The Serious Accident Punishment Act Turned a Deaf Ear Only to Corporate Appeals

Maintaining Employer Punishment and Compensation Liability
Easing Regulations on Public Officials and Small Business Owners

[Asia Economy Reporter Kiho Sung] As the ruling and opposition parties are revising the Serious Accident Corporate Punishment Act (Serious Accident Act) bill considering the positions of various sectors, there are criticisms that only companies are being thoroughly excluded. Although the political circles have boasted that they considered the companies' positions and partially eased some punishment provisions, none of the business community's consistent demands?such as excluding business owners from punishment, extending the grace period, and limiting the scope of liability for damages?have been accepted. Moreover, with the ruling and opposition parties announcing plans to pass the bill in the plenary session on the 8th, the business community is facing another bombshell following the three corporate regulation laws (Commercial Act, Fair Trade Act, and Financial Group Supervision Act).

According to political and economic circles on the 6th, the National Assembly Legislation and Judiciary Committee's Subcommittee on Bill Examination has decided to delete the special provisions for punishing public officials in the Serious Accident Act, citing difficulties in proving the causal relationship between dereliction of duty and the occurrence of serious accidents. This measure reflects the government's opinion that proving causality is practically difficult.

The punishment for small business owners is also being eased. Currently, the Democratic Party advocates excluding businesses with fewer than five employees, while the People Power Party insists on complete exclusion, so the baseline in the consensus bill is expected to be significantly lowered. This reflects the opinion that the impact on self-employed and small business owners should be considered when reviewing the Serious Accident Act.

Discussion on the Democratic Party's proposal to include schools and school principals as subjects of punishment under the Serious Accident Act has been postponed. The government’s original bill included only private academies, which sparked fairness controversies, leading to an attempt to expand the scope to schools. However, following repeated opposition from teachers' organizations, the matter appears to have been deferred.

On the other hand, the punishment provisions for companies have been virtually maintained as is. The imprisonment-related punishment provisions, which drew the strongest opposition from the business community, have not changed. Instead, the government’s negotiated bill slightly eased the clause from imprisonment of two years or more to imprisonment of one year or more. Conversely, the upper limit of fines, originally set between 100 million and 2 billion won in the government bill, was raised to a maximum of 5 billion won. The punitive damages scale, which the business community criticized, was also maintained as is in the government’s negotiated bill at 'up to five times the amount of damages.'

The business community points out that there has been no significant change in the bill’s overall framework. They are particularly concerned that none of their opinions were accepted during the bill review process. The Korea Employers Federation submitted an opinion letter to the National Assembly Judiciary Committee the day before, proposing ▲exclusion of business owners from punishment ▲removal of the minimum sentence for managerial punishment and deletion of injury punishment provisions ▲removal of the minimum fine and reconsideration of the maximum fine for corporate punishment ▲reduction of liability for damages to within three times ▲extension of the grace period, but none of these were reflected during the ruling and opposition parties’ bill review process.

The business community has launched an all-out legislative blockade. Ten economic organizations, including the Korea Employers Federation, the Federation of Korean Industries, the Korea Chamber of Commerce and Industry, the Korea Federation of Small and Medium Business, and the Korea International Trade Association, will announce the business community’s final position on the enactment of the Serious Accident Act this afternoon at the Korea Federation of Small and Medium Business. They plan to express their agreement on the prevention of serious accidents related to the Serious Accident Act but emphasize that the legislation is an excessive burden that companies find extremely difficult to bear.

This content was produced with the assistance of AI translation services.