[Newsletter] How Employers Can Comply with the Amendments
to the Labor Standards Act Prohibiting Workplace Harassment

The recent amendments to the Labor Standards Act (“LSA”) prohibiting workplace harassment will become effective as of July 16, 2019 (“Anti-harassment LSA Amendment”). In this regard, the Ministry of Employment and Labor (“MOEL”) has published 「Manual for Determining, Preventing and Responding to Workplace Harassment」(“MOEL Manual”) on February 22, 2019.

The Anti-harassment LSA Amendment focuses on the employer’s responsibility to prevent and respond to workplace harassment rather than directly punishing the harasser.  In particular, the Anti-harassment LSA Amendment requires employers to establish an internal system designed to prevent and respond to harassment.  Therefore, in order to comply with the Anti-harassment LSA Amendment, corporations need to adopt anti-harassment policies in their rules of employment and also prepare detailed anti-harassment manuals before the Anti-harassment LSA Amendment becomes effective. The Anti-harassment LSA Amendment entails considerable compliance efforts from the employers to maintain a harassment free workplace, as set forth below in further detail.

Set forth below are the Statutory Obligations for Employers under the LSA.

1.  Definition and Determination of Workplace Harassment

Under the Anti-harassment LSA Amendment, “workplace harassment” is defined as follows: “an employer or employee inappropriately inflicts physical or mental pain to other employees or disrupts the workplace environment, by abusing his/her status or relations in the company”. According to the MOEL Manual, all interpersonal conflicts are not considered as a workplace harassment but the following key factors should be taken into account in determining whether any act falls under the definition of the Workplace Harassment: ① whether there has been any abuse of one’s dominant position or working relationship at a workplace, ② whether the relevant act is unnecessary for business purposes or improper in the manner of behavior or otherwise beyond the reasonable scope of work in terms of social norms, and ③ judging objectively from a normal average person’s view in the same circumstance, whether the relevant act may cause physical or mental pain to the victim or deteriorates the work environment to certain degree to obstruct the victim’s ability to perform,

2. Anti-Harassment Measures and Procedures

The Anti-harassment LSA Amendment explicitly prohibits workplace harassment and enables anyone to report the workplace harassment to the employer. It also requires employers to include in the rules of employment a list of matters relating to the preventive and remedial measures regarding workplace harassment, such as (i) prohibited acts as harassments in the workplace, (ii) educations for the prevention of the workplace harassment, (iii) procedures to cope with the workplace harassment, (iii) measures to protect the victim, (iv) actions to be taken against the harasser and (v) measures to prevent reoccurrence of any harassments.

Furthermore, the Anti-harassment LSA Amendment imposes on the employer the statutory obligations of investigating immediately when workplace harassment is reported or identified and taking appropriate measures to protect the victim and taking disciplinary actions against the harasser once the investigation concludes that workplace harassment had occurred.  Criminal penalties will be imposed if an employer is found to have fired or mistreated an employee due to his/her reports or claims relating to workplace harassment (imprisonment up to 3 years or a fine up to KRW 30 million).

It is important to have the necessary preventive and remedial anti-harassment measures proactively in place.

1. Why Anti-Harassment Measures are necessary

In the event the employer fails to implement appropriate anti-harassment measures, the employer will not only be found legally liable to the victims but will also incur reputational damages and other tangible and intangible loss. According to the research results of the Korea Research Institute for Vocational Education and Training, the financial loss/cost arising from workplace harassment amounts to KRW 16 million per incident (this figure includes loss of working hours due to the victim’s absence or decline in concentration plus the resulting labor costs for substitute employees), which shows that the comprehensive anti-harassment measures need to be established in advance, in terms of the effective workforce management as well.

2. Anti-Harassment Measures Checklist

Based on the MOEL Manual, we provide below a comprehensive checklist for corporate anti-harassment measures that can be implemented.

During the workplace harassment investigation period, a company can be exposed to various risks such as: (i) damages to the victim’s reputation internally and secondary damages resulting from internal dissemination of the harassment report contents, (ii) issue raising regarding the due process and procedural fairness of the investigation and (iii) reputational damages to the employer due to the disclosure and leakage of unconfirmed facts. In order to mitigate these risks, the investigation procedure needs to be conducted by the designated department or external experts.  By doing so, the employer will be able to respond to subsequent sanctions, legal measures and disputes or litigation with objective evidence such as investigation records procured during such process.   

LAB PARTNERS Labor/Employment team has extensive experience and know-how in advising clients on internal investigations, disputes and litigation in relation to workplace harassment, including sexual harassment.  Through our expertise in internal investigations, we help corporations conduct meticulous fact-finding interviews, analyze legal and corporate risks and determine the appropriate level of disciplinary action.  Should you need further advice on the Anti-harassment LSA Amendment or other aspects of workplace harassment, please contact us.

LAB PARTNERS