The Korea Herald


[Law Talk] More questions than answers: Who is the ‘responsible executive’ under the Serious Accidents Punishment Act?

By Korea Herald

Published : Aug. 16, 2021 - 16:51

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Kim Jae-ok (left) and David Park Kim Jae-ok (left) and David Park
Under the highly controversial Serious Accidents Punishment Act, which was codified by the National Assembly in January this year, business owners and responsible executives are required to comply with new health and safety obligations. A failure to comply with such requirements that results in serious bodily harm will subject them to significant civil liability and administrative/criminal penalties.

The introduction of the act is seen as a legislative effort by the South Korean government to address public concerns and criticism in relation to numerous high-profile industrial accidents and public disasters that have occurred in recent years.

Despite the government’s good intentions, the broad strokes of the new legislation have resulted in many gray areas that have caused confusion and widespread debate throughout the business community. One of the most contentious issues is the ambiguity regarding the definition of a “responsible executive,” who bears the heaviest obligations and consequent criminal liabilities.

To understand the meaning of “responsible executive,” we turn to how existing laws determine who is accountable for an occupational accident.

Under the Occupational Safety and Health Act, Korea’s fundamental workplace health and safety legislation, the “business owner” is obligated to undertake safety and health measures to maintain and promote workers’ safety and health.

Furthermore, the business owner is personally responsible if that obligation is violated. Courts have determined the responsible individual on a case-by-case basis and generally ruled that in large companies with many business locations, the person who was responsible for the specific workplace/location where the accident occurred was criminally liable. High-ranking executives have been able to easily avoid criminal liability even in cases of “professional negligence resulting in injury” or “professional negligence resulting in death” because courts have denied a finding of “professional negligence” from a mere violation of a general and abstract duty of care. Hence, businesses have structured their chain of command in a way that minimizes the involvement of high-ranking executives in safety management to protect them from potential criminal liability.

To close that loophole in the existing health and safety laws and encourage the top management of companies to exercise companywide leadership regarding safety and health matters, the act defines a “responsible executive” as (i) a “person authorized and responsible for representing and supervising a business, or (ii) a comparable individual who is responsible for safety and health matters of a business.”

First, a “person who is authorized and responsible for representing and managing a business” refers to a person who represents the business externally and manages and enforces the implementation of the business internally. The representative director typically fits this description; however, whether the person has substantial authority and responsibility will be determinative, not their nominal title or position. If there is more than one representative director, the person who has the ultimate authority and responsibility for the overall business operations may potentially fall under this definition. However, the possibility of a finding that multiple executives are jointly and severally liable for failure to secure health and safety under the act cannot be ruled out.

Second, a “comparable individual who is responsible for safety and health matters” refers to a person who has the authority to make final decisions regarding the health and safety management system. An executive responsible for health and safety and an executive responsible for production are typical examples. On the contrary, a factory manager or site manager, who is generally granted such responsibility at a certain workplace, is unlikely to be deemed the responsible executive because their responsibilities are limited to a certain workplace, not the entire business.

The most fiercely disputed and unsettled issue in connection with the definition of a responsible executive is how to interpret the conjunction “or” that connects (i) and (ii) above. This is particularly troublesome when a business has both a representative director and an executive who is authorized to manage safety and health matters. If “or” has an exclusive meaning, the provision will likely relieve the representative director from criminal liability. On the other hand, if “or” has an inclusive meaning the representative director will likely still be liable even if there is an executive who is responsible for health and safety matters.

The act contains numerous ambiguities, which are likely to cause considerable confusion in the early stages of enforcement, and the question of “who is the responsible executive” will continue to be raised in most cases. Therefore, it is imperative for businesses to pay close attention to developments in the interpretation and application of the act going forward to mitigate risks and ensure proper compliance.

By Kim Jae-ok and David Park

Kim Jae-ok is a partner at Yoon & Yang, with expertise in criminal law and occupational safety and health, and David Park is an Australia (New South Wales)/New Zealand-qualified attorney at Yoon & Yang, with expertise in the areas of corporate law, dispute resolution, and employment and labor law. -- Ed.