Modern Slavery – Why Smaller Businesses Are Also Affected

Home Industry News Modern Slavery – Why Smaller Businesses Are Also Affected

New obligations for employers under the Modern Slavery Act 2015 only directly affect ‘large’ businesses. However, the wider impact of the Act means that smaller business may well also need to consider what it means for them.

What Is Modern Slavery?

Employers could be forgiven for dismissing the concept of ‘slavery’ as one confined to history but the Modern Slavery Act 2015 has brought it right back to the fore. ‘Human trafficking’ is probably a more recognisable term and this is included in the wide definition of modern slavery, along with:

  • Forced work, through physical or mental threat;
  • Being owned or controlled by the employer through actual or threatened mental or physical abuse;
  • Being treated as a commodity or being trade as property;
  • Being physically constrained or having restrictions places on freedom of movement.

The Modern Slavery Act 2015 brings together current offences related to human trafficking etc, but also brings in a significant new obligation on large employers; the annual production of a modern slavery statement.

“Forced work, through physical or mental threat…”

The Modern Slavery Statement

Commercial organisations with an annual turnover of at least £36 million must publish a modern slavery statement for each financial year. This is not the same as an anti-slavery policy.

The statement must set out the steps that the employer has taken to ensure that not only their business, but also their supply chains, are free from slavery.

When and Where Must The Statement be Published?

Employers whose financial year ended on or before 30th March 2016 do not need to produce a statement for that financial year, but must comply from their next financial year. Those whose financial year ends on or after 31st March 2016 must produce a statement for that financial year; to be published within six months of its end. The statement must be published in a prominent place on the employer’s website. In the rare situation where there is no website, statements must be provided within 30 days of a request.

Supply Chains and Smaller Companies

It is the need to review supply chains that opens up this new piece of law to businesses who are not directly affected. Businesses under the turnover threshold who have service contracts with those who meet the threshold will create part of the larger business’ supply chain. As part of the due diligence required, the larger business will be interested in how the smaller business deals with modern slavery issues and may well ask to see their anti-slavery policies or modern slavery statement. Just because there is no statutory requirement for the smaller business to have a modern slavery statement, the absence of one may be detrimental to both existing contracts and future tenders.

Benefits of Modern Slavery Statement for Smaller Employers

  • Due diligence obligations on larger employers means they will want to know that you take modern slavery seriously and solidify renewed contracts;
  • New tender exercises, and brand reputation as a whole, will be enhanced by modern slavery awareness;
  • Potential future expansion of the legislation to include smaller businesses means they will be ready to easily comply with the law.
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Elena Boura