“Disease is also an industrial accident…Why can’t business owners fight it?” [Daeryun’s Biz law forum]

Excluded from being reflected in the ‘occupational disease’ rate
Business owner, controversy over benefits in lawsuit over approval disposition
The system has changed, but court decisions are mixed

If an employee gets injured or gets sick while working at the workplace, business owners have no choice but to fear that there will be disadvantages to their business and that industrial accident insurance premiums will rise. The increase in insurance premiums due to industrial accident treatment is related to the ‘individual performance rate’. If the ratio of the total amount of industrial accident insurance benefits (industrial accident insurance benefits) paid for industrial accident treatment exceeds 85% compared to the total amount of industrial accident insurance premiums paid over the past three years, the industrial accident insurance premium rate is increased.

In the past, industrial accident insurance benefits paid for occupational diseases were also considered when calculating industrial accident insurance premium rates. Because of this, business owners had an incentive to conceal industrial accidents to avoid premium surcharges. Following the revision of the Enforcement Decree of the Act on Collection of Premiums for Employment Insurance and Industrial Accident Compensation Insurance (Enforcement Decree of the Employment Insurance Premium Collection Act) on December 31, 2018, industrial accident insurance premiums paid due to occupational diseases were changed to not be considered in calculating industrial accident insurance premium rates. This is to prevent employers from increasing industrial accident insurance premiums by recognizing industrial accidents as occupational diseases.

According to the revised enforcement ordinance, from January 1, 2019, there appears to be no disadvantage to employers even if occupational diseases are recognized as industrial accidents. For this reason, some recent lower court rulings (Seoul Administrative Court 2022-gu Hap 64232 decision, Seoul Administrative Court 2024-gu Hap 78122 decision, etc.) are dismissing lawsuits for cancellation of industrial accident dispositions by employers, believing that they have no legal interest in contesting the Korea Workers' Compensation and Welfare Service's decision to approve industrial accidents for occupational diseases. The basis for the lower court rulings is generally as follows.

① Dispositions approved by the Korea Workers' Compensation and Welfare Service for industrial accidents are aimed at workers or their surviving family members, and do not target employers directly.
② According to the Enforcement Decree of the Revised Employment Industrial Accident Insurance Premium Collection Act, even if industrial accident insurance premiums are paid due to occupational diseases, the industrial accident insurance premium does not increase because it does not affect the individual performance rate of the employer.
③ The fact that the total amount of industrial accident insurance benefits for the type of business to which the business owner belongs increases due to the approval of industrial accident compensation for occupational diseases, thereby increasing the rate for each industry, does not mean that the business owner has a direct or legal interest.
④ Even if there is an industrial accident approval for an occupational disease, the employer can claim and prove that it is not an occupational disease in a lawsuit such as a claim for damages filed by an employee or his or her surviving family member against the employer.

However, even if an employer's industrial accident insurance premium does not increase due to the industrial accident approval for an occupational disease, there are still lower court rulings that believe that the employer still has a legal interest in contesting the industrial accident approval.

In a lawsuit filed by a worker against the Korea Workers' Compensation and Welfare Service seeking cancellation of the Corporation's disapproval of an industrial accident, the lower court ruled that the employer had a legal interest in whether to cancel the disapproval of an industrial accident and allowed the employer's assistance (Seoul Administrative Court 2022guhap54405 decision). When the Korea Workers' Compensation and Welfare Service approved the industrial accident for an occupational disease that occurred on February 7, 2019, the employer responded. In a lawsuit seeking cancellation of the disposition against the Korea Workers' Compensation and Welfare Service, the lower court ruled that the business owner had a legal interest in seeking cancellation of the disposition (Seoul Administrative Court 2019 Gudan 71113 decision cited the employer's claim, and the Seoul High Court's 2023nu40993 decision, the appellate court in this case, dismissed the employer's claim. This case was confirmed by the Supreme Court by dismissal of the appeal).

Even if occupational diseases are excluded from the record of industrial accidents, employers should be considered to have a legal interest in contesting the Korea Workers' Compensation and Welfare Service's approval of medical care benefits for occupational diseases. The specific grounds are as follows.

① Even if the insurance benefit amount determined to be paid for an occupational disease is not reflected in the ‘individual rate performance’ calculation of the industrial accident insurance benefit amount, it may be reflected in the industry-specific rate of the industry to which the business owner belongs. Ultimately, there is room for individual business owners' insurance premiums to also rise.
② In reality, the Korea Workers' Compensation and Welfare Service's decision to approve medical care benefits for occupational diseases serves as a strong basis for acknowledging the basic facts in a claim for compensation filed by an employee against an employer. Regarding the effectiveness of an administrative act that is a prerequisite, the Supreme Court said, "No matter how illegal an administrative disposition is, no one can deny its effect on the grounds of its defect, except in cases where the defect is so serious and obvious that there are reasons to consider it invalid. The fair power of such an administrative act is not the same as the res judicata of a judgment, but when a defect in an administrative act that falls within the objective scope of the fair power is only a reason for cancellation, the effect of the disposition is denied and the resulting benefit is It has taken a consistent position that “it cannot be said to be a gain without cause under the law (Supreme Court ruling 2006 Da83802).” If it is impossible to cancel the Korea Workers' Compensation and Welfare Service's decision to approve illegal medical care benefits, it will be realistically difficult for the employer to assert that the disease is not an occupational disease due to the fairness of the administrative disposition in a damages claim lawsuit filed by an employee against the employer due to an occupational disease.
③ If the Korea Workers' Compensation and Welfare Service is unable to contest the decision to wrongly determine whether an occupational disease exists, the worker's death falls under industrial accidents and serious accidents under subparagraphs 1 and 2 of Article 2 of the Occupational Safety and Health Act. Employers are required to report to the Minister of Employment and Labor (Article 54, Paragraph 2 and Article 57, Paragraph 3 of the Occupational Safety and Health Act), and if they violate this, they are subject to a fine of up to 30 million won (Article 175, Paragraph 2, Subparagraph 2 of the same Act). If the Minister of Employment and Labor orders an employer to establish and implement a safety and health improvement plan, the employer will be subject to disadvantages such as having to comply with the order (Article 56, Paragraph 2 of the same Act).

According to the 2024 Judicial Yearbook published by the National Court Administration, there were a total of 8,506 cases sentenced in the Seoul Administrative Court in 2023, of which 1,100 cases had at least part of the plaintiff's claim cited. These statistics show that the citation rate in administrative litigation is relatively low.

In this situation, if a litigant is not even recognized as qualified to stand trial, he or she may have to endure realistic disadvantages. This will come as a big regret to the parties concerned.

The side effects of recognizing too broad plaintiff qualifications in administrative litigation should be fully considered, but at the same time, judicial procedures for redressing people's rights should not be excessively restricted. We hope that the difference in position between the lower court's ruling on the suitability of the plaintiff in the suit to cancel the approval of medical care benefits will be resolved as soon as possible so that both employers and workers can be guaranteed their fair rights.

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"Disease is also common... Why can't business owners fight?" [Daeryun’s Biz law forum] (Shortcut)