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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] South Korea’s antitrust regulator, the Fair Trade Commission, has imposed penalties on construction firms for unfair subcontracting practices that shifted all costs and liabilities related to industrial accidents onto subcontractors.
The regulator announced on May 17 that it issued corrective orders and fines totaling KRW 729 million against KR Industry, Dasan Construction Engineering, and NC Construction for violations of the subcontracting law.
The fines were set at KRW 257 million for KR Industry, KRW 312 million for Dasan Construction Engineering, and KRW 160 million for NC Construction. In addition, NC Construction was fined KRW 5 million for issuing contracts that omitted required details related to subcontract payment linkage.
The enforcement action follows an ex officio investigation launched in July last year to address widespread practices in the construction sector where prime contractors transfer safety management costs and responsibilities to subcontractors.
According to findings, the companies included contract clauses requiring subcontractors to bear full civil and criminal liability for workplace accidents, as well as costs related to dispute resolution and compensation.
The FTC determined that such clauses constituted an abuse of superior bargaining position, particularly in dealings with smaller subcontractors that often lack adequate safety management capabilities.
The regulator emphasized that these practices improperly shifted responsibilities that should be borne by prime contractors, undermining fair trade and safety standards in an industry where industrial accidents remain a significant concern.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
