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.
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 : 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
(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 : 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 : 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 x deduction of living expenses x the loss of working ability x Hoffmann’s figure 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 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. Fur