Orion's sales labor union has initiated its first partial strike in the company's history amid ongoing disputes over wage system reforms. The food industry is closely watching the situation as companies face prolonged domestic stagnation and rising labor costs.
According to industry sources, the Orion branch of the Korean Confederation of Trade Unions conducted a partial strike from June 4 to June 5. Approximately 70 sales employees responsible for supplying and selling products to domestic supermarkets participated in the strike, which involved refusing to work in the afternoon. The union secured the right to strike with a 94.5% approval rate in a prior vote.
Negotiations between Orion and the union began in January, but discussions broke down in April, and mediation attempts by the Central Labor Relations Commission in April and May also failed to reach an agreement.
The company proposed a wage increase of 3.5%, up from the previous 2%, but the union rejected this offer, arguing it does not align with the company's growth and is demanding a 7.5% increase. The union is also calling for the implementation of a previously agreed adjustment of the basic salary and allowances ratio (from 60:40 to 70:30) and improvements to the compensation system for on-site duties.
This strike is considered unusual given that Orion has historically provided some of the best working conditions in the confectionery industry. According to the company's business report from last year, the average annual salary for employees was 81 million won, significantly higher than that of competitors. However, the conflict has arisen due to a perceived gap in compensation felt by employees. Compared to 2024's average salary of 88 million won, last year's average salary has actually decreased. Additionally, while dividends surged from 49.4 billion won to 138.4 billion won over the past three years, the union claims that employee compensation has not kept pace.
The disparity in perceptions between labor and management has also been exacerbated by strong overseas business performance and stagnation in domestic operations. Last year, Orion recorded its highest-ever consolidated revenue of 3.33 trillion won and an operating profit of 558.2 billion won, with 66.7% (2.22 trillion won) coming from overseas subsidiaries in countries like China and Vietnam. In the first quarter of this year, revenue from overseas subsidiaries increased by 24.4% compared to the previous year, while revenue from the Korean subsidiary grew only 0.4%. There remains a significant gap between labor and management regarding how much of the overseas success should be reflected in employee compensation.
The industry is concerned that this situation could have broader implications for wage negotiations across the food sector. Major companies like Nongshim are currently engaged in wage negotiations, and the union leading the Orion strike has members in various companies, including Haitai Confectionery, Paris Baguette, Dunkin', Samlip, Pulmuone, Dongseo Foods, and Jeong Sik Food.
Orion plans to hold additional negotiations on June 10. An Orion representative stated, "We operate one of the industry's best compensation systems, and the average salary per employee has nearly doubled over the past decade. We provide annual wage increases along with performance bonuses and special bonuses during the Chuseok holiday." The representative added, "We aim to create a better company through amicable negotiations with the union."
* This article has been translated by AI.
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