Significant Changes Expected to Korea’s Occupational Safety and Health Act

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 following primary changes:

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.

Expanded Responsibility for Contractor and Franchisee Health and Safety

Companies will become more responsible 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 program with respect to 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.

New Disclosure Requirements for Manufacturers and Importers of Dangerous Chemicals 

A company which manufactures or imports harmful or dangerous chemicals will be required to submit a Material Safety Data Sheet (an “MSDS”) to the Ministry of Employment and Labor (“MOEL”) in addition to the filing requirements under the Chemical Material Management Act. Since the MSDS will be disclosed to the public, prior permission from MOEL will be required in order to keep the name and content of the ingredients confidential.

Prohibition on Contracting Out Hazardous Work

Companies will be prohibited from contracting out certain types of dangerous/harmful work. The bill, however, provides an exception for temporary and intermittent work, and work for which a contractor’s technological skills are essential.

More Workers Protected

OSHA’s protection will be expanded from “employees” to a broader category of “workers” who become injured or sick or die, as a result of their work. The precise extent of this coverage expansion is unclear.

Workers Entitled to Suspend Work for Safety Reasons

The bill provides a clear right for workers to suspend work and evacuate when there is an urgent risk of an industrial accident. In addition, the bill penalizes a business that imposes disadvantageous treatment on any worker who suspends his or her work on account of such risk.

 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. 

Stronger Penalties

– When an employee dies due to a violation of health-and-safety rules, the potential sentence will be increased from 7 years’ imprisonment to up to 10 years; the potential fine (note that fines and imprisonment are generally alternative not cumulative punishments) will also be increased ten-fold to a maximum KRW1 billion (approximately US$900,000) for a corporate entity (the maximum fine remains KRW100 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 1 year’s imprisonment to up to 5 years, and the potential fine will also be increased five-fold to up to KRW50 million (approximately US$50,000).

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 satisfy the new requirements. In particular, this bill will make companies more responsible for ensuring the health and safety of their contractors’ employees and impose heavier penalties for violations. We thus strongly recommend that companies which frequently use outside contractors play an active leading role in managing health-and-safety measures.

 By Yulchon LLC, South Korea, a Transatlantic Law International Affiliated Firm.

For more information on this topic, please contact  korealabor@transatlanticlaw.com.

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