Business owners and managers in South Korea face significantly tougher penalties for serious accidents or fatalities when new enforcement rules are introduced this week.
Under the Serious Accident Punishment Act (SAPA) and its Enforcement Decree, business owners and managers could face a minimum of a year in prison and/or a criminal fine of up to 1 billion Korean won (£618,500) if there is a fatality. The company could also be subject to a criminal fine of up to 5 billion Korean won (just over £3m).
According to independent research company Chambers and Partners, in cases where there are two or more injured employees who need treatment for at least six months or where three or more persons become occupationally ill within a year, the business owner or manager could face a prison sentence of up to seven years or courts may instead impose a fine of up to 100 million Korean won (£618). The company may also be subject to a criminal fine of up 1 billion Korean won.
As Chambers and Partners note, the bill on Punishment for Serious Accidents, which was passed by South Korea’s National Assembly and enacted as the SAPA on 8 January, ‘stipulates that business owners and persons responsible for management will be criminally liable for serious accidents caused by their failure to their duties to implement occupational safety and health measures’.
The SAPA, which sets out tougher penalties if a serious accident occurs than under South Korea’s Occupational Safety and Health (OSHA) Act, is due to be introduced in two stages.
Workplaces with 50 or more employees will be covered from Thursday this week (27 January) while those with fewer than 50 employees and construction projects with a contract price of less than 5 billion Korean won have until 27 January 2024 to prepare for the changes and ensure their OSH provisions meet the new legal requirements.
According to international law firm Herbert Smith Freehills LLP, workplaces with fewer than five employees will be exempt from the provisions relating to serious industrial accidents.
The ramping up of criminal liabilities under South Korea’s new OSH laws is designed to ensure that employers prioritise OSH, so that, according to Herbert Smith Freehills LLP, they ‘dedicate sufficient management time and attention to safety issues and that safety considerations are integrated into decision-making processes.’
The law firm also points out that there is now a greater onus on business owners and managerial personnel to obtain up-to-date knowledge on OSH requirements.
To safeguard against potential future incidents, they are being advised to become ‘familiar with the specific hazards and risks that may be specific to a particular workplace’.
The Enforcement Decree, which is due to take effect this week, provides detailed guidance on the legislation’s implementation.
Article 4 of the SAPA outlines specific obligations on business owners and managers to prevent serious industrial accidents, including setting up a health and safety management system; ensuring there are adequate contingency plans in place to prevent any recurrence; complying with any improvement notices; and putting in place any necessary measures that meet the requirements of OSH laws and regulations.
As part of their obligation to set up a health and safety management system, business owners and managers are now required by law to put in place guidelines that ‘identify and remedy any hazards or risk factors’ that relate to each workplace they are responsible for managing. They are also required to monitor compliance with these guidelines, at least twice a year.
‘An occurrence of three or more cases of occupational illnesses from the same hazard in a year constitutes a serious industrial accident under the SAPA’
The legal firm also notes that, under the requirements of the OSHA, they must also appoint ‘at least the prescribed number of OSH personnel’ needed to safeguard employees. If these individuals concurrently occupy other positions, business owners and managers must ensure they can perform their OSH duties.
Business owners and managers are also required to ensure that an adequate budget is put aside to cover the business’ OSH responsibilities, notably in relation to remedying any hazards or risk factors.
The new requirements also place a greater onus on these individuals to ensure that all managers, supervisors and persons in general charge of OSH have the necessary authority and financial resources to perform their duties. Business owners and managers also need to set criteria to evaluate their performance and evaluate it against this criteria at least twice a year.
There is a specific requirement for workplaces that have at least 500 full-time employees (or a construction firm in the top 200 ranking) to set up a dedicated service to oversee OSH in general.
To encourage worker feedback on OSH practices in the business, owners and managers must also put in place procedures that encourage workers to share any concerns they may have about work policies and/or practices. They must also implement and monitor, at least twice year, any measures that the company takes based on this worker feedback.
According to Herbert Smith Freehills LLP, the SAPA also requires business owners and managers to prepare a contingency plan in the event of a serious industrial accident, outlining what its response measures are. At least twice a year, they are also required to monitor whether these measures are being complied with.
As many businesses will use subcontracted service providers, the legislation also introduces tougher requirements on criteria and procedures for assessing them in the first place and monitoring their compliance once work starts.
The SAPA also imposes tougher measures to ensure that business owners and managers are checking their OSH obligations are being complied with on the frontline.
The list of requirements includes making sure that, at least twice a year, they check that any mandatory OSH training courses that relate to hazardous and dangerous work are provided. Business owners and managers must also review training outcomes.
If training is not provided, as required, they will need to follow this up and ensure it does happen and allocate additional budget if necessary.
Interestingly, the legislation also acknowledges the growing importance of occupational ill-health. The Enforcement Decree lists 24 types of illnesses as occupational illnesses. Under the new rules, business owners and managers are now required to understand the risks that developing these illnesses can pose.
As the law firm notes, ‘An occurrence of three or more cases of occupational illnesses from the same hazard in a year constitutes a serious industrial accident under the SAPA.’