Who’s the ‘accountable government’ underneath the Severe Accidents Punishment Act?

According to the highly controversial Major Accident Penalty Act, which was codified by the National Assembly in January of this year, entrepreneurs and responsible executives have to comply with new health and safety obligations. Failure to comply with these requirements resulting in serious bodily harm will result in significant civil liability and administrative / criminal penalties.

The introduction of the law is seen as a legislative effort by the South Korean government to address public concerns and criticism regarding numerous high profile industrial accidents and public disasters in recent years.

Despite the government’s good intentions, the broad lines of the new legislation have created many gray areas that have created confusion and widespread debate throughout the business world. One of the most controversial issues is the lack of clarity about the definition of a “responsible manager” who bears the heaviest obligations and the resulting criminal liability.

To understand the meaning of “responsible manager”, let us turn to the question of how existing laws determine who is responsible for an accident at work.

Under the Occupational Health and Safety Act, Korea’s basic labor law, the “business owner” is required to take safety and health measures to maintain and promote the safety and health of workers.

In addition, the entrepreneur himself is liable if this obligation is violated. Courts have determined the responsible person in each individual case and decided that in large companies with many operating sites, the person responsible for the specific workplace / location of the accident is generally punishable. High-ranking executives were also able to easily avoid criminal liability in the cases of “professional negligence with risk of injury” or “professional negligence resulting in death” because courts found “professional negligence” from a mere violation of a general and abstract duty of care. As a result, companies have structured their chain of command to minimize the involvement of high-level executives in security management to protect them from possible criminal liability.

In order to close this loophole in existing health and safety laws and to encourage top management of companies to exercise company-wide leadership roles in health and safety issues, the law defines a “responsible manager” as (i) an “authorized and responsible person to represent and Surveillance “a company or (ii) a comparable person responsible for the safety and health of a company.”

First, a “person empowered and responsible for the representation and direction of a company” refers to a person who represents the company externally and internally manages and enforces the implementation of the company. The representative director usually fits this description; What matters, however, is whether the person has substantial authority and responsibility, not their nominal title or position. If there is more than one deputy director, the person who has final authority and responsibility for all business operations can potentially fall under this definition. However, it cannot be ruled out that several executives may be jointly and severally liable for unlawfully ensuring health and safety.

Second, a “comparable person responsible for safety and health matters” refers to a person empowered to make final decisions related to the health and safety management system. Typical examples are a person responsible for health and safety and a person responsible for production. On the contrary, a works manager or site manager who is usually given such responsibility at a specific workplace cannot be regarded as a responsible manager, as his responsibilities are limited to a specific workplace and not to the entire company.

The most controversial and unanswered question related to the definition of a responsible executive is the interpretation of the conjunction “or” that connects (i) and (ii) above. This is especially problematic when a company has both a representative director and an executive who is empowered to administer health and safety matters. If “or” has an exclusive meaning, the provision is likely to absolve the deputy director from criminal liability. On the other hand, if “or” has a broad meaning, the deputy director is likely still liable even if there is an executive responsible for health and safety matters.

The law contains many ambiguities which could cause considerable confusion in the early stages of implementation, and the question of who is the executive responsible will remain in most cases. It is therefore imperative for companies to closely monitor developments in the interpretation and application of the law in the future in order to reduce risks and ensure proper compliance.

By Kim Jae-ok and David Park

Kim Jae-ok is a partner at Yoon & Yang with expertise in criminal law and occupational safety and David Park is an Australian (New South Wales) / New Zealand licensed attorney with Yoon & Yang with expertise in corporate law, dispute resolution and labor – and labor law. – Ed.

From Korea Herald ([email protected])