On first glance, it looks as though this will not be applicable to most of us but actually, we could all be affected. Why now? Because it applies to businesses with a financial year ending on or after 31st March 2016.
The provisions of the Act apply to any organisation which carries on business in the UK with a global turnover of more than £36 million including subsidiaries. Such companies must either provide a statement of the steps that the organisation has taken to ensure that forced labour and human trafficking are not taking place in any part of their business or supply chain, or a statement that it has not taken any such steps. So we can say to ourselves, well, it certainly does not apply to us; we are too small.
BUT you could be a supplier of a supplier of a supplier and so on, so as a supplier, you could well be affected.
Imagine a scenario such as this; a huge supermarket chain sells chocolate cakes and receives its cakes that are made by a well known bread and cake company. Where does the bread and cake company (the supplier) obtain its chocolate from and are the suppliers of the chocolate in breach of the Modern Slavery Act?
The kind of information that would need to be included in the declaration by the large supermarket is the structure of the organisation, its business and all its supply chains. Thus, the suppliers of the suppliers of the suppliers to the company are affected and if you are a supplier to a supplier to an organisation that hits the £36 million threshold, you too will be affected.
If an organisation is affected, then the declarations in relation to the Act need to be in a prominent location, e.g. on the organisation’s website, with a link to the anti-slavery statement on their home page. Non-compliance will result in civil proceedings in the high court.
It is important that somebody in the business is responsible for ensuring that efforts are made to eliminate modern slavery.
Then there are ramifications too for the Whistle Blowing policy which needs to be crystal clear and also adhered to. What will a company’s policy and approach be to remedying the situation in cases of forced labour? And what measures will be taken to protect whistleblowers?
In a £36 million business, someone needs to be made accountable for ensuring that the Act is complied with and he/she will need to conduct due diligence to ensure that there is no risk of contravention of the Act in any part of the supply chain.
So on first glance, you may think that modern slavery is not applicable to your organisation but at a minimum, it is worth reading Chapter 30 of The Modern Slavery Act 2015 Part 6 – Transparency in supply chain ……
At a minimum, employers who are at risk of exposure need to keep a constant eye on company policy relating to the Modern Slavery Act and train those e.g. buyers, who may be affected.
If you’d like to discuss the ramifications of this legislation change or any other aspects of Employment Law and Compliance, please do get in touch with the team at Integrated Resources.
