Businesses of all sizes need to be aware of the implications of modern slavery. Erica Dennett explains why even small firms are affected.
The Modern Slavery Act 2015 (MSA) is a groundbreaking piece of legislation setting out a range of measures on how modern slavery and human trafficking should be handled in the UK.
While the act covers a multiplicity of areas, section 54, entitled ‘transparency in supply chains’, impacts the corporate sector and has ramifications for even the smallest of businesses if they are a part of a high value supply chain. Section 54 requires commercial organisations which have a global turnover (including subsidiaries) of £36 million or above and who do business in the UK to publish an annual slavery and human trafficking statement for each financial year ending on or after 31 March 2016. This requirement has a trickle-down effect in that many smaller firms within the supply chain will be expected to comply.
The contents of the statement are not prescribed, but the MSA suggests it should include steps taken to ensure human trafficking is not present in any of its supply chains or business interactions, or conversely, a statement that the business has taken no such steps. This must be published in a prominent position on the company’s website.
What practically do businesses need to do to comply?
- If a business has a global turnover of £36 million and over and carries out any business in the UK, then the statement will need to be issued annually. This statement need not be long but should set out the organisation’s commitment to preventing slavery and human trafficking. It needs to be approved by the board of directors and should also detail how these processes are communicated to staff.
- Businesses should embark on regular, compulsory, staff training on the organisation’s internal anti-slavery and human trafficking processes.
- The staff handbook and other relevant policy documents should be updated to make reference to the organisation’s policy on anti-slavery and human trafficking.
- The organisation’s own practices should be frequently reviewed and if more ethical options exist, consideration should be given as to whether the benefits and goodwill received as a result of adopting them might be beneficial.
- Lastly, organisations should consider whether to include wording in supply chain contracts prohibiting the use of forced or trafficked labour – it is this provision that may require smaller businesses to comply with points 1-4.
What happens if businesses do not comply with section 54?
In theory, the Secretary of State could force a statement to be made through an injunction. However, stakeholder pressure is expected to be sufficient to encourage compliance.
Recognising all businesses have a significant role to play in tackling slavery and human trafficking is a positive shift but this is just one step within the broader human rights framework.
By Erica Dennett, partner and head of employment at Cripps