On January 8, 2021, the draft Bill on Punishment for Serious Accidents, etc. (the “Serious Accidents Act”) was passed by the main session of the National Assembly. 

We are assessing the implications of this important new legislation on workplace safety and health risk management, and we hope to share with you relevant insights and key takeaways in due course.  In the meanwhile, we provide a quick overview of the Serious Accidents Act in the form of a Q&A below. 

1.   What is the legislative goal behind the Serious Accidents Act?

The legislative goal is to prevent serious accidents and protect workers.  The method envisioned to achieve this goal is to prescribe criminal punishment, administrative sanctions and punitive damages claim against the responsible management personnel and the business concerned, as further described below. 

2.   When will the Serious Accidents Act go into effect?

The Serious Accidents Act will go into effect at different times depending on the number of employee headcount at the workplace concerned.  The promulgation of the Serious Accidents Act is expected to occur during January 2021. 

The following sets forth the timeline for the implementation of the Serious Accidents Act. 

• In any workplace with employee headcount of 50 or more:
  -  one year after the date of promulgation of the Serious Accidents Act 

• In any workplace with employee headcount of fewer than 50 (or construction projects with contract price of less than KRW 5 billion):
  -  three years after the date of promulgation of the Serious Accidents Act

Please note that the Serious Accidents Act does not apply to any workplace with employee headcount of fewer than five. 

3.   Who will be responsible for carrying out the legal requirements under the Serious Accidents Act?

In short, the “responsible management personnel” are those who have the authority and responsibility to represent and generally and comprehensively manage the business concerned or who have the duty to oversee safety and health matters for the business concerned in a manner comparable to said responsible management personnel.  

4.   What is the specific legal duty being imposed on the “responsible management personnel” by the Serious Accidents Act?

The key legal duties of the “responsible management personnel” under the Serious Accidents Act are as follows: 

• Establishment and implementation of an effective workplace safety and health regime which can prevent serious accidents in the workplace
  -  This includes securing the necessary budget and personnel required to prevent serious accidents. 
  NOTE: Specific requirements will be elaborated pursuant to the Presidential Decree. 

• (In case of workplace which has experienced serious accidents) Preparation of remediation measures to prevent recurrence of similar accidents

• Implementation of appropriate measures in case the national or provincial governments concerned have issued remediation orders to the business concerned

• Taking management steps which are necessary to comply with applicable laws and regulations concerning workplace safety and health
  NOTE: Specific requirements will be elaborated pursuant to the Presidential Decree. 

5.   What happens if the aforementioned obligations are not fulfilled by the responsible management personnel?

• First, the responsible management personnel will face criminal liability.
  -  In case of a fatal accident: imprisonment of one year or more and/or criminal fine of up to KRW 1 billion  
  -  In case of a serious accident not involving fatality: imprisonment of up to seven years or a criminal fine of up to KRW 100 million
  -  In case of a repeat offender within five years: enhanced punishment (of up to 50%)   

• Second, in addition to the individual actor responsible for non-compliance, the business concerned will face liability under the Serious Accidents Act.
  -  In case of a fatal accident: criminal fine of up to KRW 5 billion for the company  
  -  In case of a serious accident not involving fatality: criminal fine of up to KRW 1 billion for the company  
  NOTE: The business concerned may be held not liable in case substantial care and oversight was exercised to prevent non-compliance with applicable safety and health legislation. 

• Third, the Serious Accidents Act imposes duty on the concerned responsible management personnel to attend designated safety and health training and make public announcement of the occurrence of a serious accident.

• Fourth, the Serious Accidents Act provides for punitive damages (with the ceiling on compensation set at five times the actual damages).

[Korean version]