The UK Modern Slavery Act, which was signed into law on March
26, 2015, is now in effect. In addition to setting forth
muscular penalties and enforcement mechanisms to address practices
including "slavery, servitude, and forced or compulsory
labour" and "human trafficking", the Act requires
qualifying commercial organizations to publically disclose what
actions they have taken to eliminate prohibited practices from
their businesses and supply chains—or to disclose that they
have taken no action. According to guidance published by Home
Secretary Rt Hon Teresa May MP, the disclosure requirement is
intended to "require businesses to be transparent about what
they are doing and will increase competition to drive up
standards" in this area of human rights.
The Act's disclosure requirement applies to every
organization carrying on a business within the UK with a
"total annual turnover" or total revenue of £36
million or more, including any organization that is part of a
"group structure" that meets these requirements. Starting
with businesses whose fiscal years end on March 31, 2016 or later,
all organizations must submit these "Modern Slavery Act
Transparency Statements" to the Secretary of State annually at
the end of their fiscal year. While this disclosure requirement
does not "mean that the organisation
in question must guarantee that the entire supply chain is slavery
free," it does require that these statements "should
capture all the actions [the company] has taken," including
where the organization has taken no steps. The statements will be
"public-facing documents" and must be published on the
organization's website with "a link in a prominent place
on its homepage." However, the government will take no role in
requiring companies to take steps to address slavery and other
prohibited practices. Rather, this new public transparency will
allow "consumers, investors and Non-Governmental Organisations
to engage and/or apply pressure where they believe a business has
not taken sufficient steps."
The Act requires that these statements must be signed by an
"appropriate senior person" within the organization. For
a corporate organization, other than an LLP, the report must be
approved by the board of directors and signed by a designated
director or equivalent. For LLPs, the report must be approved
by the members and signed by a designated general partner.
Covered organizations that fail to file the required statement
may be subject to injunctive proceedings by the Secretary of State
requiring them to produce their report. Organizations that do not
comply with an injunctive order may be held in contempt of court
and subject to a potentially "unlimited" fine.
Additionally, if an organization discovers an instance of slavery
in the UK, it should be reported to the police immediately. If an
organization identifies or suspects slavery outside the UK,
"the response should be tailored to the local
circumstances," which may involve contacting NGOs, industry
groups, and local governments.
While there is no specific layout or format for these
statements, Home Secretary May's guidance provided the
following "top tips":
Keep the statement succinct but cover
all the relevant points – if you can provide appropriate
links to relevant publications, documents or policies for your
organisation, do so.
Writing the statement in simple
language will ensure that it is easily accessible to everyone. The
Plain English Campaign (at http://www.plainenglish.co.uk/) is
well-positioned to assist with this.
The statement should be in English
but may also be provided in other languages, relevant to the
organisation's business and supply chains.
Specifying actions by specific
country will help readers to understand the context of any actions
or steps taken to minimise risks.
Home Secretary May's full guidance on complying with this
new requirement can be found here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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