How will the Modern Slavery Act affect you?
Karen Plumbley-Jones, September 09, 2015
In 2013 1,746 cases of slavery were reported in the UK and it is estimated to affect 29.8 million people worldwide
In 2013 1,746 cases of slavery were reported in the UK and it is estimated to affect 29.8 million people worldwide. The government has introduced the Modern Slavery Act to tackle the issue by consolidating various criminal offences relating to human trafficking and slavery, and by introducing a provision for transparency in supply chains.
From October 2015 commercial organisations with a turnover of £36 million or more that do business in the UK will have to prepare a slavery and human trafficking statement each financial year, explaining the steps they have taken to ensure their business and supply chains are slavery-free, or stating that they have taken no such steps. The statement will have to be published on the organisation's website, with a prominent link to it on the home page.
What is meant by slavery and human trafficking?
Slavery is where ownership is exercised over a person and human trafficking concerns arranging or facilitating the travel of someone with a view to exploiting them. Servitude and forced or compulsory labour are also covered; these are the obligation to provide services imposed by coercion, and work or service exacted under the menace of a penalty for which the person has not offered themselves voluntarily.
Who is affected?
The requirement to publish a statement will apply to commercial organisations that supply goods or services and have an annual worldwide turnover of £36 million or more. 'Commercial organisations' means companies (both listed and private) and partnerships, wherever they are incorporated or formed, that carry on a business or part of a business anywhere in the UK. 'Business' includes a trade or profession and foreign organisations will be included if they operate in the UK. The government estimates that the new duty will affect more than 12,000 UK businesses.
How will the Act be enforced?
The home secretary will be able to enforce the duty by applying for an injunction in the High Court requiring the organisation to comply. Normally a failure by an organisation to meet the terms of a statutory duty leads to prosecution and a fine. Injunctions will probably only be sought against high-profile organisations, in order to publicise the Act and increase compliance. It is likely that investors, other businesses, consumer groups and consumers will effectively police the duty by choosing not to deal with businesses that do not comply fully.
Next steps – when will the Act be in force?
The government has stated that the duty will come into force in October, subject to parliamentary scrutiny. Transitional provisions will apply to businesses whose financial years end near this date. Draft regulations that specify how total turnover is to be calculated are expected soon. The Home Office is working on guidance for organisations, which will include advice on the information to be included in the statement and what falls within supply chains. This will be published before October.
How organisations can start preparing for the Act now
Businesses should appoint someone senior to be responsible for compliance, and start carrying out due diligence in relation to their UK and overseas suppliers in order to assess and manage the risks. They should consider introducing a slavery and human trafficking policy and providing training to staff in supply chain management and procurement teams.
Karen Plumbley-Jones is a practice development lawyer at Bond Dickinson. She specialises in employment law