The Korean Serious Accidents Punishment Act

The Serious Accidents Punishment Act (SAPA) was promulgated on 26 January 2021 and enforced on 27 January 2022 for businesses (or places of work) with 50 or more employees. The SAPA will also apply to businesses (or places of work) with five or more, but less than 50, employees from 27 January 2024.

Prior to the SAPA, the Occupational Safety and Health Act (OSHA) was in effect for occupational safety, but it was criticised as ineffective in preventing workplace accidents and occupational illnesses. The SAPA was enacted to secure safety and health of workers in the workplace by punishing business owners or the responsible managing officer (eg, the CEO) of the business concerned for any violation of safety and health-related laws that results in a serious accident. In addition, the SAPA expands the scope of protection from employees to workers, to include those who do not have an employment relationship (eg, those who provide labour through contracting, outsourcing), increases the severity of criminal penalties (eg, imprisonment of not less than one year for the responsible managing officer in fatality cases), and also stipulates punitive damages within five times the amount of incurred damages.

Among the obligations to secure safety and health under the SAPA, the following nine measures should be taken for the establishment and implementation of a safety and health management system (Article 4 of the presidential decree of the SAPA):

As the SAPA has been in effect for more than a year, there have been several prosecutions for the SAPA violations. The following are two court decisions that convicted the responsible managing officer.

On 6 April 2023, the court sentenced the representative director of Company A, who was charged with violating the SAPA, to one year and six months in prison, with three years of suspension of execution and fined Company A KRW30 million. The representative director was accused of failing to take measures to establish and implement a safety and health management system in connection with the accident of a subcontracted worker at a construction site in May 2022.

The court found that Company A failed to comply with the obligations to ensure safety and health under the SAPA and that its non-compliance and failure to take appropriate measures concerning the establishment and implementation of a safety and health management system resulted in the accident. It is worth noting that the fact that Company A had announced a detailed plan to establish a safety and health management system as required by the SAPA to prevent the recurrence of similar accidents was considered as a favourable factor for the representative director.

On 26 April 2023, the court sentenced the representative director of Company B, who was charged with violating the SAPA, to one year in prison without any suspension of execution, and the representative director of Company B was arrested at the court. The representative director was accused of failing to take measures to establish and implement a safety and health management system in connection with the accident of a subcontracted worker at the site of Company B.

Unlike the representative director of Company A who received a prison sentence with suspension of execution, the representative director of Company B was sentenced to imprisonment without suspension of execution because he had multiple criminal convictions related to occupational safety. As Company B has been fined several times and its representative director, as the general manager of safety and health of the workplace, has been punished for violating OSHA provisions which resulted in fatal workplace accidents, the court emphasised that the purpose of the SAPA is to protect the lives and bodies of workers by fulfilling the management’s obligation to ensure their safety and health, and presented the history of the Company B’s violations of OSHA as justification for the representative director’s imprisonment sentence without suspension of execution.

It is necessary to establish a safety and health management system throughout the workplace for subcontractors as well as employees. In particular, in light of the court’s ruling in the second case mentioned above, the establishment and implementation of a safety and health management system appears to be even more important since any previous fine imposed on individuals in charge of safety and health at a workplace for violations of OSHA will be considered as a significantly unfavourable factor in determining the sentence for violations of the SAPA. Businesses subject to the SAPA should periodically review whether they have properly established and implemented a safety and health management system and manage the implementation of their obligations to ensure safety and health in a thorough and detailed manner. They should also occasionally check and take measures to improve compliance with safety and health standards throughout their workplaces, including where the work is conducted by subcontractors.