Samsung Heavy Industries was ordered by the Fair Trade Commission (FTC) to take corrective measures (to prevent recurrence) and was fined 36 million KRW for failing to issue subcontract agreements in writing to subcontractors in a timely manner.
According to the FTC on the 4th, Samsung Heavy Industries entrusted company A with the subcontracting of ship electrical and mechanical equipment processing between September 2019 and April 2020. However, Samsung Heavy Industries issued contracts for 19 cases only 1 to 102 days after the start of work. For 10 cases, contracts were not issued until the work was completed. According to the Subcontracting Act, the primary contractor must issue a written document detailing the subcontract work and payment to the subcontractor before the subcontractor begins work. If contract terms are unclear, it is difficult for the subcontractor to prove damages such as unfair payment reductions or cancellation of the subcontract.
The FTC stated, "We took measures to ensure that the primary contractor complies with the obligation to issue written contracts to prevent disadvantages to subcontractors caused by unclear contract terms and to avoid post-dispute between parties."
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