We recently highlighted the need for companies to investigate
their supply chains for human trafficking and slavery in light of
the enactment of the
Modern Slavery Act 2015 (the "MSA") in October of
last year. The MSA introduced three criminal offences: (i) slavery,
servitude and forced or compulsory labour (s1), (ii) human
trafficking (s2) and (iii) committing any offence with the intent
to commit human trafficking (s4). Section 54 of the MSA also
requires organisations with an annual turnover of at least
£36 million supplying goods or services within the UK to
produce an annual slavery and human trafficking statement
identifying those parts of its business and supply chains at risk
of slavery and/or human trafficking taking place and the steps the
company has taken to assess and manage any such risks.
For organisations that thought the MSA was just a tick boxing
exercise, take note. The English High Court has for the first time
found a company liable to compensate victims of modern slavery.
The claim was brought by six Lithuanian men against their
employer, DJ Houghton Catching Services Ltd ("DJ
Houghton"), a company engaged in the supply of labour to
chicken farms in the UK. The court held that DJ Houghton was liable
to pay compensation to the claimants for unpaid wages under the
Agricultural Wages Act 1948 and certain breaches of the Gangmasters
(Licensing Conditions) Rules 2009 relating to the charging of
prohibited work-finding fees, the unlawful withholding of wages and
the failure to provide adequate facilities to wash, rest, eat and
drink. The amount of compensation payable by DJ Houghton will be
assessed at a separate hearing.
The court's finding is unsurprising given that houses
controlled by DJ Houghton were raided by the police in 2012
liberating a number of workers. The Gangmasters Licensing Authority
("GLA") then conducted a detailed investigation which
described the company as "the worst UK gangmaster ever".
The GLA also revoked DJ Houghton's licence.
DJ Houghton sought to defend the claims on the basis that an
individual unconnected to its business had carried out the actions
complained of. However, the GLA found that the individual had in
fact played an "active" and "integral role within DJ
Houghton" and for that reason, DJ Houghton remained
responsible for his actions towards workers irrespective of whether
it had consented to or had full knowledge of his activities. The
court was also satisfied on the evidence given by the workers that
the individual had clearly acted as the company's agent.
Notably, this decision follows the first conviction of a UK
businessman in January of this year for conspiracy to traffic in
connection with the supply of labour to Kozee Sleep, a company
which provided beds to a number of leading high street
These cases are a reminder for commercial organisations
operating within the UK that eradicating slavery is an objective
that both Parliament and the courts are taking seriously. They are
also a reminder that a company can be found liable for compensation
where the acts complained of have been carried out by an agent
– and not by the directing will and mind of the company.
The GLA will soon undergo a number of reforms pursuant to the
Immigration Act 2016, which will see the GLA become the Gangmasters
and Labour Abuse Authority ("GLAA"). The new GLAA will
have a broader remit and stronger powers to investigate modern
slavery, including powers under the Police and Criminal Evidence
Act to search and seize evidence.
The MSA is also expected to be expanded in scope pursuant to a
private members' bill, the Modern Slavery (Transparency in
Supply Chains) Bill, which will face its second reading on 8 July
2016. The Bill will expand upon the current section 54 to require
commercial organisations and public bodies to include a statement
on slavery and human trafficking in their annual report and
accounts and to require contracting authorities to exclude from
procurement procedures economic operators who have not provided
such a statement.
The claimants in both the Kozee Sleep and DJ Houghton cases had
each worked within the supply chains of a number of major retailers
yet the modern slavery had managed to go undetected. All
organisations should therefore ensure that they are continuously
assessing the adequacy and effectiveness of their policies and
procedures for preventing modern slavery within their own
organisations and supply chains. Those who fail to do so may face
criminal prosecution under the MSA and, like DJ Houghton, civil
prosecution to compensate workers.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).