Amended Occupational Safety and Health Act passes National Assembly plenary session

Fine of up to 5% of operating profit when 3 or more workers die in a year

Work-stoppage trigger expanded from 'imminent danger' to 'risk of concern'

Business community calls for focus on safety management over punishment

An amendment to the Occupational Safety and Health Act, which allows fines of up to 5% of operating profit to be imposed on companies where three or more workplace accident fatalities occur in a year, passes a plenary session of the National Assembly on Thursday over the objections of People Power Party lawmakers. [Yonhap]
An amendment to the Occupational Safety and Health Act, which allows fines of up to 5% of operating profit to be imposed on companies where three or more workplace accident fatalities occur in a year, passes a plenary session of the National Assembly on Thursday over the objections of People Power Party lawmakers. [Yonhap]

The Korea Enterprises Federation raised concerns Thursday over the National Assembly's passage of an amendment to the Occupational Safety and Health Act that allows fines of up to 5% of operating profit to be imposed on companies where three or more workers die in industrial accidents in a single year. The federation said the fine is excessive and that a broadening of the grounds for work stoppages could increase the burden on businesses and fuel disputes at the workplace.

The federation released a statement Thursday setting out the business community's position on the amendment's passage. "This amendment stipulates that a fine of up to 5% of operating profit may be imposed when three or more fatalities occur in a year," it said. "This is an excessive and unrealistic standard that takes no account of the business environment."

The National Assembly passed the amendment at a plenary session Thursday. Under the revised law, if an employer violates safety and health obligations and three or more workers die in industrial accidents within a single year, a fine of up to 5% of operating profit may be levied. Where operating profit is absent or difficult to calculate, the fine may reach 3 billion won ($2.21 million).

The federation said the burden would fall heavily not only on large companies but also on small and midsize enterprises. "For large workplaces, astronomically large fines could be imposed, and for small and midsize companies, we are deeply concerned that the impact could be severe enough to threaten their very survival," it said.

The federation also raised the issue of potential overlap with existing penalty regimes. It argued that introducing an additional financial sanction in the form of a fine — on top of a series of punitive legislative measures including amendments to the Occupational Safety and Health Act and the enactment of the Serious Accidents Punishment Act — could make the overall sanctions against companies excessively heavy.

"Establishing yet another fine system — a powerful form of economic penalty — and applying it on top of existing measures amounts to excessive sanctions against employers, and it is hard to expect any meaningful effect on accident prevention," the federation said.

The federation also expressed concern over the expansion of work-stoppage rights. The amendment broadens the circumstances under which workers may halt work and evacuate, extending the trigger beyond situations of "imminent danger" of an industrial accident to cases where danger is merely "a concern." It also establishes grounds for workers and worker representatives to demand that employers order a work stoppage.

"Because the criteria for judgment are unclear, disagreements and disputes between labor and management over whether and to what extent work should be stopped appear inevitable," the federation said.

It added that while work stoppages to protect workers' lives and safety are necessary, the absence of clear standards increases the risk of subjective and arbitrary judgment by interested parties, deepening on-site confusion and raising the possibility of abuse of the system.

The federation called for clear standards to be established in the process of drafting enforcement decrees and application guidelines, in order to reduce the burden on businesses and minimize confusion in the field.

"We call for a shift away from legislation focused solely on tightening sanctions and punishment against employers, and for rational legislative discussions aimed at supporting genuine improvements in safety management capacity," the federation said, adding that it hoped the government would work to prepare subordinate regulations and application guidelines that minimize the side effects of the new law.


kwater@heraldcorp.com