[Initial Perspective] The Last Chance to Hear the Appeals of Small and Medium Enterprises

Kim Cheol-hyun, Deputy Director of the Bio Startup and Venture Department

830,000 locations. This is the number of workplaces in South Korea with fewer than 50 employees. Among them, more than 660,000, or 80%, are unprepared. This is about the "Serious Accidents Punishment Act."

The day when the majority of small and medium-sized enterprises (SMEs) with fewer than 50 employees will be subject to the Serious Accidents Punishment Act without sufficient preparation is approaching quickly. On the 9th, the amendment to the Serious Accidents Punishment Act failed to pass in the National Assembly plenary session. If things continue as they are, the law will apply to workplaces with fewer than 50 employees starting from the 27th, which is 17 days later. The Serious Accidents Punishment Act was promulgated on January 26, 2021, and came into effect in January 2022. According to the supplementary provisions at that time, workplaces with fewer than 50 regular employees or construction projects with a contract amount under 5 billion KRW were to be subject to the law three years after promulgation.

The industry, which has been requesting a two-year additional grace period due to lack of preparation, is anxious. Once the law is applied, if an unintended accident occurs at a workplace, the business owner cannot avoid criminal punishment such as imprisonment for more than one year. There are appeals everywhere saying, "If the CEO of an SME is detained or sentenced to prison, most businesses face the risk of closure." On the ground, it is argued that if the Serious Accidents Punishment Act is enforced without any grace period, not only confusion will arise but many companies may give up on preparation altogether. While serious accidents must not occur at workplaces, excessive application of the law could turn business owners into criminals and lead to the bankruptcy of companies. The damage would affect not only the companies and business owners but also the employees.

No company disagrees with the point that employees should not suffer harm from workplace accidents. Although there has been two years of time, there are reasons why proper preparation could not be made. Regardless of the will to reduce serious accidents, practical problems have stood in the way. The 830,000 workplaces with fewer than 50 employees nationwide are 12 times more than those with 50 or more employees. While there are many companies, human and financial resources are insufficient. The smaller the scale, the more they struggle with chronic labor shortages and financial difficulties. Information is lacking, and government support has been insufficient. For example, the safety and health management system consulting, one of the support projects, has been conducted for 16,000 companies since February last year, which is only 1.9% of all workplaces with fewer than 50 employees. In this situation, it has become even harder for SMEs to find safety experts after the law’s enforcement. Hiring external consulting costs tens of millions of won. This is why voices are calling for creating an environment where even small business owners can comply before applying the law.

Despite the industry's appeals, the ruling and opposition parties have yet to find a consensus. The Democratic Party has presented prerequisites for passing the bill, including a government apology for inadequate preparation related to the law, concrete plans and financial support for industrial safety, and a promise from the business community that there will be no further extensions. The industry has already promised that if the grace period is extended by two years, they will not request additional extensions afterward. They also pledged to do their best to reduce serious accidents in the industrial field during those two years. Above all, the SME sector insists that a government-wide "Serious Accident Prevention Roadmap for Workplaces with Fewer than 50 Employees" must be prepared to prevent serious accidents. This is to ensure that the Serious Accidents Punishment Act can be properly established in workplaces with fewer than 50 employees in line with government support measures.

Fortunately, the ruling and opposition parties have agreed to hold an extraordinary session in January, allowing additional time for discussions until the 27th. This is the last chance for the political sphere to listen to the desperate appeals of small and micro enterprises.

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