South Korean President Lee Jae-myung has called for setting "appropriate limits" on collective labor actions during a cabinet meeting, as government-mediation between Samsung Electronics Co., Ltd. and its union broke down, raising the risk of a strike.

Although President Lee did not name Samsung Electronics Co., Ltd. directly, his remarks came shortly after union leaders at the global chip giant announced that a planned 18-day work stoppage, set to begin on Thursday, would proceed as scheduled due to renewed deadlock in negotiations. Samsung Electronics Co., Ltd. has accused the union of making "excessive" demands.

During a live broadcast of the cabinet meeting, President Lee stated, "It is understandable for some unions to exercise their rights to protect their interests, but there must also be appropriate limits."

At the heart of the dispute is a profit-sharing mechanism. The Samsung Electronics Co., Ltd. union is demanding the removal of the current cap on bonuses, the allocation of 15% of the company's operating profit for employee bonuses, and the formal inclusion of these terms in the labor contract.

Samsung Electronics Co., Ltd. had proposed using 10% of operating profit for bonuses, along with a special one-time compensation package that exceeds industry standards. Company executives, however, argue that the union's demands are unsustainable in the long term.

President Lee remarked, "Operating profit primarily belongs to investors and shareholders," adding that he finds it "somewhat difficult to understand" the practice of institutionalizing the direct distribution of a fixed pre-tax percentage of profits.