We have all heard horror stories about modern slavery and human trafficking from all corners of the world. For those who haven’t seen it, I highly recommend Lukas Moodysson’s critically acclaimed film ‘Lilja 4-ever’. This is a harrowing tale of the downward spiral of Lilja, a young girl from Estonia who, in that case is sold as a sex-slave in Sweden, but human trafficking is now a massive issue.
The Modern Slavery Act 2015 (‘MSA’) which addresses this challenging area is therefore more relevant than ever. It aims to prevent all and any labour exploitation and to increase the transparency of labour practises and supply chains. As you may already be aware, there is a disclosure duty under section 54 of the MSA which came into force on 29th October 2015, but there is no need to panic. The obligation under section 54 is as follows:
a) it only applies to organisations that have an annual turnover of £36 million and above; and
b) the obligation must be fulfilled within 6 months of the end of the normal financial year; and
c) under transitional regulations, the disclosure duty only applies to financial years ending on or after 31st March 2016.
For the majority of businesses there is therefore quite some time until the first Slavery and Human Trafficking (‘SHT’) statements are due.
If you are required to produce an SHT statement, there is no prescribed form, but the statement must describe the steps taken by your business to ensure that no forms of modern slavery exist in the business or its supply chain. The SHT statement can also include information about five key areas of the business as set out in the government’s guidance, but there is no legal obligation to take any steps to ensure that modern slavery is not taking place. If you haven’t taken any steps, your SHT statement should simply state that no steps have been taken. Inaction may still be ill-advised because you must publish your SHT statement on your company website, which could in turn result in loss of reputation which will inevitably negatively affect the profitability of your business.
So what else is worth noting? Modern slavery takes various forms and affects people of all ages, gender and races. According to the Home Office labour exploitation was the second most common form of modern slavery in the UK after sexual exploitation in 2014. For commercial organisations the most relevant forms of labour exploitation are:
- Bonded labour – this is where the individual is working to pay off a loan, for example, transportation costs from another country.
- Abusive labour – this is where the individual has no work permit and therefore he or she has to undertake any work that is given to them, even if the job is in reality equal to servitude.
In a recent article on Lexology Morgan Lewis & Bockius LLP took the view that the above types of individuals “typically are either provided as agency workers by unscrupulous employment agencies or engaged by suppliers, or subcontractors, not necessarily in the UK, but as part of international labour supply chains. Tarring all employment agencies with the same brush is clearly inappropriate, but the point is made. Employment agencies are affected and I’m sure that the vast majority of you act professionally and according to standards.
Your business may not be caught by the MSA, but your client base might already be reviewing their supply chain. This is an opportunity to sharpen up practices and incorporate MSA compliance with a view to maintaining your competitive advantage.
If you have a burning question about this topic or any other HR or employment law matters please send an email to firstname.lastname@example.org or telephone me on 01273 236236. For those of you that are ARC members don’t forget that you can get in touch via the ARC helpline.