Exception under Serious Accidents Law: If Combined Factory Staff Exceeds 50, Employer Can Be Punished

According to The Financial News, the Supreme Court of Korea has ruled that even if a workplace is temporarily exempt under the Serious Accidents Punishment Act because it has fewer than 50 employees, a chief executive can still be punished if the total number of workers at related factories exceeds 50.
On the 17th, the legal community reported that the Second Division of the Supreme Court of Korea, presided over by Justice Kwon Young-jun, recently upheld a lower court ruling that sentenced the head of Ilgwang Polymer, identified only by the surname Lee, to three years in prison for violating the Serious Accidents Punishment Act (industrial accident causing death), and imposed a fine of 500 million won on the company.
This is known to be the heaviest sentence confirmed by the Supreme Court of Korea against a person in charge of management since the Serious Accidents Punishment Act took effect in January 2022.
The accident occurred in March 2022 at an electric vehicle parts factory in Seocheon County. A factory worker suffered a head injury while working and died.
In the first trial, Lee was sentenced to one year in prison, suspended for two years. In the second trial, the court found his culpability more serious, sentenced him to three years in prison, and ordered that he be taken into custody in court.
Regarding another defendant, the appellate court stated, "It was a careless mistake that in fact triggered the explosion, which is a seriously aggravating factor," but added, "At the same time, it must be considered that the defendant is both an employer and, in effect, an employee with worker status."
In the final appeal, the company head argued that the Serious Accidents Punishment Act could not apply because the factory in question had fewer than 50 regular employees. The Act has applied first to workplaces with 50 or more employees since January 27, 2022, while workplaces with fewer than 50 employees have been subject to a grace period, with application starting on January 27, 2024. He claimed that, as of March 2022 when the accident occurred, the factory where it happened was itself a workplace with fewer than 50 employees.
However, the Supreme Court of Korea held that when there are multiple factories, those engaged in the same business must be viewed together as a single business entity.
The Supreme Court of Korea explained, "In light of the purpose of the Act and the scope of activities it regulates, the term 'business or workplace' should, in principle, be understood to mean a unit of economic and social activity that is organically operated as an integrated whole from a management perspective."
It went on to add, "Even if individual units such as a head office, branches, and factories are geographically separate, they should be regarded as a single business entity if personnel and labor management, as well as financial and accounting affairs, are not run independently and they merely form part of a unit of economic and social activity that is organically operated as an integrated whole from a management perspective."

hwlee@fnnews.com Lee Hwan-joo Reporter