The UK's Modern Slavery Act is amongst the toughest in the world. Companies must comply with the Act if they:
- supply goods and/or services;
- have annual sales of £36m or more; and
- carry on any business in the UK.
Thus, the Act reaches far beyond the borders of the UK although merely having a UK subsidiary will not necessary require the foreign parent company to comply with the Act. The test is common sense based—if a company has a demonstrable business presence in the UK (either itself or via a subsidiary) it will be caught by the Act.
The transparency in supply chain provisions of the Act require a statement be prepared and published each year including such things as details of the business and structure of the company, policies relating to human trafficking and slavery, parts of the business which may be susceptible to slavery/human trafficking, how the company measures its compliance and what training it provides to its employees.
The concept of slavery the Act seeks to prevent is broader than the image of a person in bondage being forced to work by violence. But, recent guidance issued by the UK government says that where a worker chooses to work in undesirable or unsafe conditions without being forced or deceived and is able to leave freely and easily without threat to themselves or their family, this may not amount to modern slavery. So, the government expects companies to investigate in detail and indepth the conditions in their supply chains.
The first group of companies required to file a statement are those with fiscal year ends of 31 March 2016. Retailers and brand owners inside the UK and those who are based outside the UK but do business here may very well be caught by the Act's provisions. If this applies to you, an important first step will be to review your supplier contracts and consider including provisions requiring suppliers to comply with the Act. And, of course, make sure your UK employees are paid the minimum wage and that you have appropriate immigration checks in place!