Industrial Accident Compensation Insurance Act | Analysis of a Court Judgment Holding That the Act Is Difficult to Apply to an Employee Who Died While Dispatched Overseas

The plaintiffs in this lawsuit were the bereaved family of A, a worker who died while dispatched overseas. A belonged to an affiliate of a domestic large corporation and, under instructions from the company, began working at a local Chinese subsidiary in 2019.

The following year, however, A suddenly collapsed while working and, although taken to a hospital, ultimately died. The cause of death was myocardial infarction.

A few months later, A's bereaved family claimed survivors' benefits and funeral expenses from the Korea Workers' Compensation and Welfare Service, but the Service did not accept the claim.

The reason was that, for A to be covered by the domestic Industrial Accident Compensation Insurance Act, voluntary enrollment as a worker dispatched overseas was required, but A was neither a subject of voluntary enrollment nor had the workplace applied for it.

A's bereaved family therefore filed a lawsuit against the Service seeking revocation of the disposition of non-payment of survivors' benefits and funeral expenses.

The court did not accept the arguments of A's bereaved family.

The court's determination was that the local Chinese subsidiary was a company established under Chinese law and therefore had a separate, independent existence.

The court further explained that A was subject to the rules of employment of the local Chinese subsidiary, was paid by the local Chinese subsidiary, and paid individual income tax in China.

The court also rejected the argument that A had worked under the direction of the headquarters.

According to the court, there were no specific circumstances showing that A had regularly reported work to the Korean headquarters or received direct instructions from it.

In addition, although the headquarters did provide A with certain benefits, such as welfare points, the court added that this was merely a policy intended to prevent employees from avoiding work in China or to encourage such work.

As the number of companies expanding overseas increases, legal disputes over whether industrial accident coverage applies to workers dispatched overseas have likewise become frequent.

In particular, because whether the industrial accident insurance applies may differ depending on whether an overseas assignment is a ‘business trip’ or a ‘dispatch,’ disputes over this point often arise in court.

This precedent holds that, even where a company has a domestic enterprise as its headquarters, a worker cannot be recognized as a subject of the Industrial Accident Compensation Insurance Act if the worker was affiliated with a separate overseas corporation and received salary and work instructions from it.

In the case of the Industrial Accident Compensation Insurance Act, the situations to which it applies are varied and the relevant legal principles are also intricate, so difficulties may arise at the litigation stage.

At Daeryun Law Firm LLP, a team of attorneys with extensive practical experience and expertise provides high-quality legal services in labor and industrial accident matters.

If you have any questions regarding the Industrial Accident Compensation Insurance Act or other labor and industrial accident laws, you are welcome to contact Daeryun Law Firm LLP at any time.