Modern Slavery Act 2015 – New Conduct and Reporting Obligations

The Modern Slavery Act 2015 (“the Act”) came into force from 29 October 2015, introducing a number of measures to combat slavery and human trafficking. In addition to creating new criminal offences, powers of enforcement and measures to protect victims, it introduces requirements intended to eliminate slavery and trafficking in global supply chains. It gives the UK the same wide-reaching ethical remit as regards slavery and trafficking as the Bribery Act 2010 gives it in the field of bribery and corruption.

The Act is intended to encourage businesses to make greater efforts to identify and combat slavery and trafficking within their own supply chains. It is deliberately intended to make suppliers accountable to consumers, and to use consumer pressure to drive business change. Non-compliance in this area is therefore likely to have adverse consequences for a company’s reputation besides being subject to a legal challenge and its financial consequences.
Section 54 of the Act requires certain businesses to publish a slavery and human trafficking statement on their website setting out the steps they have taken during the financial year to ensure that slavery and human trafficking are not taking place, a) in any part of its supply chains, and b) in any part of its own business, or a statement that the organisation has taken no such steps.

To whom does it apply?

Section 54 applies to businesses (companies and partnerships) which:

  • Are based inside or outside the UK and carrying on business within it;
  • Have a turnover of more than £36million; and
  • Have a financial year ending on or after 31 March 2016 (companies with a financial year ending before that need not comply with the reporting requirement until next year but it may still be worthwhile considering what practical steps can be taken before that to put in next year’s statement).
  • International Reach

    Section 54 applies to any “body corporate (wherever incorporated) which carries on a business, or part of a business, in any part of the United Kingdom”

    This wording is the same as that used in Section 7 of the Bribery Act 2010 (failure of commercial organisations to prevent bribery), so the intention is to give the UK a broad international jurisdiction in this area. However, the guidance notes make it clear that a common sense approach will be applied when determining whether a company has a “demonstrable” business presence in the UK. Similarly, a parent company with a subsidiary in the UK will not automatically be caught, as it is possible for a subsidiary to act entirely independently.

    Firms should consider any specific requirements that apply to them to ensure compliance. The standards of practice will apply to all trades and businesses irrespective of whether the reporting obligations apply or not.