A Fatal Occupational Accident in Korea
and Workers’ Compensation Rights

Bongsoo
Jung (Labor attorney, KangNam Labor Law Firm)

 

I. Introduction

In October 2015, the Seoul International
Fireworks Festival was held at the Han River Park and provided a fantastic show
and good memories for many. However, during the night just before the fireworks
began, a daily worker (hereinafter referred to as “the deceased worker”) drowned
while working on preparations for this event. 
While the deceased worker was moving laser equipment for the fireworks
from a boat to a barge, he lost his balance, fell into the water and died. The
deceased worker was hired as a daily worker by the company that would operate
the laser equipment (hereinafter referred to as “Company A”), which in turn was
in a subcontract with the primary contractor (hereinafter referred to as
“Company B”) in charge of the whole fireworks project. In addition, the boat
where the accident happened belonged to a third company (hereinafter referred
to as “Company C”).

A funeral could not be held due to
disputes with the surviving family, so the president of Company A visited
KangNam Labor Law Firm and asked for its assistance in resolving this occupational
accident case. This labor law firm, representing Company A, explained the legal
responsibilities to each party and successfully helped them to reach an
amicable settlement. Here, I would like to explain how the claims in this occupational
accident were resolved, and the legal points of the disputes.   

 

II. Facts

On Saturday October 3, 2015, the
Seoul International Fireworks Festival 2015 was held at the Han River Park in
Yeouido. Company A had entered into a subcontract with Company B (presiding
over the fireworks for the festival), and was engaged in leasing, installing
and operating the laser equipment. Company A had hired the deceased worker as a
daily worker to be paid a daily rate of 100,000 won from September 29 to
install the laser equipment. The deceased worker had been working on this
installation with the president of Company A from 2 pm to late night on Friday,
October 2. At 10:30 in the evening, three persons (Company A’s president, the
deceased worker, and another employee) were moving the laser equipment from a 5
meter-long boat to a barge floating on the river between Wonhyo Bridge and the Han
River Train Bridge near Yeouido. While the deceased worker was lifting the
laser equipment from the motor boat to the barge, he lost his balance and fell into
the water. An underwater search begun very shortly after by the police failed
to find him. It was only on Sunday October 4, at 8:30 am, that his body was
found floating near the Han River Park (Yeouido area) and recovered by the
police.

The deceased worker was unmarried
at the time of death, and did not live with any family members. His parents
passed away years ago, and he is survived only by a brother and a sister. On
November 6, 2015, the surviving family reached a settlement with the president
of the contractor, Company B, and the president of the subcontractor, Company
A. The total amount of compensation came to 260 million won, with the surviving
family applying for part of that compensation to the Industrial Accident
Compensation Insurance (IACI) Agency directly, with the remainder (totaling 150
million won) to be paid by Company A and Company B to the surviving family no
later than November 10, 2015.

 

III. Responsible
Parties for Survivor’s Compensation

Company B,
responsible for the fireworks project, had exclusively subcontracted the related
laser operations to Company A. The daily worker, working for Company A but
while moving laser equipment from a boat belonging to Company C, fell into the
water and drowned. In this case, who is considered responsible as the employer?

Article 90
(Exception to Subcontracted Work) (1) stipulates “If a business is operated based upon
several tiers of subcontracts, the primary contractor shall be regarded as the
employer for purposes of accident compensation.” For occupational accidents,
the employer who hired the employee shall be responsible as the employer with
the duty of ensuring safety. However, for construction projects, the primary
contractor is charged with general responsibilities of safety and health
regarding the safety facilities, safety nets, etc. required by the Occupational
Safety and Health Act. Accordingly, in cases where the primary contractor does
not fulfill its safety responsibilities, the primary contractor shall have the first
obligation to provide compensation.^[1]

In this case, Company
A, which had hired the deceased worker directly shall be first responsible as
his employer. Provided, as Company A was a subcontractor assigned to part of
the fireworks project by the primary contractor, as Article 90 of the Labor
Standards Act (Exception to Subcontracted Work) states, the primary contractor shall be responsible
for compensation for damage. Accordingly, Company A and Company B shall hold
joint responsibility. In reality, it was agreed that Company A was responsible
for the IACI’s obligation, while Company A and Company B were both obligated to
cover any amount exceeding IACI compensation. On the other hand, as the
deceased worker had fallen to his death from a boat operated by Company C, the
surviving family may have legal claim separately against Company C. It was thus
agreed that the elements related to Company C could be handled separately from
this particular case. 

 

Ⅳ. Details of Compensation for Damages & Determining Settlement Amount

It is essential to
calculate substantial amounts for compensation under the IACI Act and for
compensation for damages from civil claims to reach an amicable
settlement.  Through accurate calculation
of compensation, the amounts the surviving family could claim and the
proportion to be covered by the related companies can be understood.   

