The Modern Slavery Act and the manufacturing industry
The Modern Slavery Act 2015 is highly relevant to the manufacturing industry, where the use of low-paid, temporary and migrant workers is prevalent. We have produced a reminder on how manufacturers can stay compliant.
Brought into force in October last year, the Modern Slavery Act 2015 is designed to tackle slavery and human trafficking in the UK. Specifically, it introduces new requirements for organisations in regards to their business and supply chains.
Does it apply to your organisation?
The Government has issued specific guidance setting out the organisations that are required to comply and produce a statement. However, the important point is whether your organisation ‘engages in commercial activities and has a total turnover of £36,000,000 – irrespective of the purpose for which profits are made’. UK companies with the requisite turnover will fall within this definition.
What does your organisation need to do?
If your organisation is covered by the legislation, you must produce an annual statement setting out the steps you have taken to ensure there is no slavery in your business and supply chains. If you have not taken any steps, you must say so. There is no prescribed format for the statement, but it must be published on your organisation’s website with a link on the homepage.
The statement must be produced for each financial year, and applies to business with a year end from 31 March 2016. Once you have reached the relevant financial year end, the statement must be published ‘as soon as reasonably practicable’. The Government’s guidance suggests that this should take no more than 6 months.
What happens if you do not comply?
The Government guidance sets out that, if an organisation does not comply, the Secretary of State may seek an injunction through the High Court requiring the organisation to comply. If the organisation still fails to comply, they will be in contempt of court and may receive an unlimited fine.
Aside from legal penalties, the government may ‘name and shame’ organisations that fail to produce the statement, which is likely to cause reputational damage.
What should you be doing if it does not apply to your organisation?
Organisations are under increasing pressure to take action, due to the devastating impact on individual victims and the risk of high-profile media and online campaigns alleging slavery. We recommend that manufacturers who are not required to comply should still produce a statement, especially if ethical supply is at the heart of your business.
Before doing so, consider the following:
- Important for the tender process
When tendering for work with large organisations, such as supermarkets, showing that humanitarian issues are important to your company and that you are ahead of the curve could be the difference between getting the deal or not, particularly where such organisations will be bound to produce the statement themselves.
- The statement need not be complicated
As outlined above, there is no prescribed format for the statement; it is up to you how you produce the information. If you are already taking steps to tackle slavery and exploitation, through workplace education and ethical recruitment for example, simply explain this on your website.
- Consider other entities within your supply chain
Although you may be satisfied that your own manufacturing operations are slavery-free, you should be clear that your supply chains and other business relationships are not falling foul. Query the steps being taken to tackle slavery in the operations of the recruitment companies, component and machinery providers, uniform producers and food suppliers you use, for example.
The Government’s “Transparency in Supply Chains etc. A practical guide” can also be accessed here.
For further information, please contact our Manufacturing and Engineering legal specialist Hayley Bevis, Senior Associate Solicitor in our Corporate team on 023 9236 4321 or firstname.lastname@example.org.