Last month we asked you to vote on whether including religion and belief within the protections of the Equality Act was a good or bad thing.The debate was hard fought but a small majority (56%) believed that it was essentially good. But the problem of conflict with other protections was a concern with 83% believing that something should be done to avoid conflicts of rights, which have been so evident in the news lately. A perhaps surprising 39% of you thought that political beliefs should also be protected but, with the election so recent, perhaps that is more of a live issue that at other times of the year.
This month we invite a guest speaker to step into the ring: Gillian Rivers, a partner in our family team, who is deeply involved in anti-slavery and is a member of the Advisory Panel to the Independent Anti-Slavery Commissioner. The issue is the requirement in the Modern Slavery Act 2015 for large businesses to publish an annual statement showing what they have done to ensure that there is no slavery in their businesses or supply chain. On the other side of the debate is employment partner, Chris Syder, who is equally qualified to debate this issue. He will be heading the CBI delegation next year when the International Labour Organisation (ILO) considers the appropriateness of its labour standards in the context of “decent work in global supply chains”.
Finally, you may have seen this week that the Attorney-General has given the opinion that for people with no fixed work address, travel time between home and their various places of work should be counted as ‘working time’. See Federación de Servicios Privados del Sindicato Comisiones Obreras v Tyco Integrated Security SL and anor for more details. We will deal with this further next week.
Responsible UK businesses will want to play a greater part in tackling modern slavery and human trafficking around the world. We should be proud but also cautious of the fact that the United Kingdom Government is positioning itself at the forefront of the global fight against this terrible violation of human rights.
However, the elephant in the room is that the Act will cause more problems than it solves, at least in the short to medium term. One of the primary reasons why businesses are often reticent to look too closely at their supply chains is the risk that, if slavery is discovered, they will suffer adverse reputational and consumer confidence consequences. Some businesses will fear becoming a target for such criticism especially if they lack the expertise and/or resources to implement an effective global supply chain management system.
The Act brings with it a number of practicable concerns around the obligation to provide the slavery a human trafficking statement which include:
- Inadequate time for businesses to prepare because the draft regulations providing the detail of this obligation have yet to be published. It is anticipated that this obligation will come into effect from October 2015 – a blink of an eye in corporate terms.
- The Government has yet to decide upon the turnover threshold that will determine how many UK businesses will need to comply with the new obligation. If it is set at the mooted lowest level of £36 million, then an estimated 12,000 companies would be caught.
- Subject to the threshold issue, the Act will apply to any business, not just companies incorporated in the UK. Turnover will be calculated based on total global turnover. The statement is potentially a very onerous obligation. Businesses will need a clear understanding, in global terms, of how the different parts of the business operate across the world and how and where suppliers and contractors operate. How many currently have that understanding?
- Further, as it is currently drafted, the clause has inherent legal uncertainty because it does not require companies in the UK to report on all the supply chains in their groups overseas, such as those of wholly-owned subsidiaries abroad.
- Someone will need to review the practices of these parts of the business and their supply chains.
- Businesses will need to consult with trade unions, NGOs and other important stakeholders such as shareholders. Consultations may become more difficult in years to come based on the extent of the reporting.
- While it will be possible to provide a statement saying that no steps have been taken to combat slavery and human trafficking, this is very unlikely to be a viable option, given the reputational risks to the business. But, if I was more cynical, there must be a real danger that the provisions will become tokenistic.
The Act is a undoubtedly a notable step forward to ensure that businesses become directly responsible and accountable in law for the condition of their supply chains. With an eye on the bigger picture, I hope that business will in time have the confidence to overcome these concerns but we cannot ignore the likelihood that the new reporting obligation will inevitably create tension between business and wider societal interests.
“Modern slavery is a heinous crime where the most vulnerable people in society are ruthlessly exploited for criminal gain”. (Theresa May, Home Secretary)
Yes, yes we know, but what does it have to do with us? Surely this is a problem that affects only the developing world where poverty exposes the vulnerable to crime. Think again. Slavery is a bigger problem now than in 1833 when William Wilberforce fought so hard to eradicate it. There are an estimated 36 million slaves in the world today – including approximately 12,000 slaves within the shores of good old Blighty.
The Modern Slavery Act 2015, the first purpose-built legislation of its kind in the UK and Europe, was given Royal Assent in March. Slavery concerns forced servitude or compulsory labour, human trafficking, and exploitation of individuals for these purposes. The main offences of trafficking and slavery carry a maximum penalty of a life sentence. Provisions for confiscation of proceeds of crime and reparation will ensure that victims can be financially compensated from the ill-gotten gains of the traffickers and slave masters.
Although yet to receive enabling regulations, the Act generates a positive duty on commercial organisations, which carry on business in any sector in the UK and have a turnover above a certain amount, to publish an annual slavery and human trafficking statement. This will disclose the steps the business has taken to ensure that slavery and trafficking is not taking place in any of its supply chains or businesses, or that it has taken no such steps.
Typically, any final product available for purchase will have passed through a very long chain of producers, manufacturers, distributors and retailers. How then can an establishment confirm with any degree of certainty that the entire supply chain within which it operates is ethically clean? Perhaps this reporting exercise will prove costly and complicated. Perhaps the devil will be in the detail. Perhaps our Government will set the financial threshold at a level that makes this little more than a nod to the Act so that it has no real impact. In each case, we just have to wait and see.
However, as awareness of the enormity of the problem of modern slavery grows and we learn more from the victims who become survivors, can organisations – even your organisation - turn a blind eye to the requirement to disclose whether they have investigated, or even considered, whether their supply chains are contaminated by this unseen crime? The measure is designed to encourage businesses to do the right thing by attempting to engage consumer and other stakeholder pressure.
Will your clients and customers begin to demand to know whether your organisation can demonstrate it cares? Will they vote with their feet if you cannot? Can you afford to take the risk that your profits will be trampled on by the disdain of caring consumers?
Whether a moral obligation exists to consider the consequences of our business activities is a matter of individual choice. But, be you a saint or a sinner, the statutory requirement to consider your working practices will, in my view, lead inexorably towards the eradication of slavery in the modern world. This legislation will breathe life and form into suffocated, voiceless and unseen victims. When the ghosts of Wilberforce`s past step forward clanking their rusty chains, we will no longer be permitted to pass through them undeterred.