You may associate the term “slavery” with the past few centuries and argue that it’s no longer relevant in modern society. However, it’s worth mentioning that slavery is still a very serious matter which many businesses are unaware of.

What is the Modern Slavery Act 2015?

The Modern Slavery Act 2015 (the “Act”) came into effect in March 2015 to combat modern slavery (e.g. human trafficking and forced labour) which affects almost 21 million people worldwide. The purpose of the legislation is to tackle modern slavery by requiring larger businesses to disclose their actions taken during each financial year. This ensures that modern slavery is not part of their business or their supply chain.

What are the requirements?

Section 54 of the Act requires businesses supplying goods and services in the UK with a turnover of over £36 million to publish an annual Slavery and Human Trafficking Statement (a “Statement”) every financial year. The requirement also applies to include subsidiaries meeting the threshold.

In the Statement, businesses must refer to the measures taken to eliminate human trafficking and slavery in their organisation and its supply chains. It should contain the following details which include but are not limited to:

  • The due diligence process a business carries out in its supply chains.
  • Policies in relation to slavery and human and trafficking.
  • Information outlining any potential risk of slavery and human trafficking.
  • Information regarding the structure and supply chain of your business.

Although businesses are unlikely to face penalties for failing to comply with the Act, this could have significant reputational damage, which means that it’s best practice to create the Statement and publish it on their website.

Why does the Act affect SMEs?

It’s worth mentioning that whilst the requirement under section 54 to publish the Statement applies to large organisations, it will have a significant impact on SMEs that supply goods and services to large businesses.

When large businesses publish their Statement, they need to conduct due diligence on their supply chains, who in turn will also have to do the same. Larger businesses may not be willing to work with SMEs that do not have transparent supply chains. In all the supply contracts, SMEs may find provisions relating to anti-slavery policy, which means that large businesses are able to carry out extensive checks on their supply chains to ensure that SMEs are complying with the Act.

What do SMEs need to be aware of?

The extent to which SMEs need to be aware of the Act depends on the nature of the business and supply chain. For example, if you’re working in sectors that are likely to face risks such as agriculture, telecommunications, hospitality and manufacturing of goods, you should take careful steps to ensure modern slavery doesn’t take place during the process of supplying goods and services.

What steps should SMEs take to satisfy large businesses?

SMEs may not have the same resources as large businesses to combat modern slavery, but there are simply strategies to take. It’s important to take the measures to not only eliminate modern slavery, but also to allows SMEs to maintain long-term relationships with large businesses. SMEs may wish to consider the following steps to tackle modern slavery:

  • Allow employees and workers to report any suspicions of modern slavery or human trafficking in the business or supply chains and be clear that an individual may not suffer any detrimental treatment.
  • Encourage the employees and workers to take holidays and rest breaks as part of health and safety regulations.
  • Take protective measures such as including anti-slavery provisions in contracts.
  • Ensure that the employment of the workforce and recruitment practices, including those directly and indirectly employed comply with working regulations, such as national minimum wage, health and safety and working time.
  • Provide staff training to increase awareness of modern slavery.
  • Make a public statement on the website to tackle modern slavery in their business.
  • Requesting confirmation from external organisations that modern slavery is not part of the business and supply chains.

Most importantly, where SMEs are acting are suppliers, they should only sign contracts that have an express anti-slavery clause in the agreements. Otherwise, signing supply agreements that do not refer to this clause may damage the reputation of the business.

It may seem that the Act is irrelevant to many SMEs, but this issue should not be ignored. Businesses of all sizes should take measures to ensure that they have suitable procedures put in place.

If you require assistance with drafting your slavery and human trafficking statement, get in touch with Farringford Legal and we’re happy to help.