 

1. Calculation of
compensation for damages under the IACI Act

(1) Basic data

   - Average daily wage: 73,000 won (daily wage
100,000 x 0.73: Applying to daily worker’s average working rate)

(2) Compensation under the IACI Act: 104,712,340 won

   - Survivor’s compensation: One day’s average
wage x 1300 days =

73,000 x 1300 = 94,900,000 won

   -
Funeral allowance^[2] : One
day’s average wage x 120 days =

73,000 x 120 = 8,760,000 won.

The minimum official funeral allowance for 2015 is 9,812,342 won.

 

2. Compensation for
damage through civil claims^[3]

(1) Basic data

1) Date of birth: May 13, 1972     2) Date of accident occurrence: October 4, 2015 (43 years, 4 months, 21 days)     3) 1 day’s average wage: 73,000 won (daily wage 100,000 x 0.73: Applying to daily worker’s average working rate  4) Standard unit of wage[4]: 102,144 won (based upon a supporting worker’s standard unit of wage in the second half of 2015) 5) End of expected working period[5]: May 12, 2032 (199 months of potential working life remaining between the date of death to 60 years of age)

 

(2) Substantial
calculation

1) The deceased
worker’s lost wages

  
○ Between the date of death to 60 years of age (100% in terms of lost
working ability)  

     - Standard unit
of wage for supporting worker x 22 days^[6] x deduction
of living expenses^[7]
x the loss of working ability x Hoffmann’s figure^[8] from his death to
60 years

  
  - 102,144 won x 22 days x (1-1/3) x 100% x
144.7001 = 216,776,956 won

- 20% deducted due to mistakes
made by the deceased worker:

216,776,956 won x 80% =
173,421,564won

2) Compensation for emotional
damages

- 100,000,000 won^[9]
x 100% (Loss of working ability) x [1-(mistakes by the victim x 0.6)]

- Deducting 20% for victim’s
actions brings this number to 88,000,000 won.

3) Compensation
through civil claims: The deceased worker’s lost wages (173,421,564
won) + Compensation for
emotional damage (88,000,000 won)

=
261,421,564 won

 

3. Further details on reaching settlement   

It was important to accurately
calculate the compensation according to the IACI Act and compensation through
civil claims in order to reach a settlement between the surviving family and
Company A & Company B. Total compensation for this occupational fatality
was calculated as 261,421,564 won, which included 104,712,342 won in compensation
to be claimed under the IACI Act. The surviving family, Company A and Company B
negotiated with one another and finally agreed that Company A and Company B
would pay 150 million won directly to the surviving family, while the surviving
family would apply to the IACI Agency directly for the remaining compensation.^[10]  This agreement stipulated that after the
related companies had paid the agreed compensation, the surviving family would take
no further civil, criminal, or administrative action against them. In addition,
the surviving family promised to submit a petition to the relevant
administrative offices to reduce the criminal charges against Company A and
Company B.

 

Ⅴ.
Content of Settlement (Settlement Agreement)

1. Parties to Agreement

1)
Party A: Subcontractor (Company A) and Contractor (Company B)

2)
Party B: Deceased worker’s siblings (brother and sister)

2. Details of the accident: -omitted-

3. Content of the settlement

1)
Party A will pay Party B 150 million won as settlement (excluding compensation under
the IACI Act) and compensation for emotional damages claimed under civil and
other laws, to the bank account designated by Party B. Party B will apply for
and receive compensation (Survivor’s compensation and funeral allowance) under
the IACI Act from the Korea Workers’ Compensation and Welfare Service.  

2)
Since Party B amicably agreed with Party A on the above settlement for claims
by Party B and other relatives (lineal blood relatives, collateral blood
relatives, other relatives), Party B will not make any civil or criminal claims
such as filing of complaints, additional compensation, lawsuits, or any other
type of claims including for unexpected items at the time of agreement
regarding this accident in the future, and waive any claims regarding this
accident against Party A. 

3) Since the settlement in the above Article (1) includes
all compensation for emotional damages to Party B’s other relatives (lineal
blood relatives, collateral blood relatives, other relatives), Party B will be
responsible for any particular person among Party B’s other relatives making
complaints or other claims against Party A or persons related to Party A.

4)
As Party A and Party B have reached settlement amicably, Party B confirms that
Party  A and Party A’s employees related
to this accident will not receive criminal charges, and if necessary, Party B
will cooperate in submitting this intention to the related agencies.

5)
Party B confirms that this settlement agreement has been concluded with sincere
intentions after understanding all situations sufficiently on equal footing, without
fraud, coercion, or mistake.

6) Party A and Party B shall compose four copies of the
settlement agreement, print and sign their respective names on each copy, and
keep one copy each after notarization of those copies, in order to certify
this settlement agreement.

 

Ⅵ. Conclusion

Two lessons presented themselves in the course of resolving the claims from
this occupational accident. The first is the importance of industrial safety.
This occupational accident occurred through the failure to have safety measures
at the workplace, and could have been avoided if the deceased worker had worn a
life jacket while on the boat. The second is the importance of having an expert
resolve the complicated interests and disputes in an occupational accident.
This labor attorney was able to explain the legal obligations to the respective
parties, propose appropriate compensation, and successfully persuade each party
to reach agreement on a settlement.