Fair Trade Commission Issues Corrective Order and 20 Million KRW Fine to Hyundai Heavy Industries for "Pre-construction Before Contract" Practice

[Sejong=Asia Economy Reporter Joo Sang-don] The Fair Trade Commission announced on the 15th that it has decided to issue a corrective order and impose a fine of 20 million KRW on Hyundai Heavy Industries for violating the written document issuance obligation by failing to provide written contracts specifying delivery schedules and subcontracting payments when outsourcing shipbuilding-related work to small and medium subcontractors.

According to the Fair Trade Commission, Hyundai Heavy Industries entrusted shipbuilding-related tasks to small and medium subcontractors without providing written contracts in advance, and issued the contracts late during or after the work was completed. The written documents lacked signatures or seals from both parties. The unfair subcontracting practices detected this time are related to a total of 83 subcontracting transactions conducted between April 2015 and November 2016.

The Subcontracting Act requires that the original contractor must issue a written contract to the subcontractor before the subcontractor begins work. The written contract must include the details of the entrusted work, delivery schedule and location, subcontracting payment, and other contract conditions, and must be signed or sealed by both the original contractor and the subcontractor.

Accordingly, the Fair Trade Commission decided to issue a corrective order to Hyundai Heavy Industries to prevent recurrence of failure to provide written contracts and delayed issuance, and to impose a fine of 20 million KRW.

A Fair Trade Commission official stated, "This action is significant in putting a stop to the customary unfair practice of 'work first, contract later' in the shipbuilding industry, which has been pointed out as a long-standing issue," and added, "We plan to continue strict law enforcement against unfair subcontracting transactions to ensure that subcontractors do not suffer unjust disadvantages."

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