South Korea has issued new guidelines excluding profit-sharing demands and major investment decisions from mandatory collective bargaining. The move follows a Samsung Electronics deal allocating 10.5% of chip-division profits to special bonuses, amid government concerns about foreign investment and competitiveness.
The background: South Korea’s March 2026 “Yellow Envelope Act” expanded the scope of labor disputes to include management decisions affecting working conditions.
Unions at Samsung Electronics and other major companies responded by demanding a fixed share of operating profits as bonuses and a say in major investment decisions.
The Samsung deal: the union initially sought 20% of operating profits in bonuses and demanded bargaining rights over Samsung’s planned 800 trillion won semiconductor investment. On May 20, Samsung agreed to allocate 10.5% of chip-division profits to special bonuses. But the deal left unresolved whether such demands were subject to mandatory bargaining.
The government responds: on September 3, the Ministry issued guidelines excluding fixed-percentage profit bonuses and major investment decisions from mandatory bargaining.
As reported by the Korea Times, the government warned that such demands could infringe on shareholder rights and place excessive restrictions on business decisions.
Larger implications: similar demands have surfaced at SK Hynix, HD Hyundai Heavy, Kakao and Hyundai Motor. The Labor Minister has warned that expanding bargaining rights over profits and investments could discourage foreign investment and weaken South Korea’s regional competitiveness.
