SOUTH KOREA: An Introduction to Employment
The Expansion of the Scope of the SAPA to Businesses With Fewer Than 50 Employees
The scope of the Serious Accident Punishment Act (SAPA), which was enacted on 26 January 2021 and became effective on 27 January 2022, will be expanded to cover businesses with fewer than 50 employees from 27 January 2024. In effect, the SAPA will apply to businesses or workplaces with five or more employees, regardless of the nature or type of their business.
As there are concerns about the implementation of the SAPA to smaller companies, the government and the ruling party are pushing for an additional two-year grace period. However, consultations with the opposition party are not going smoothly, and if there is no agreement on such extended grace period, then the SAPA will apply to all businesses with fewer than 50 (but more than five) employees from 27 January 2024, as per the original bill.
The SAPA imposes a duty to ensure safety and health on businesses’ responsible management personnel (RMP), which generally refers to the representative director (akin to a CEO) of a company. Failure to fulfil such duties can result in criminal sanctions for RMP if a serious accident occurs due to such failure. There have been recent court decisions on SAPA cases, and while the courts have mostly imposed imprisonment with suspended execution for violation of the SAPA, in cases where serious accidents occurred repeatedly, the courts have imposed imprisonment of over one year for the RMP.
Accordingly, businesses with fewer than 50 employees must also prepare to fulfil their obligations under the SAPA. In particular, Article 4 of the SAPA stipulates that the company must:
(i) establish and implement a safety and health management system (workforce, budget, organisation, etc) necessary for accident prevention;
(ii) establish and implement a plan to prevent recurrence of serious accidents;
(iii) follow any applicable government improvement or corrective order in accordance with the relevant laws; and
(iv) take managerial measures to comply with applicable safety and health laws and regulations.
However, there is an issue for smaller businesses as companies with fewer than 50 employees typically do not have an expert in charge of safety and health. As such, it is not easy for such smaller companies to implement the above measures.
The Ministry of Employment and Labour issued the “Guide to Follow the SAPA” (provided only in Korean) on 16 March 2022 to provide guidance for businesses. However, practically, companies have found it difficult for even health and safety experts to perform the statutory obligations under the SAPA using only the Guide issued by the Ministry of Employment and Labour.
Furthermore, since the SAPA is a relatively new law without many established precedents, it is difficult even for companies with expertise in the Occupational Safety and Health Act to understand and know clearly what specific measures are required in order to fulfil their obligations under the SAPA. Therefore, to prepare for the expanded enforcement of the SAPA, it is imperative to consult with experts in a timely manner.