MODERN SLAVERY ACT
Modern Slavery Act: A Call for Reform and What UK Employers Should Expect
The UK's Modern Slavery Act 2015 was a pioneering piece of legislation aimed at tackling the issue of modern slavery, which continues to affect millions of people worldwide. While the Act was seen as a groundbreaking move when it was introduced, a recent report published by the House of Lords’ Modern Slavery Act 2015 Committee reveals that the UK is now falling behind other nations in its response to modern slavery. The report raises concerns about the UK's ability to combat modern slavery effectively and highlights the need for legislative reforms to keep pace with global advances. For UK employers, this could signal forthcoming changes in obligations, enforcement, and compliance requirements.
“The Modern Slavery Act 2015 was a landmark piece of legislation, but the UK's response to modern slavery has not kept up with the advances of other nations. For UK employers, this report signals that changes may be on the way, with a likely focus on stronger enforcement, expanded obligations, and increased accountability.”
In this article, we will provide an overview of the current legal obligations on UK employers under the Modern Slavery Act, examine the findings of the recent report, and discuss the potential impact of these developments on future business responsibilities.
Current Requirements Under the Modern Slavery Act
The Modern Slavery Act 2015 introduced key legal requirements aimed at addressing modern slavery, particularly within business supply chains. These obligations primarily apply to large organisations, but they are increasingly relevant to a broader range of employers.
The cornerstone of the Act is the requirement for certain businesses to publish an annual modern slavery statement. This obligation applies to commercial organisations (whether incorporated in the UK or elsewhere) that operate in the UK and have an annual turnover of £36 million or more. These companies are required to publish a statement setting out the steps they have taken to ensure that modern slavery is not occurring in their operations or supply chains.
The statement must either:
Detail the actions the organisation has taken to combat slavery and human trafficking, or
Confirm that no such steps have been taken (which could result in reputational damage).
The content of the statement typically covers:
The organisation's structure, business, and supply chains.
Policies related to modern slavery.
Due diligence processes.
Risk assessments and management.
Effectiveness of measures taken.
Training on modern slavery and human trafficking.
Currently, the government encourages organisations to publish their statements on a prominent place on their websites, and while there is no direct financial penalty for non-compliance, failure to publish a statement could lead to civil proceedings. The reputational risk, however, is often the more pressing concern for businesses, as consumers and stakeholders are increasingly placing emphasis on ethical business practices.
Findings from the Recent Report
The recent report from the House of Lords’ Modern Slavery Act 2015 Committee reveals a troubling trend: the UK is no longer leading the charge against modern slavery. The report notes that while other countries have advanced their legislation and enforcement efforts, the UK’s response has stagnated. This is largely due to a combination of weak enforcement, limited resources, and a lack of accountability mechanisms.
Some of the key findings include:
Ineffective enforcement: The report criticises the lack of enforcement of the Modern Slavery Act, particularly regarding the requirement for businesses to publish modern slavery statements. While the Act requires organisations to produce a statement, the penalties for non-compliance are minimal, and the enforcement of this obligation has been lax. A study from the Business & Human Rights Resource Centre found that 40% of companies required to produce a statement were not compliant with the law.
International comparisons: Other countries, such as Australia and France, have moved ahead of the UK by introducing stronger legislation. For example, Australia’s Modern Slavery Act 2018 not only requires businesses to produce statements but also has a government-run public register, increasing transparency. France has gone even further with its Duty of Vigilance law, which requires companies to take proactive measures to prevent human rights abuses, rather than simply reporting on them.
Lack of accountability: The report highlights the absence of accountability mechanisms for non-compliant businesses. In particular, there are no significant consequences for companies that fail to meet their reporting obligations, and the government has not been proactive in addressing this gap.
Resource constraints: Enforcement bodies, such as the Gangmasters and Labour Abuse Authority (GLAA) and the National Crime Agency, have faced significant resource limitations, hampering their ability to tackle modern slavery effectively.
What Does the Future Hold for UK Employers?
The findings of the report suggest that reforms to the Modern Slavery Act could be on the horizon, with the government likely to face pressure to enhance enforcement and compliance mechanisms. For UK employers, this could mean a tightening of legal requirements and increased scrutiny.
Strengthened Reporting Obligations: One of the key recommendations from the report is to enhance the transparency and accountability of the reporting process. This could involve the introduction of a central government-run register, similar to Australia’s, where companies are required to file their statements. This would not only make it easier for stakeholders to track compliance but would also increase pressure on companies to meet their obligations.
Penalties for Non-Compliance: The introduction of financial penalties or other significant consequences for non-compliance is a likely reform. At present, there is little incentive for companies to fully comply with the Act beyond reputational concerns. The report suggests that stronger enforcement mechanisms, potentially including civil or criminal penalties, may be necessary to ensure compliance.
Expanded Scope: Although the current legislation applies only to large companies with a turnover of £36 million or more, future reforms could see the scope of the Act extended to cover smaller companies or additional sectors. The growing focus on ethical supply chains and corporate responsibility may drive calls for more comprehensive legislation that affects a broader range of businesses.
Proactive Due Diligence Requirements: The UK may follow in the footsteps of countries like France by requiring businesses to take proactive steps to prevent modern slavery in their supply chains, rather than simply reporting on their efforts. This would represent a significant shift in responsibility for businesses, placing a greater emphasis on due diligence and risk management throughout the supply chain.
Increased Resources for Enforcement: To ensure that the Act is enforced more effectively, the government may also consider increasing funding and resources for enforcement agencies like the GLAA and the National Crime Agency. This would allow for more proactive investigations and stronger oversight of business practices.
The Modern Slavery Act 2015 was a landmark piece of legislation, but the UK's response to modern slavery has not kept up with the advances of other nations. For UK employers, this report signals that changes may be on the way, with a likely focus on stronger enforcement, expanded obligations, and increased accountability.
In the meantime, businesses should review their current modern slavery statements and take steps to ensure that they are fully compliant with the existing requirements. Looking forward, employers should be prepared for the possibility of more stringent reporting and due diligence obligations, and they should consider how they can proactively address the risk of modern slavery in their supply chains to stay ahead of potential regulatory changes.