What is the Modern Slavery Act?

The Modern Slavery Act 2015 (MSA) is aimed at combating crimes of slavery and human trafficking. The MSA recognises that businesses have a role to play in tackling these crimes. A person is liable if they ought to know another person is held in slavery, servitude or required to perform forced or compulsory labour.

Section 54 of the MSA requires commercial organisations that carry on a business or part of a business in the UK and having a global turnover above £36 million, to publicly state each year the action they have taken to ensure that their business and supply chains are slavery free. Partnerships are also included.  Any organisation that engages in commercial activities in the UK could be caught by section 54 regardless of their purpose or whether profits are made.

Essentially, the Act aims to ensure that businesses are transparent about what they are doing to tackle modern slavery and human trafficking.

What do you need to do to comply?

The disclosure of an annual human trafficking statement is the only current requirement and it must state:

  • the steps your organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of your supply chains or in any part of your own business; or
  • that your organisation has taken no such steps.

There are no length requirements for the statement however it is recommended that you include information about:

  • the organisation’s structure, business and supply chains;
  • the policies in place in relation to slavery and human trafficking;
  • the due diligence processes in relation to slavery and human trafficking in your business and supply chains;
  • the parts of your business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps you have taken to assess and manage that risk; and
  • the training about slavery and human trafficking available to your staff.

Who is responsible?

The annual statement will need to be approved as follows:

  • Companies: the board of directors must approve the statement and it must be signed by a director;
  • Limited liability partnerships (LLPs): the LLP members must approve the statement and it must be signed by a designated member;
  • Limited partnerships registered under the Limited Partnerships Act 1907: a general partner must sign the statement;
  • Other types of partnership: a partner must sign the statement.

Are there any deadlines?

There are no prescribed time limits in which to make the statement, however Home Office guidance provides that a commercial organisation:

  • is expected to publish its slavery and human trafficking statement as soon as reasonably practicable after the end of the financial year;
  • may decide to publish the statement alongside its annual or non-financial reports;
  • is encouraged to report within six months of the financial year end to which the statement relates.

Where should the statement be published?

Once finalised, the statement must be published on the organisation’s website and include a link to it in a prominent place on the homepage.

If the business does not have a website it must provide a copy of its slavery and human trafficking statement to anyone who makes a written request for one, within 30 days of the organisation receiving the request.

What are the implications?

If a business fails to produce a statement for a particular financial year the secretary of state may seek an injunction through the High Court requiring the organisation to comply. If the organisation fails to comply with the injunction, they will be in contempt of a court order, which is punishable by an unlimited fine.

In practice, failure to comply with the provision will mean that you have not produced a statement, published it on your website (if you have one), or had the statement signed by an appropriate person.

Can your organisation do anything extra?

Commercial organisations are expected to build on their statements year on year. The statements are expected to naturally evolve and improve over time in line with an organisation’s processes that may come into existence to tackle modern day slavery.

A failure to comply with the provision, or a statement that an organisation has taken no steps, may damage the reputation of the business.

You may want to consider training employees to spot potential issues and/or drafting a specific policy that employees can refer to. This would show that your business has taken extra steps within a financial year to ensure that slavery and human trafficking is not taking place in any of your supply chains or in any part of your business. Organisations should also appoint someone senior to be responsible for such compliance.

If you require any assistance with any of the above, or need help drafting a statement or business policy, please contact Farleys Commercial team on 0845 287 0939 or send an enquiry through our online contact form.