South Korea's National Assembly passed the draft Bill on Severe Industrial Accident, etc. (Severe Industrial Accident Law) (Act) last month. The Act will complement the existing Occupational Safety and Health Act and is aimed at preventing major workplace accidents by holding business owners and managerial personnel responsible.

Responsibility for business owners and managerial personnel

The Act applies to "business owners" and "managerial personnel". "Business owners" refer to a person or legal entity who owns a business or operates a business through services provided by others. "Managerial personnel" are individuals who are authorised to represent and manage the business concerned or individuals who have the duty to oversee safety and health matters for the business concerned.

The Act exempts employers with fewer than five workers.

Major accidents

The Act regulates major accidents, which consist of major industrial accidents and major public accidents.

An accident is categorised as a major industrial accident where it involves:

  • death of at least one person;
  • injuries to at least two persons or more requiring at least a six months' recovery period; or
  • at least three persons or more experiencing the same type of work-related illness attributable to the same cause within a one-year period.

An accident is categorised as a major public accident where it is caused by any manufacturing/design defect or negligence in production, installation or management of specific material, products, public facility or means of transportation, and involves:

  • death of one person or more;
  • injuries to at least ten persons requiring at least a two months' recovery period; or
  • at least ten persons or more experiencing the same type of work-related illness requiring at least a three months' recovery period attributable to the same cause within a one year period.

Criminal penalties

In the event of a major accident, the Act imposes personal criminal liabilities on business owners and managerial personnel as follows:

For repeated offences, an enhanced punishment of up to 50% of the usual punishment applies. The Act also imposes corporate criminal penalties in the event of a major accident as follows:

Additionally, workers injured in a major accident as a result of a business owner or managerial personnel's intentional or grossly negligent failure to comply with the Act may seek punitive damage of up to five times the actual damage.

Obligations to implement health and safety protocols

The Act also requires business owners and managerial personnel to:

  • establish an effective workplace safety and health management protocol to prevent workplace accidents;
  • establish an accident response plan and, in case of an accident, prevent further accident (including by implementing any remedial orders issued by the national or provincial governments); and
  • take steps which are necessary to comply with applicable laws and regulations concerning workplace safety and health.

Effective Date

The Act will take effect in phases depending on the size and the number of employees at the workplace:

  • for workplaces with 50 or more employees, the Act will be effective 1 year after the date of the promulgation of the Act (at the time of writing, the Act has yet to be promulgated);
  • for workplaces with at least 5 but fewer than 50 employees or construction projects with contract price of less than KRW 5 billion (approximately USD 4.5 million), the Act will be effective 3 years after the date of promulgation of the Act.

Key Takeaways

The Act was proposed following several fatal industrial accidents in the last couple of years in South Korea. With an increasing burden on senior officers and the lack of clarity on the scope of managerial personnel, employers (particularly those in the construction, industrial and manufacturing sectors) should take immediate steps to carry out risk assessments, put in place the necessary safety measures and review their compliance ahead of the effective date of the Act.