English translation of the original Korean report. Images and source documents may contain Korean text.

Union Demands 15% of Operating Profit for Bonuses…Vote on FKTU Affiliation Runs Through the 18th

Samsung Biologics (President and CEO John Rim), which posted more than KRW 2 trillion in operating profit last year, has restricted striking workers’ access to work facilities and use of the company cafeteria while remaining unable to resolve a dispute with its labor union over profit sharing.

The union has begun voting on affiliation with a higher-level labor organization, while the Federation of Korean Trade Unions (FKTU) has warned the company not to interfere in the vote.

According to the Financial Supervisory Service’s Data Analysis, Retrieval and Transfer System (DART) and the FKTU on the 12th, Samsung Biologics recorded an all-time high operating profit of KRW 2.0692 trillion last year, up 56.6% from a year earlier. The company also earned KRW 1.8073 trillion in operating profit through the third quarter of this year and, on the 21st of last month, raised its annual revenue forecast from KRW 5.32 trillion to KRW 5.4684 trillion.

Negotiations over wages and a collective bargaining agreement have continued into the new year. The union is demanding that 15% of operating profit be allocated to a bonus fund, while the company has proposed a 6.2% increase in base pay and a lump-sum payment. Improvements to the personnel management system are also at issue.

Average annual pay per employee rose 6.5% last year, from KRW 107 million to KRW 114 million. That increase is substantially lower than the 56.6% growth in operating profit over the same period.

■ Striking Workers Face Access and Cafeteria Restrictions…Union Holds Vote on FKTU Affiliation

The union has been conducting partial strikes since the 6th and plans to continue through the 27th. On the 9th, the company notified strike participants that their access to work systems and facilities, as well as their use of the company cafeteria, would be restricted during periods when they were not providing labor.

The company explained that the measures were intended to protect workplace safety and the working environment of employees performing their regular duties. The union objected, alleging that the company had notified striking members to appear before a disciplinary committee and had blocked union officials from entering work buildings.

On May 1, the company estimated that the first strike had caused approximately KRW 150 billion in losses by halting production of certain batches (individual production runs), including cancer treatments and HIV medications. That same month, the company filed police complaints against six people, including union executives, alleging that the strike had taken place in production processes where industrial action was prohibited.

However, in its amended securities registration statement for the rights offering dated October 22, the company did not separately specify the amount of the losses and said it did not expect a material impact on annual production capacity or business continuity. Third-quarter revenue rose 18.5% year on year to KRW 1.4903 trillion. In a report issued on the 22nd, Daishin Securities assessed that the company had delivered solid results despite strike-related revenue disruptions, with its existing Plants 1 through 4 operating at full capacity.

The union will hold an online general meeting on the 13th and conduct a vote for or against affiliation with the FKTU until the morning of the 18th. In a commentary issued on the 12th, the FKTU warned that company interference in the vote or obstruction of the affiliation could constitute an unfair labor practice under the Trade Union and Labor Relations Adjustment Act.

Samsung Biologics’ largest shareholder is Samsung C&T Corporation, which holds a 43.06% stake, while Samsung C&T’s largest shareholder is Samsung Electronics Chairman Jay Y. Lee, who holds 21.81%. In a public apology in May 2020, Lee said, “I will ensure that the term ‘union-free management’ will no longer be used at Samsung.”

The company is raising KRW 2.665 trillion through a rights offering to finance its acquisition of PolyPeptide, a Swiss contract development and manufacturing organization (CDMO). Payment for the newly issued shares is scheduled for the 17th, while voting on FKTU affiliation closes on the 18th. The partial strikes are set to continue through the 27th.