Kakao’s union issued an official rebuttal over the breakdown in wage talks. It said the cause was not differences over performance bonuses but repeated bad-faith bargaining by the company.

The Kakao branch of the Korean Federation of Chemical Textile Food Industry Trade Unions (Crew Union) said in a statement on Sunday that the company was distorting the facts by highlighting only some proposals from the talks and misleading public opinion as if the union had demanded excessive performance bonuses.

The mediation request was confirmed to include a total of 5 entities, adding XL Games to Kakao, KakaoPay, Kakao Enterprise and DK Techin, which were previously reported.

The union drew a clear line on the externally reported demand for a performance bonus equal to 10 percent of operating profit. It said the figure was only one of several proposals that the company put forward and were reviewed during the intensive bargaining process, and it was neither the union’s demand nor the core issue behind the breakdown in talks. It said the company intentionally disclosed only that number to frame the union as a group making excessive demands.

The union listed what it described as the company’s accumulated bad-faith bargaining as the background to the breakdown. It said the lead negotiator was replaced 3 times during this round of talks and that no substantive wage increase proposal was presented during nearly 6 months of negotiations. It also said the company unilaterally implemented performance bonuses without consulting the union and only moved to intensive bargaining after a recommendation from the labour ministry.

The union also pointed to what it called an imbalance in the compensation structure. It said compensation for members was limited despite the largest-ever results, while former and current executives have received stock option exercises and performance bonuses worth tens of billions to hundreds of billions of won.

A mediation session at the Labour Relations Commission is scheduled for May 18. If mediation breaks down, the union will gain the authority to proceed with steps for industrial action such as a strike. The union plans to hold a rally at Pangyo Station Plaza on May 20 and begin collective action.