26 January 2016
UK Businesses Aren't Ready for Modern Slavery Act
Research has found that UK businesses aren’t ready for the Modern Slavery Act 2015 that came into force on 26 March 2015.
The Act aims to prevent the use of slave labour in the UK economy by encouraging businesses to take a greater interest in the practices of their suppliers, both in the UK and abroad.
Any business with a turnover of £36million or more, and that has a financial year starting on or after 1 April 2016, will have to make an annual “slavery and human trafficking statement”. This statement will have to set out the steps the company has taken to ensure that its supply chains are free from slavery and human trafficking.
However, the Chartered Institute of Procurement and Supply (CIPS) has found that many UK businesses are unprepared for the upcoming reporting requirement. Their research has found that one in five UK supply chain managers is unaware of the new rules and 27 per cent don’t understand what their business is required to do. Even more disturbing is that over half of UK businesses have said that they lack the skills to deal with modern slavery in their supply chains.
The other worry is that more than half of supply managers in the UK have admitted that they would not know what do to if they did detect slavery or human trafficking in their supply line.
The reporting part of the Act is for large business, as we said, with a turnover of £36million or more. However, it’s important for any business to act ethically and make sure that they are doing all they can to stop slavery and human trafficking.
As a small business you will still have suppliers or may be a supplier in the chain yourself.
Companies subject to the reporting requirements may well make enquiries of other businesses in their supply chains. To maintain ethical standards generally, or to help any larger business customers with their enquiries, you might want to follow some of the below suggestions:
- Have face to face meetings; don’t just rely on phone and email conversations. Discuss the challenges faced, and ideally meet with other people in the supply chain or who deal with the same parties.
- Stand behind or help create a supplier code of conduct for that supply chain. Include anti-slavery and anti-human trafficking clauses. Ensure that the contract includes appropriate rights of audit and inspection.
- Ask your co-suppliers to confirm what they have in place to ensure that their supply chains are free of slavery and human trafficking. Engage in site visits if appropriate.
- Make sure all staff have responsibility for procuring services are fully trained in recognising less than ethical standards.
You can also make simple enquiries to ensure that your suppliers are treating people fairly, paying employees minimum wage and having proper immigration clearance.
We know it can be hard to check these things but if big businesses aren’t ready, how can small businesses make sure that they are?
For more information, please see our previous blog: How will the Modern Slavery Act 2015 affect Small Businesses
If you need legal advice about the Modern Slavery Act, or you are concerned about how to check your suppliers and/or engage with your business customers legally, then get in touch with our expert business lawyers at Slater and Gordon.
Call us on freephone 0800 223 0530 or contact us online and we will call you.