Government guidance provides more detail.

What’s the issue?

The UK’s Modern Slavery Act 2015 (MSA) came into force on 29 October 2015. It introduces a new requirement for global organisations (incorporated businesses and partnerships) carrying on any part of their business in the UK, supplying goods or services and with an annual global turnover of over £36m, to publish a slavery and human trafficking statement on the home page of their website. This applies whether or not the organisation is incorporated in the UK.

What’s the development?

The UK government has published guidance which gives more information about who the new requirements apply to, how the statement should be published and what it should contain, as well as setting out transitional arrangements.

What does this mean for you?

Organisations caught by the MSA with a financial year-end after 30 March 2016, will be required to publish a slavery and human trafficking statement as soon as practicable after year-end and are encouraged to do so within six months. The statement should cover steps the organisation has taken during the previous financial year to ensure slavery and human trafficking are not taking place in any part of its business or supply chains; if it has not taken any, the statement must say this (although there may be reputational consequences to doing so). This is not a requirement to guarantee that an organisation’s supply chain is ‘slavery free’. The statement must be published via a link in a prominent position on the organisation’s website home page.

How is turnover calculated? Total turnover is calculated as:

  • the turnover of the organisation; and 
  • the turnover of any of its subsidiary undertakings (including those operating wholly outside the UK); “Turnover” means the amount derived from the provision of goods and services falling within the ordinary activities of the commercial organisation or subsidiary undertaking, after deduction of—
  • trade discounts; 
  • value added tax; and 
  • any other taxes based on the amounts so derived;

What is meant by ‘carrying on a business’?

A common sense approach should be taken to this. Where an organisation is incorporated or is a partnership, it will be caught if it engages in commercial activities and meets the turnover requirement. This applies to public bodies and charities too.

Having a subsidiary in the UK does not, itself, mean a parent company is carrying on business in the UK as the subsidiary’s activities may be completely independent of those of its parent or other group companies.

What should the statement say?

There is no prescribed content but the statement, which must be approved by board members (or LLP members), must be either about the steps the organisation has taken during the financial year to ensure slavery and human trafficking is not taking place in any of its supply chains or any part of its own business; or that it has taken no such steps. The guidance suggests areas the statement might cover if relevant.

The statement should be in English and in simple, easily understood language. It may contain links to more detailed information.

Where does the statement have to be published? If the organisation has a website, it must publish the statement on that website and include a link to the statement in a prominent place on the homepage. In the absence of a website, a business must provide a copy of the statement to anyone making a written request within 30 days of receipt of the request.

Where organisations have more than one website, the guidance recommends that the statement is placed on the website most appropriate to the business being carried out in the UK. Where there is more than one relevant website, a link to the statement should be placed on each website.

The MSA is clear that the link must be in a prominent place on the home page itself. A prominent place may mean a modern slavery link that is directly visible on the home page or part of an obvious drop-down menu on that page. The link should be clearly marked so that the contents are apparent. The guidance suggests a link such as “Modern Slavery Act Transparency Statement”.

How does this work with complex group structures?

Any organisation in any part of a group structure which meets the criteria needs to produce a statement. Where a parent and one or more subsidiaries are required to publish, the parent company can produce a single statement provided it details the steps taken (or not) of each organisation. The statement should include the activities of any foreign subsidiaries which are part of a parent company’s supply chain. A foreign parent carrying on a business or part of a business in the UK will be required to publish a statement if it meets the criteria.

What happens if an organisation falls below the £36m threshold?

The guidance advises organisations which have been required to publish a statement in previous years to continue doing so even where turnover falls below the threshold. This is not, however, a requirement.

What happens if we don’t publish a statement?

Failure to produce a statement may lead to the Secretary of State seeking an injunction requiring an organisation to comply. If it does not do so, it will be in contempt of a court order and subject to an unlimited fine. Realistically, matters are unlikely to progress that far, particularly as it is acceptable to publish a statement saying that no steps have been taken to prevent slavery and human trafficking in the supply chain. The key issue with non-compliance is more likely to be reputational damage.