Last autumn, the Home Office wrote to 17,000 businesses reminding them of their obligations under the Modern Slavery Act and informing them that it would be carrying out an audit into the levels of compliance.
That audit has been underway since the expiry of the 31 March 2019 deadline for those businesses that are legally required to publish Modern Slavery Statements (namely those with a turnover of £36m or more). Although the Home Office has yet to commit to a date when it will reveal the results of the audit, it has sent a reminder to those 17,000 businesses “to open up about modern slavery in their supply chains, or risk being named as in breach of the law".
The UK is leading the fight against modern slavery
All businesses with a turnover of more than £36 million must publish an annual Modern Slavery Statement, i.e. a transparent report into what they are doing to stop modern slavery and forced labour practices occurring in their business and supply chains. Indeed, the Minister for Crime, Safeguarding and Vulnerability, Victoria Atkins, supporting the Home Office action, said: “It is horrible to think some of the goods and services we buy could have been produced by someone forced into modern slavery. This is abhorrent and as global leaders in the fight against modern slavery, we will not tolerate it.
Some businesses are already leading the way in taking action by being open and transparent about what they are doing to identify, tackle and prevent forced labour in their supply chains, but too many are still failing to meet their basic legal obligations”.
Too many businesses are falling short of their obligations
It is estimated that only 60% of businesses in scope have published a statement, some of which are poor in quality and fail to meet even the basic legal requirements. If, following the Home Office audit, a business is found not to be compliant, or has published an inadequate statement, it risks being publicly named and shamed. At the moment, there is no statutory penalty for failure to publish a statement but the Government could seek an injunction (failure to comply with which could attract a significant fine) - although it has yet to take legal action against any business.
Avoid being named and shamed
It is anticipated that the audit will focus on the mandatory legal requirements that relevant businesses must:
- Publish a statement for each financial year;
- Ensure the statement has been approved by the board and signed by a director; and
- Publish the statement on its website (if it has one) with a prominent link on the homepage.
The Home Office has indicated that it intends to contact all businesses that do not meet the legal minimum requirements and to give them the opportunity to bring their statements up to the required standard. If they fail to do so, the Home Office will consider publicising the business’s non-compliance, or taking enforcement action in the courts.
How should you prepare for the audit?
- Check if you need a statement and if you do ensure that it is up to date. The Home Office advises that statements should be published within six months of the financial year end.
- Make sure your statement has been approved by the board and has been signed and dated by a director. Your statement should clearly state the date of board approval, and should indicate which director signed it and when (though there is no need to show an actual signature on the online version).
- Check that each group company that falls within the scope of the Act is covered by a statement: groups have the flexibility to publish a statement which covers more than one group company (provided that the statement clearly sets out what each company is doing to tackle slavery and trafficking). The Home Office has recently confirmed that it is sufficient for a statement to list all the companies covered, and to be approved by the board of the parent or group company that prepared the statement.
- Ensure that your website includes a prominent link on the homepage of each company that is covered by the statement.
It is worth bearing in mind that even if your business does not have to publish a Modern Slavery Statement, you must still comply with the law. Therefore we strongly advise you to consider how slavery and forced labour might be involved in your business, or supply chain, and how to deal with it.
If you need any guidance on the modern slavery act or any other aspects of employment law, please get in touch.
