The Samsung Electronics Co Union (SECU), which has about 13,000 members, mostly from the company's smartphone, TV and home appliances divisions, said in a statement that it had taken legal action after being told it had no right to join the vote.

Disagreements caused the SECU to leave the negotiating team before the agreement was reached.

DEBATE OVER SHARING AI RICHES

Negotiations were led by the Samsung Electronics Labor Union (SELU), which said on Tuesday that more than 90% of its 57,290 members who are eligible to vote had cast ​their ballot. How they voted was not disclosed.

Approval requires a simple majority of eligible unionised members to vote ​in favour and a majority of those members to take part. Otherwise negotiations must restart from scratch.

A separate union, the ⁠National Samsung Electronics Union (NSEU), which has also said it is upset with the terms of the deal, will boycott the vote, Yonhap news reported.

The NSEU, which represents both chip and non-chip workers, has some 20,000 members, according to its website.

Samsung accounts for about a quarter of the country's exports, and the deal has sparked much relief across South Korea. The dispute has, however, exposed deep divisions over how the spoils of the AI boom should be shared.

Some of the company's memory chip workers are set to receive total bonuses of about $416,000 this year.

Workers in Samsung's foundry and logic chip design units will receive much smaller but still substantial bonuses, while those employed in other divisions like smartphones and home appliances will receive even smaller bonuses.

A small group of individual shareholders has also announced that they will sue if the deal is ratified by union members, arguing that parts of the agreement were unlawful unless they were approved by shareholders.

Samsung's shares were up 2.7% in morning trade. They have gained nearly 9% since the deal was struck last week, though that rise has underperformed a 19% surge for rival SK Hynix 000660.KS.

-Reporting by Heejin Kim and Heekyong Yang; Editing by Ed Davies and Edwina Gibbs/Reuters