Law

Modern Slavery Act 2015

By Merrill April, Sarah Martin and Lara Shillito, Memery Crystal

“As I often say, we have come a long way from the days of slavery, but in 2014, discrimination and inequality still saturate our society in modern ways.”
Reverend Al Sharpton.

Modern slavery encompasses slavery, forced and compulsory labour and human trafficking. The Modern Slavery Act 2015 was passed in March 2015 (the “Act”) with the aim of providing law enforcement agencies with further means to tackle modern slavery.  

Section 54 of the Act introduces a new duty for large commercial organisations which supply goods or services to prepare a slavery and human trafficking statement for each financial year. The statement will need to include:

1. the steps that the organisation has taken to ensure that slavery and human trafficking is not taking place in any of its supply chains or in any part of its business; or

2. that no such steps have been taken.

It is intended that ‘supply chain’ refers to an organisation’s global supply chain.

Who does it apply to?

The Act applies to companies and partnerships which:

1. Supply goods or services.

2. Have a minimum total turnover (including the turnover of all subsidiaries). Following consultation, £36 million has been set as the level in the UK in keeping with other reporting requirements in the Companies Act 2006. However, the California Transparency in Supply Chains Act 2010, which imposes a similar reporting obligation and it is thought influenced section 54, has a higher threshold of $100 million (around £64 million).

3. Carry on a business or part of a business in the UK. The organisation need not be incorporated in the UK or have a physical presence in the UK; the obligation can apply to non-UK registered companies even if they only conduct a small amount of business in the UK.

What should be included in the statement?

The Act does not set out what to include in the statement, however, it lists six areas that may be included:

1. The organisation’s structure, business and supply chains.

2. Its policies in relation to slavery and human trafficking.

3. Its due diligence processes in relation to slavery and human trafficking in its business and supply chains.

4. The parts of an organisations 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.

5. 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.

6. The training about slavery and human trafficking available to its staff.

For companies, the statement will need board approval and to be signed by a director. There are equivalent provisions for partnerships.

The statement must be made available in a prominent place on the organisation’s website. If there is no website, the statement must be provided within 30 days of any written request.

When will this come into force?

This duty will be brought into force from October 2015 but there are likely to be transitional provisions. We will provide an update when further information is available. Guidance from the Home Office is expected.

Enforcement

The Secretary of State has the power to bring civil proceedings in the High Court for an injunction requiring an organisation to comply with the Act.

Organisations could opt to take no action and simply produce a statement that ‘no such steps have been taken’. However the Government hopes that public pressure and the risk of reputational damage will encourage organisations, and we may also see a ‘naming and shaming’ of those that try to avoid the obligation.

What should large organisations be doing now to prepare?

Large organisations should start to identify and prioritise the high risk areas in supply chains and then consider what due diligence steps might be required. Companies should also require all companies that form part of their supply chain to provide relevant information.

Whistleblowing policies should also be amended to cover concerns about slavery or human trafficking.


Merrill April, Head of Employment
Memery Crystal LLP, 44 Southampton Buildings, London WC2A 1AP
T +44 (0) 20 7242 5905
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Sarah Martin, Associate, Employment
Memery Crystal LLP, 44 Southampton Buildings, London WC2A 1AP
T +44 (0) 20 7400 5835
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Lara Shillito, Solicitor, Employment
Memery Crystal LLP, 44 Southampton Buildings, London WC2A 1AP
T +44 (0) 20 7400 5802
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published: August 2015

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