The Modern Slavery Act 2015 is a piece of criminal legislation which might not immediately appear to have application to employers. However buried away in the legislation is a new statutory duty for UK businesses turning over more than £36m to prepare and publish a “slavery and human trafficking statement” for each financial year.
The requirement applies to overseas companies that do business in the UK and also to UK subsidiaries of overseas companies if the UK subsidiary turns over more than £36m. The turnover of UK companies also includes the turnover of their subsidiaries wherever located.
The statement must set out the steps that the organisation has taken to ensure that slavery and human trafficking is not taking place in any of its supply chains or in any part of its own business. Whilst most organisations will be confident that no issues within their own businesses it may be more difficult to be completely satisfied that suppliers and those down the chain are compliant.
If the organisation has taken no steps it is required to make a statement to that effect. Whilst legally acceptable this kind of statement might not be palatable from a PR perspective. A half-way house approach might be to say that the organisation is taking no steps in the current year but that the organisation intends to put a policy into place within a given timeframe.
The statement must be signed on behalf of the board by a director and must be placed on the organisation’s website. The secretary of state has the power to compel organisations to prepare a statement but there are no fines for non-compliance. Nor does the legislation itself contain any sanctions for making an inaccurate or meaningless statements.
Supply chain transparency will be an issue well understood by retailers and other large organisations with large overseas manufacturing operations who have faced consumer pressure in this area for some time. However the requirement applies to all organisations who meet the turnover requirement including those in sectors (such as financial services) with more limited supply chains where the risks may be relatively low.
The requirement is expected to come into force in October 2015. Final statutory guidance is awaited.
In the meantime, organisations may wish to:
The legislation is part of a global trend that we are seeing towards making large business responsible for the employment practices of their suppliers.