Enforcement of the Serious Accident Punishment Act from the 27th... What Are the Key Issues?

[Asia Economy Reporter Kim Min-young] As the Serious Accidents Punishment Act takes effect from the 27th, the construction industry, which will be most affected by this law, is still in confusion. This is because there are not just one or two ambiguous regulations, making it difficult to determine how to apply them on site. We have summarized what legal standards the construction industry finds ambiguous.

◆Confusing criteria for construction amount... Detailed guidelines needed= The Serious Accidents Punishment Act applies to construction sites with a regular workforce of 50 or more or a construction amount of 5 billion KRW or more. The construction industry unanimously agrees that the criterion of 5 billion KRW for construction amount itself is unclear. The Ministry of Employment and Labor, the competent authority, mentioned at a briefing held for construction companies on the 13th that it refers to the "total construction amount including government-supplied materials cost." However, in the "FAQ on Serious Industrial Accidents under the Serious Accidents Punishment Act" published by the Ministry of Employment and Labor on the 18th, the construction amount criterion is specified as the amount contracted by the subcontractor (contractor) excluding government-supplied materials cost, causing further confusion. There is confusion starting from the definition of the construction amount that serves as the basis for punishment.

A construction industry official said, "After inquiring with the Ministry of Employment and Labor, we received the answer that 'including government-supplied materials cost' is correct," adding, "Even the government, which determines the level of punishment, failed to present a consistent standard, thus causing confusion."

◆Who is responsible when an accident occurs at a jointly contracted construction site?= The construction industry is also confused about who bears the obligation for safety and health measures when construction is jointly contracted. It is unclear where the responsibility lies if an accident occurs at a construction site under a joint subcontracting contract.

A representative from Company A said, "If it is a fine, it might be enough to pay according to the share ratio, but if an accident occurs where the CEO has to serve prison time, who would accept it as their responsibility?" He lamented, "The more detailed the discussion, the harder it is to prepare on site."

◆What is the standard for appropriate safety budget allocation?= The unclear standards for safety budget and personnel allocation are also cited as difficulties. Minister of Employment and Labor An Kyung-duk recently stated, "It is impossible to uniformly set budgets or personnel allocation depending on the industry or type of workplace." In response, sites are struggling over the appropriate budget size. A representative from Company B said, "If the cause of an accident is found to be a lack of safety budget, it is difficult to determine whether it is the fault of the contractor who allocated only that amount of safety budget or the client who did not request additional costs," pointing out, "Detailed guidelines are needed."

Compared to large companies that can respond through their own legal teams or contracts with law firms, smaller construction companies that must at least meet legal requirements naturally face greater difficulties. A representative from a small and medium construction company said, "Large construction companies have already established related organizations internally to prepare, but smaller companies find it difficult to respond at all."