Ignoring Subcontract Payment Order... Fair Trade Commission Refers Saerom Apparel to Prosecutors

Failure to Comply with Delayed Interest Payment Order

[Image source=Yonhap News]

The Fair Trade Commission announced on the 4th that it has decided to file a criminal complaint with the prosecution against Saerom Apparel Corporation and its representative for failing to comply with the order to pay delayed interest on subcontract payments.

In September 2021, the Fair Trade Commission issued a corrective order to Saerom Apparel to pay subcontract payments of 582.69 million KRW and delayed interest of 306 million KRW to subcontractors involved in manufacturing autumn blouses and goose down jumpers.

Saerom Apparel filed a lawsuit to cancel the Fair Trade Commission's corrective order, but the court ruled entirely in favor of the Fair Trade Commission.

However, Saerom Apparel only paid 481.73 million KRW of the unpaid subcontract payments and 126.46 million KRW of the civil delayed damages awarded in the related civil lawsuit, but did not pay 179.83 million KRW of delayed interest calculated under the Subcontracting Act.

The Fair Trade Commission stated, "This action clarifies that the principal contractor’s payment of civil delayed damages to the subcontractor for unpaid subcontract payments does not exempt the obligation to pay delayed interest under the Subcontracting Act. We will continue to closely monitor acts where small subcontractors do not receive their rightful shares and respond strictly to violations of the law."

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