The Modern Slavery Act (the Act) received royal assent in March this year and consolidates pre-existing offences relating to human trafficking and slavery.
One aspect of the Act which is likely to be particularly significant for commercial organisations is the new requirement to prepare a slavery and human trafficking statement. Slavery is widely defined to include "servitude" and forced labour working.
This requirement is contained within section 54 of the Act and comes into force today, 29 October 2015. It applies to all businesses with a global turnover of £36 million or more.
The statement will need to be prepared and published on an annual basis; but businesses whose financial years end before 31 March 2016 will not be required to comply with section 54 of the Act for this financial year. For any other business, whose financial year is aligned with the tax year, section 54 will apply, meaning that they will be required to produce a statement.
The slavery and human trafficking statement is intended to improve transparency in business supply chains and to encourage businesses to take steps to avoid any association with modern slavery.
Under section 54 of the Act, any commercial organisation that meets the relevant criteria (outlined below) will have to prepare and publish a statement confirming either:
The requirement applies to all commercial organisations which:
The definition of a commercial organisation is wide and includes all companies and partnerships meeting the above criteria, regardless of whether or not they are incorporated in the UK.
For corporate groups, the turnover threshold of £36 million is expected to take into account the combined global turnover of all subsidiaries within that group.
The statement will also need to be approved and signed by a senior member of the organisation (approval is required by the board of directors within a company; the members of an LLP; a general partner within a limited partnership; or a partner within any other partnership).
Once the statement has been internally approved, it will need to be published on the company's website, with a link to the statement featuring in a "prominent place" on the homepage.
Organisations without a website will need to provide a copy of the statement to anyone who makes a written request and this must be done within 30 days of that request being made.
The Act enables the Secretary of State to enforce the requirement to provide a statement through civil proceedings in the High Court for an injunction.
While there is no specific criminal penalty as such, it is anticipated that companies will be encouraged to provide the statement in line with the legislative requirement in order to avoid facing negative publicity.
Although the Act does not prescribe what specific information must be included in the statement, it does provide some suggestions. These include details about the organisation's structure, business and supply chains, the policies it has in force in relation to slavery and human trafficking and any due diligence processes it has in place to detect where modern slavery may be present in its supply chains.
The task of preparing the statement is likely to prove particularly arduous for organisations which have large supply chains or supply chains which span across multiple countries. There are a number of actions which organisations may wish to consider in order to prepare, including:
For further information or guidance please contact Duncan Reed on +44 (0)333 006 0742 or duncan.reed@TLTsolicitors.com
Contributor: Clare Dadge
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2015. Specific advice should be sought for specific cases. For more information see our terms & conditions on www.TLTsolicitors.