The Kakao branch of the Korean Chemical Fiber Food Allied Workers Union, the union, and Kakao management will hold a second mediation meeting at 3 p.m. on May 27 at the Gyeonggi Provincial Labor Relations Commission. The mediation is effectively the final hurdle that will determine whether Kakao headquarters secures the right to strike.

The two sides failed to narrow differences over key issues including the pay rise rate and the performance compensation system in the first mediation on May 18. They agreed to extend the mediation date once, but if talks also break down on the day and the commission decides to halt mediation, the Kakao headquarters union will secure a legal right to strike.

The core issues in the dispute are performance pay and how RSUs, or restricted stock units, are handled. The union argues that despite strong results last year, management paid executives performance bonuses worth tens of billions of won while applying opaque standards to employees. The sides are also locked in a standoff over whether to include RSUs worth 5 million won in performance pay.

Depending on the mediation outcome, the possibility that a strike spreads across the group cannot be ruled out. Four affiliates, including KakaoPay, Kakao Enterprise, DK Techin and XL Games, have already secured strike rights after mediation was halted. The union passed strike authorization votes on May 20 at all five entities, including headquarters. If headquarters also secures strike rights, it could lead to the first joint general strike in Kakao Group history.

Management’s chief negotiator is Chief Financial Officer Shin Jong-hwan (신종환), who is taking part directly in his capacity as head of management support. With Kakao posting strong results in the first quarter and focusing on restoring market trust through key strategies such as turning KakaoTalk into an AI agent, what compromise it offers in the mediation will be key.

Even if headquarters enters a strike, a full suspension of major services such as KakaoTalk is unlikely. That is because server-based platform services have automated systems in place. An analysis says, however, that a prolonged internal conflict will inevitably undermine organizational stability and delay decision-making. Kakao recently said 28 executives bought about 500 million won worth of its own shares to improve investment sentiment, but if strike risks materialise, it could sharply brake efforts to support the share price.

With other affiliates such as KakaoBank also holding wage and collective bargaining talks, there is also talk of a domino risk of a headquarters strike spreading across the group.

Kakao management said, "As labor and management agreed on May 18 to extend the mediation period, we will do our best to engage in good-faith talks during the remaining period and reach an amicable agreement."