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06 Jul 2015

Modern Slavery Act 2015 – Time to prepare


Employment alert email

Parts of the much-publicised Modern Slavery Act 2015 - the new legislation designed to combat slavery in the UK - come into force today. Amongst the new provisions are increased sentences for those involved in human trafficking and additional powers for courts to impose restrictions on those suspected of involvement.

While other sections of the Act do not come into force until later in the year, businesses should be preparing now to ensure compliance.

Supply chain transparency
A less well known provision of the Act is due to come into force in October and will require commercial organisations that:

(a) supply goods or services;
(b) have a global turnover of £36 million; and
(c) carry on business in the UK, wherever they are incorporated or formed;
(d) to prepare a slavery and human trafficking statement (a "Statement") each financial year, stating the steps they have taken to ensure their business and supply chains are slavery free. The statement will need to be approved by the board of directors (or partners or LLP members) and published prominently on the organisation's website. Failure to comply could lead to enforcement action being taken by the Government in the form of an injunction.

What is slavery?
For the purposes of the Statement, slavery and human trafficking includes slavery, servitude, forced or compulsory labour and human trafficking where those activities would constitute an offence if they took place in the UK. We anticipate that these terms will be broadly interpreted and may have unintended consequences such as having an impact on the use of unpaid interns.

Content of the Statement
The statement will have to include:

(a) an account of the steps the organisation has (or has not) taken during the financial year to ensure that slavery and human trafficking is not taking place in any of its business or supply chains;
(b) the policies the organisation has in place in relation to slavery and human trafficking;
(c) its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
(d) the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place and the steps it has taken to assess and manage that risk;
(e) 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
(f) the training on slavery and human trafficking available to its staff.

What should we be doing now? Further details of the duty and guidance on its scope are still to be published by the Government, and there will be transitional provisions for those whose financial year ends shortly after the provisions are introduced. However, organisations carrying on business in the UK with a turnover above the £36 million threshold can start preparing now by doing the following:

(a) appointing an appropriate person to be responsible for compliance;
(b) ensuring that staff, particularly those involved in recruitment, procurement and supply chain management, are aware of the new requirement and are appropriately trained to make the right enquiries of potential suppliers;
(c) reviewing supply contracts to ensure suppliers have appropriate safeguards in place;
(d) considering the introduction of a slavery and human trafficking policy.

This new obligation is potentially onerous and, while organisations will be entitled simply to say in the Statement that no steps have been taken, this is likely to be unattractive for reputational reasons. Early preparation will be key to full compliance.


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