The Modern Slavery Act aims to increase transparency in supply chains. Businesses that supply goods or services and have a turnover of £36million or more are affected and will need to prepare a slavery and human trafficking statement for each financial year of the organisation.
With the threshold so high, many UK businesses are of the view that the Act is not relevant to them. However, even if you are not directly affected, your customers or suppliers may be. This means that as you are part of their supply chain they may be looking to you for assurances about your practices. Complying with the regulations therefore puts you one step ahead, your customers know they can trust you, you are more likely to be selected for preferred supplier lists and you appear more legitimate to larger suppliers and customers.
Whether you are affected or not, it is important that you are aware of the following key points:
What is modern slavery?
Modern Slavery is defined by the Act as offences of “slavery, servitude and forced or compulsory labour” and “human trafficking”. The guidance points out that it is difficult to be certain at what point “poor working practices and lack of health and safety awareness seep into instances of human trafficking, slavery or forced labour in a work environment”, but it does highlight where the line is to be drawn. If a worker chooses to work in undesirable conditions, without being forced to and can leave freely without repercussions, this is not seen as modern slavery.
In 2015, 289 modern slavery offences were prosecuted, and there was a 40% rise in the number of victims referred for support. Modern slavery is very much a reality and acknowledging this will help you to avoid it.
As previously mentioned businesses that supply good and services and have a turnover of £36million or more must submit a slavery and human trafficking statement. This statement must disclose:
- What steps have been taken to ensure that human trafficking is not taking place at the organisation or in any of its supply chains, or
- That no such steps have been taken
For more detailed information on what needs to be included in the statement read Annexe E in Transparency in Supply Chains etc. A Practical Guide.
As of yet there are no legal penalties for non-compliance, but there will be significant reputational damage.
Who should be worried?
Those sectors most at risk are hospitality, food processing, construction and manufacturing. However, recruitment agencies that service these sectors must also take note both for their own organisation and that of their client’s.
What you need to do now?
- Identify your organisation’s turnover to see if the Act does apply to you
- Do not forget that the Act can apply to organisations where the profits made are being used for charitable purposes
- Understand your supply chains. This will help you to produce an effective statement if you do comply or if you do not comply yet, helps you to take steps to build yourself as a reputable company to your suppliers and customers
- Know when your business deadlines are. Currently the requirement applies only in respect of financial years ending on or after 31 March 2016
- Begin looking at your contracts with your suppliers and make sure these are sound. You can even insert new anti-slavery provisions if necessary
If your business needs to comply with the Act and you are unsure what to do next, contact our Partner Lee Manning at email@example.com.