November 2015 – Modern Slavery Act 2015

19th November 2015

The Modern Slavery Act 2015 now requires large businesses supplying goods and services and with an annual global turnover of £36m or more to report annually on the steps they have taken to ensure that their business and supply chains are free from slavery or human trafficking. The statement requires board approval and must be signed by a director. Affected businesses need to act now to ensure the new rules are integrated into existing risk management, due diligence and supply chain management procedures. The importance of getting it right, both from a legal and reputational perspective, cannot be overstated.

What is slavery and human trafficking?

Modern slavery is a criminal offence. It includes forced or compulsory labour and human trafficking and includes situations where someone’s liberty is taken away in order to exploit that person for personal or commercial gain.

What must the annual statement include?

The Modern Slavery Act requires companies to make an annual statement setting out the steps it has taken to ensure that modern slavery does not exist in its business and supply chains either in the UK or overseas. The statement can simply say that the organisation has taken no such steps although this is clearly not advisable. The statement must be approved by the Board and signed off by a director and must be published on the company’s website via a ‘prominent’ link on the homepage.

What steps should affected businesses be taking?

Modern slavery and human trafficking is a recognised problem in the UK and overseas. The reputational risks involved in a slip up are potentially serious. Although the requirement to produce a statement only applies to large businesses there is a lot to be said for smaller and medium sized businesses adopting the following HR-based safeguards:

• Introduce an anti-slavery and human trafficking policy setting out a ‘zero-tolerance’ approach to slavery and trafficking.
• Identify one director or senior manager who will be responsible for monitoring and implementing the policy.
• Ensure that management receive training on the issue of modern slavery in supply chains and that they understand what to do if they suspect it is happening. In particular, managers at the ‘coal-face’ and those with operational responsibility for overseas supply chains must receive clear and practical training.
• Decide how concerns should be raised in your workplace. An existing whistle-blowing policy may be the best procedure to follow.
• Ensure that training on the anti-slavery and trafficking policy is included in induction procedures.

This is an area where HR will be working in conjunction with other areas of the business to ensure an organisation-wide approach.  For example, it will be important to audit current risk management and due diligence procedures as well as supply chain relationship management procedures. It may be necessary to introduce supplier codes of conduct or introduce new terms into existing supplier contracts.

Please click here to see our Modern Slavery Act checklist.