New legislation in South Korea will expand employers’ health and safety obligations towards their contractors’ employees, and workers who are not employees. Penalties for violation of the law will also be strengthened. This article sets out details of the main provisions in the new law relevant to employers.
The Korean government recently approved a bill significantly amending the Occupational Safety and Health Act (‘OSHA’), which is the primary statute governing occupational safety and health in Korea.
This bill, which has yet to pass the National Assembly, will be the most extensive amendment to OSHA since its initial passage in 1990. Most significantly, the bill expands its protections to cover non-employee workers, and strengthens businesses’ responsibility to prevent industrial accidents.
This bill will effect the changes set out below.
New Health and Safety Obligations for Representative Directors
The representative director of companies that meet certain criteria will be responsible for establishing a health and safety plan every year and obtaining board approval for that plan. Failure to do so is a violation of the law subject to a fine of up to KRW 10 million (approximately USD 9,000).
Expanded Responsibility for Contractor and Franchisee Health and Safety
Companies will take on more responsibility for the safety of employees of their outside contractors. Currently, liability for an outside contractor’s employees is limited only to specific dangerous sites within a company’s own place of business. This bill makes a company liable for its contractors’ health and safety throughout the entirety of its places of business, and at other workplaces it provides or designates.
Large franchise businesses over a threshold to be set by regulation will be required to prepare and implement a health and safety programme covering the employees of their franchisees. The franchisor will also have to provide health and safety information to the franchisees regarding the facilities, machinery, goods, etc., that it provides.
Prohibition on Contracting Out Hazardous Work
Companies will be prohibited from contracting out certain types of dangerous or harmful work. The bill, however, provides an exception for temporary and intermittent work, and work for which a contractor’s technological skills are essential.
If a business contracts out any of the above prohibited work or, where an exception applies, fails to obtain the required approval from MOEL, it will be subject to a penalty of up to KRW 1 billion (approximately USD 900,000).
More Workers Protected
OSHA will now expand protection from ‘employees’ to a broader category of ‘workers’. However, the precise extent of this coverage expansion is unclear.
So-called ‘workers in special types of employment’, who are not employees under Korea’s Labor Standards Act but may be covered by Korea’s workers’ compensation system, will also become protected by OSHA.
Companies that operate online platforms for delivery services will be required to take health and safety measures with respect to independent contractors who collect and deliver goods by bicycles, scooters, and motorcycles.
Workers Entitled to Suspend Work for Safety Reasons
The bill provides workers with a clear right to suspend work and evacuate when there is an urgent risk of an industrial accident. Taking any adverse action, such as dismissal, against a worker who suspends his or her work and evacuates on account of such a risk, will be punishable by imprisonment for up to one year or a fine of up to KRW 10 million (approximately USD 9,000).
Increased Responsibility for Construction Companies
Construction project owners will be required to prepare a written health and safety plan and have the contractor adhere to it throughout the design and building stages.
When an employee dies due to a violation of health and safety rules, the potential sentence will be increased from seven years’ imprisonment to up to ten years. The potential fine (note that fines and imprisonment are generally alternative not cumulative punishments) will also be increased ten-fold to a maximum KRW 1 billion (approximately USD 900,000) for a corporate entity. The maximum fine remains KRW 100 million for an individual defendant.
Where a company is liable for health and safety violations with respect to its contractor’s employees, it will be subject to the same potential penalties as the contractor-employer itself. The potential sentence will be increased from one to up to five year’s imprisonment and the potential fine will also be increased fivefold to up to KRW 50 million (approximately USD 50,000).
Employers’ next steps
As the above changes to OSHA are significant and strengthen the obligations of businesses to protect workers’ health and safety, affected companies should be fully aware of the changes and should prepare to comply with the new requirements. In particular, this bill will give companies greater responsibility for ensuring the health and safety of their contractors’ employees and impose heavier penalties for violations. We thus strongly recommend that companies that frequently use outside contractors play an active leading role in managing health and safety measures.