Modern slavery statements
The Modern Slavery Act 2015 (MSA) is ultimately designed to tackle slavery and human trafficking, but a key provision is in the section 54 of the MSA which introduced a requirement on organisations to produce an annual transparency statement.
Which businesses have to make a Slavery and Human Trafficking Statement?
This will apply to all businesses with a turnover of more than £36 million that supply goods or services. The requirement applies to any incorporated company (regardless of where it was incorporated) or partnership (including limited liability partnerships) – irrespective of the place of formation – that carries on its business or part of its business in the UK. You can read the full legislation here.
When does the requirement come into force?
Section 54 of the MSA (transparency in supply chains) came into force on 29 October 2015 but does not have effect in respect of companies with a financial year ending before 31 March 2016. Businesses with year end of 31 March 2016 will be the first businesses required to publish a statement under the transparency provisions. Organisations should seek to publish this as soon as reasonably practicable after the end of financial year and are encouraged to do so within 6 months from the relevant date. The statement will need to be published annually for every year in which the business meets the criteria, however even if the business falls below the required £36 million turnover it might still be good to carry on with the reporting rather than abandon it.
What information must a Slavery and Human Trafficking Statement include?
This statement will need to set out all the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any part of its supply chains or any part of its business. If no actions have been taken then the statement must specify that it has taken to relevant steps. The statement must be approved and signed by a director, member or partner of the organisation.
The government guidance suggests that the following information may be included:
- the organisation’s structure, its business and its supply chains;
- its policies in relation to slavery and human trafficking;
- its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
- the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
- 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;
- the training and capacity building about slavery and human trafficking available to its staff.
Where should the statement be published?
According to the most recent government issues guidance in relation to the statement, these must be published on an organisation’s website with a link in a prominent place on the homepage.
What will happen if we fail to provide a statement?
There is no sanction for failing to comply, although the Government may, in theory, seek an injunction to compel compliance. While enforcement action may be unlikely, the Government’s stated aim is to encourage businesses to ‘race to the top’ by harnessing consumer and wider stakeholder pressure. The importance of reputation and brand may ultimately be the main incentives for compliance with both the letter and spirit of this new law.
For further information, please contact a member of our HR Solutions team or email your enquiry to us
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