Modern Slavery Act - What are your obligations?

The statement sets out the steps that the business has taken to ensure that slavery and human trafficking is not taking place within the business, or within any of its supply chains.

All recruitment businesses should now be considering whether section 54 of the MSA applies to them and if so, taking steps to ensure compliance.

For recruitment businesses, the MSA follows the recent trend of legislation, such as the onshore and offshore intermediaries legislation, which requires them to fully investigate and understand their supply chains. This could include the lower tier agencies, personal service companies, umbrella companies, payroll providers and other suppliers they engage with, both domestically and internationally.

Whilst section 54 of the MSA will inevitably mean more management and administrative work for recruitment businesses, it also presents an opportunity for them to demonstrate compliance, to win more clients, and to consolidate their position on existing client Preferred Supplier Lists (PSLs).

Non compliance also runs the significant risk of being excluded from client tenders and removed from client PSLs, as the client itself will not be able to confirm it has a compliant supply chain in place.

Background

The MSA consolidates and develops previous legislation relating to slavery, servitude, forced labour and human trafficking by improving enforcement, strengthening criminal penalties and providing better support and protection for victims.

Section 54 of the MSA introduces a new transparency obligation and requires all commercial organisations that carry on any part of their business in the UK, supply goods or services and have an annual turnover of £36 million or more, to produce an annual slavery and human trafficking statement.

The government recognises the important role that businesses can play in tackling slavery and human trafficking, and it has therefore included the requirement to produce the statement. This ensures  that businesses take the issue seriously and exert pressure upon their supply chains to eradicate slavery and human trafficking.

Section 54 of the MSA came into force on 29 October 2015 and applies to financial years ending on or after 31 March 2016.

Content of the Statement

The slavery and human trafficking statement must include:

• a statement of the steps that the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any part of its own business or its supply chains, or
• a statement that the organisation has taken no such steps.

There is no prescribed form for the statement. The statement may include information about:

• the organisation's structure, business and its supply chains
• its policies in relation to slavery and human trafficking
• its due diligence processes in relation to slavery and human trafficking in its business and supply chains,
• the parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk,
• its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate
• the training about slavery and human trafficking available to its staff

The statement must be approved by the board of directors and signed by a director.

The statement must be published on the organisation's website and there must be a clear and prominent link to the statement from the website's homepage.

Enforcement

There are no financial or criminal penalties for failing to produce a slavery and human trafficking statement. The only remedy under the MSA is that the Secretary of State can apply to the Court for an injunction to force the organisation to produce a statement.

However, it is not the threat of an injunction that has teeth, but rather the inevitable damage to the organisation's name and reputation. Additionally, there could be a consequential loss of business if the organisation fails to produce the statement, or produces a statement which says it has taken no steps to ensure that slavery and human trafficking is not taking place in its own business, or in its supply chains.

Best Practice

There is a lot for recruitment businesses to consider and do, in time to publish their first statements at the end of this financial year. Preparing the statement is likely to involve a number of different functions, including HR, legal and compliance.

In preparation for this new requirement, all recruitment businesses caught by s. 54 of the MSA should consider taking the following steps to achieve compliance:

• identify the slavery and human trafficking risks within the business and its supply chains
• check what steps the business currently takes, if any, to ensure slavery and human trafficking is not taking place
• undertake due diligence on supply chains, including requiring the completion of a MSA questionnaire
• produce and implement a MSA policy
• unsure commercial agreements contain robust MSA provisions, including the right to exit the agreement immediately should a MSA issue arise
• train staff on slavery and human trafficking risks

For more information or advice, please contact Michael Delaney on 01923 919 316.