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Foreign Businesses Seek Clarification of New Work-Accidents Law

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Foreign Businesses Seek Clarification of New Work-Accidents Law

Foreign companies have requested urgent clarification about a new accident-at-work statute that punishes employers for injuring their employees while performing their job duties.

The law, which came into effect on Jan. 27, is an attempt to respond to Korea’s poor record of work safety and holds executives personally liable for workplace accidents, with penalties of up to W1 billion or one year in prison (US$1=W1,211).

While labor advocates welcome the legislation, business owners fear that it could discourage businesses from setting up roots or investing in Korea.

On March 30, the Chosun Ilbo’s Asian Leadership Conference hosted a webinar about the law’s prospects with James Kim, the chairman of the American Chamber of Commerce in Korea; David Park, an attorney at law firm Hwa-woo; and Sean McLaughlin of consulting firm Cadmus Group.

The law replaces Korea’s old workplace safety law. This law was widely criticized as ineffective. Is the new law better?

From left to right, Sean McLaughlin and David Park. James Kim

Park acknowledged that the new law will “subject companies and high-ranking personnel to harsher punishments and address legal loopholes which previously permitted top management to transfer responsibility to third parties.”

These included subcontractors. This is why Korea’s workplace accidents rate is high. The old law allowed the main contractor to avoid responsibility, and the subcontractor could take the blame. Activism was galvanized in 2018, when 24-year-old contract worker Kim Yong-kyun was crushed to death by machinery at a thermal power plant in Taean, South Chungcheong Province.

But experts worry about vagueness surrounding key terms in the new law, especially its ambiguous definition of terms that translate as “chief manager” or “responsible executive” and “required measures,” according to a survey of 121 foreign firms in Korea by the Korea Enterprises Federation.

” The ambiguous definitions of “responsible executive” have caused a lot controversy, Park said. Park said that the law was still unclear as to which obligations businesses must comply to avoid being punished. “

Small and medium-sized businesses are especially concerned about the possibility of a large fine. Park noted that larger companies are more equipped to deal with the law.

Kim warned that foreign corporations may be discouraged from sending their CEOs and senior executives to Korea by the new law. Kim stated that AmCham’s top priority was to establish Korea as a regional headquarter in Asia. This is done to draw both Korean and foreign CEOs. We hear many concerns about the law. “

The law in the United States differs from American workplace protection. This could cause confusion for foreign companies. McLaughlin stated that criminal charges are not brought against the business owner but the entire company in the United States. This is largely because it’s a matter of compensation.

The Korean penalities are much more severe than those under equivalent American laws.

Many businesses hope that the law will change to make it more precise in terms of its requirements and terminology, particularly in light Yoon Seok-youl’s pledge to be more friendly to business. Park stated that although I don’t believe there will be any major changes, the law is still very early in its development. However, there are possibilities for the new administration to tweak the enforcement level to clear up gray areas, and make the law more practical.

All three speakers acknowledged that it was too soon to assess the law’s effectiveness in preventing accidents. McLaughlin expressed hope that Korea will reduce work-related injuries. He noted that while the U.S. 50 years ago had similar workplace safety problems as Korea today, it has since made large strides.

“It’ll be fascinating to see what kind of effects it has over time and what takeaways other nations take from Korea’s implementation. “The U.S. has seen a pretty dramatic reduction in workplace fatalities and injuries, but this has been a pretty stable decline over 40 to 50 years. “

Many consider the legal system important. It punishes accidents both during manufacturing or those that happen because of poor-designed industrial plants. Six workers were killed and another injured in a Gwangju apartment collapse. The builder had cut corners. A second building fell on the streetside in Gwangju during demolition last June, killing 9 people and injuring many others.

McLaughlin said he is hopeful that the law in principle provides an opportunity for companies to prioritize workplace safety.

” These are essential actions companies should be considering in regards to workplace safety and well-being,” he stated. These firms have the chance to make this a priority and demonstrate that they take it seriously. “

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