Modern Slavery Act

The Modern Slavery Act 2015: How does it affect your business?

| Published on March 15, 2016

What is the Modern Slavery Act 2015?

The Modern Slavery Act 2015 (‘the Act’) requires organisations, that meet certain criteria, to publish an annual statement which sets out the steps that they have taken to ensure that there is no modern slavery e.g. labour exploitation, both in their own company and within their supply chains e.g. direct and indirect suppliers of goods and services and can include office cleaning services, contractors and joint venture partners.  The Act came fully into force at the end of October 2015.

The aim of the Act is to increase transparency by ensuring the public, consumers, employees and investors know what steps an organisation is taking to tackle modern slavery.

Who is affected?

Under the Modern Slavery Act 2015, commercial organisations who supply goods and services, with a turnover of £36 million or above (in line with a large company for the purposes of the Companies Act 2006) will be required to publish an annual statement.

What does it mean for small and medium businesses?

Small and medium sized organisations are finding that they are affected by the Act in the following ways:

  1. Tenders, new contracts and contract renewals
    If you deal with businesses turning over more than £36 million, you will be part of the supply chain that those companies are required to report on. This means that you are likely to see anti-slavery clauses now being included in both new and renewed contracts.
    Similarly, tender documents now often include questions about modern slavery, (irrespective of the turnover of the company being invited to tender) and you may be obliged to report on your supply chain.
  2. Enquiries from larger companies
    If you form part of the supply chain for larger companies, you may find that you are being asked to give assurances that your supply chains are free of modern slavery in order for the larger company to complete their risk assessment; particularly in high-risk areas such as farming, construction and manufacturing where attention focuses on how suppliers manage to provide such competitive rates.
  3. Association with non-compliant larger companies
    This Act is the most recent in a string of UK legislation aimed at making companies operate in a socially responsible manner. In line with the Government’s intention to name and shame those who are not complying, all annual statements will be readily available to the public to view. Consequently, there could be reputational harm for any organisation associated with a non-compliant organisation.

If you are or may be affected by the Act it is prudent to seek legal advice on your responsibilities and to review the wording in your contracts and those that you receive.

Gemma Gilvear, Trainee Solicitor

Please contact a member of our Commercial Team at our Poole Solicitors Office on 01202 725400 or Dorchester Solicitors Office on 01305 251007.

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