November 7, 2016
Are you using slaves in your supply chain? [UPDATED]
In March 2015 the introduction of the Modern Slavery act consolidated and improved our modern laws of human trafficking, slavery or forced labour committed by UK nationals or companies.
So what does it mean to you?
The Modern Slavery Act 2015 – What do I have to do?
Larger employers are now required to produce annual modern slavery statements
Section 54 of the Modern Slavery Act 2015 introduces a statutory requirement to produce an annual “slavery and human trafficking statement”. Only larger organisations with an annual turnover of £36 million or above need to do this.
There will be transitional provisions so that statements are not required where a business’s financial year ends close to the date on which the duty comes into force.
Modern Slavery Act 2015
The Act introduces a variety of changes to UK anti-slavery measures, including the consolidation of offences relating to slavery and human trafficking. Although there is a need for larger businesses to prepare an annual modern slavery statement, .the legislation has a broader impact potentially affecting many organisations.
Corporate Social Responsibility
Many organisations, including small and medium sized businesses, produce ethical corporate social responsibility statements on various subjects. This may now include their position on human trafficking and modern slavery. However, this is not a statutory obligation.
The new provisions follow a model adopted in California, where certain employers must post a notice that contains information regarding slavery and human trafficking.
Affected UK businesses will need to address how this is integrated into their existing risk management systems, how they undertake due diligence, their supply chain relationships and planning for appropriate Board/director sign off.
Organisations should not underestimate how significant this legislation may be. Not least is the potential impact on their public reputation, as this will be an iterative process every year.
The Government has promised to provide statutory guidance on how to produce a slavery and human trafficking statement in October 2016, but as yet this has not emerged.
Businesses that responded to the Government’s public consultation asked for the guidance to include ‘a clear steer on when a statement should be published, advice on where it should be published and ideas as to how modern slavery could be identified’.
So What Should a Statutory Statement Include?
Section 54 of the Modern Slavery Act 2015 states that the employer’s slavery and human trafficking statement might include information on:
- its structure, business and supply chains;
- its policies in relation to slavery and human trafficking;
- its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
- the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps that it has 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, measured against such performance indicators as it considers appropriate, and:
- have training about slavery and human trafficking available to its staff.
This is commercial legislation so there is no direct employment law impact, however we have produced some model clauses that can be added to the equalities and diversity provisions in your employee handbook.
They are broadly based on principles developed by the United Nations and the Institute for Human Rights and Business (The Dhaka Principles). You can use this wording to amplify good recruitment and employment principles and to set out your organisation’s opposition to people trafficking and 21st century slavery. It does not, in itself, address the new statutory obligations larger businesses now have.
It may be helpful if you trade internationally or have a relationship with public services, the voluntary or charitable sectors. It may also be useful if you are likely to be asked about your position in tendering documents.