Samsung Heavy Industries’ ‘pre-build post-contract’…Subcontract abuse recognized

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When Samsung Heavy Industries received a rectification order for violating the Subcontract Act, which announced subcontract work after the subcontract work had begun, it lost the lawsuit it protested.

According to the legal community on the 25th, the Administrative Division of the Seoul High Court 6-2 (Chief Judge Wi Kwang-ha Hong Seong-wook Choi Bong-hee) recently ruled against the plaintiff in a lawsuit against Samsung Heavy Industries to cancel the correction. order against the Fair Trading Commission.

Between 2014 and 2015, Samsung Heavy Industries outsourced a total of 696 ship processing tasks to subcontractors, including painting. However, Samsung Heavy Industries received a remedial order from the Fair Trading Commission, stating that it was in breach of the Fair Subcontract Transactions Act (Subcontract Act) by failing to issue a contract before work began.

Article 3, Paragraph 1 of the Subcontracting Act stipulates that when a main contractor entrusts manufacturing, etc. to a subcontractor, that a document must be issued before the work begins. The purpose of this is to clarify the contents of the contract in advance so that the main contractor does not verbally sign a sub-contract and withdraw the contract before starting the work.

Samsung Heavy Industries said, “In 692 cases out of a total of 696 cases, internal approval of the contract application was completed before subcontract work began.” However, the court’s decision was different.

The court ruled that 619 cases for which correction orders were issued three years after receiving the subcontractors’ report and 8 cases of subcontracts for minor corrections and minor corrections made unavoidably during work should be excluded from the correction order. However, the correction procedure was maintained for the remainder of the work contract.

The court ruled that “the Subcontracting Act states that both the main contractor and the subcontractor must have written signatures,” and that the purpose of the contract is to clarify the contents of the contract in case the main contractor withdraws return or change the contract. Therefore, he added, “The documents were only released when the subcontractors completed electronic verification.”

The court said, “The illegality of the act, such as the plaintiff asking the subcontractor to delete data in order to hide the violation of the Subcontracting Act, is great, and it is feared that the same act may have repeat it in the future. by concealing a breach of the Subcontracting Act.”

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