Whilst not directly employment law related, we have received a number of queries in relation to The Modern Slavery Act 2015, the final provisions of which are likely to be bought into force this month.
It appears that a number of PR/ business consultancy organisations have launched email campaigns to target companies with a view to engaging their services to comply with their obligations under the Act, so it is very important that you understand whether you are affected before responding to these types of emails.
What is The Modern Slavery Act?
The Modern Slavery Act was introduced to consolidate existing legislation relating to human trafficking and slavery and to introduce a new obligation on larger commercial organisations to prepare a slavery and human trafficking statement each year which sets out the steps which they have taken to ensure that slavery or human trafficking is not taking place within their supply chain or within their own organisation.
High-profile cases in the US, including against Costco in relation to its supply of prawns from Thailand allegedly produced by slave labour and against Nestle in relation to its supply of cocoa from the Ivory Coast produced by child labour graphically illustrate the ills which The Modern Slavery Act is attempting to try to address and, further, the massive brand and reputational risk to a business in being complacent to these concerns.
It is worth noting that the obligation to prepare a slavery and human trafficking statement only applies to organisations with a turnover of more than £36 million per annum.
Businesses which meet the threshold must either:
- Set out the steps which they have taken to ensure that slavery and human trafficking are not taking place within their supply chain or within their own organisation; or
- Make a statement that they have taken no such steps.
Organisations which meet the threshold should start giving serious consideration to how they intend to comply with their obligations as from a reputational perspective taking the approach of publically stating that they have taken no steps to prevent slavery or human trafficking is likely to be highly damaging.
What should a slavery and human trafficking statement contain?
The Government has not prepared a prescribed form for the statement, although there is a suggestion that they will do so in due course; however, they have set out some detail of what the statement may contain:
- Details in relation to the organisation’s structure, businesses and supply chains;
- Its policies in relation to slavery and human trafficking;
- Its due diligence process in relation to slavery and human trafficking in its business and supply chains;
- The parts of its business and supply chains where there is risk of slavery and human trafficking taking place and the steps taken to assess and manage that risk;
- Its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains; and
- The training about slavery and human trafficking available to staff.
What should affected organisations now be considering?
Affected organisations should now be considering:
- Undertaking a risk analysis exercise to identify potential risks of slavery or human trafficking within their supply chains (for example, those organisations who have overseas suppliers will be at an increased risk, particularly those suppliers who are in the developing world as will certain sectors such as food production and clothing retail);
- Undertaking audits of their supply chains and commercial documentation;
- Reviewing and amending their commercial documentation to include specific warranties and indemnities from suppliers confirming adherence to the Modern Slavery Act and associated legislation;
- Introducing auditing processes for suppliers moving forwards;
- Reviewing their internal HR systems to ensure that right to work documentation is in place in relation to all their employees;
- Auditing labour providers (agencies) who provide agency workers to them;
- Reviewing their policies and procedures in relation to equal opportunities and dignity at work to make specific reference to obligations to prevent slavery and human trafficking; and
- Consider specific training for managers in relation to identifying potential signs of slavery/ human trafficking, dependent upon levels of risk identified (for example, employees working particularly long hours, not interacting with colleagues, not being in possession of documents such as their passport and living in inadequate/ overcrowded accommodation may all be ‘red flags’).
The Government has issued some practical guidance on the obligations imposed by the Act, in particular regarding what should be included in the slavery and human trafficking statement. The guidance can be found here.
Specific assistance with drafting the statement is outside of our remit as this is a corporate/ compliance matter (and you should seek specialist advice if you have any concerns); however, we hope that this briefing has given you and your internal compliance team some direction and guidance on how to look to progress matters.