Modern Slavery is broadly a term covering slavery, forced
labour, servitude and human trafficking. It has been described as
"the great human rights issue of our time" by Theresa
The Modern Slavery Act 2015 was introduced as part of an effort
to tackle the issue by imposing a requirement on every large
business carrying on any part of its business in the UK (including
companies registered abroad but which engage in commercial
activities in the UK) having a total annual turnover of £36m
or more to produce a slavery and human trafficking statement for
each financial year of the organisation. 'Turnover' means
the turnover of that organisation and the turnover of any of its
subsidiaries. Groups can make one statement but may have to post
this on several websites depending on how complex their business
The Modern Slavery Act statements must set out what companies
are doing to identify and mitigate risks of modern slavery taking
place within their company and in their supply chains.
For more details on the corporate reporting requirements under
the Modern Slavery Act, please refer to the
October 2015 blog posted by our Employment team.
A large number of Real Estate companies are affected by the
Investors using companies
incorporated outside the UK that own UK investment properties
having a turnover of at least £36 million will have to comply
(taking subsidiaries into account for the turnover
Landlords and their asset managers
need to think which of their contracts (or sub-contracts) might be
sensitive and the examples we can think of will be cleaning
companies or the employment of agency staff.
Even where a managing agent does not
itself have an obligation to report because of the size of its
business, it may receive requests for information regarding its
Tenants must also be aware that
landlords form part of their supply chains on the basis that
landlords supply them with services so may require information each
year and may request ongoing compliance covenants in their
There is a lot of publicity already
about the need for the construction sector to be aware of the
strong risks of exploitation of labour which exist in their supply
A year has passed since the Act came into force and the
reporting has been criticised in some areas for not going far
enough towards tackling modern slavery.
Our Employment team's most recent post reports that
companies tended to explain their structures and policies covering
modern slavery well, but failed to adequately describe the
practical measures being taken to assess their effectiveness.
Examples of statements published by Real Estate companies
It was also found that contractor relationships are a key
omission from statements. For the Real Estate sector, and
particularly in the context of the contractor and sub-contractor
relationships mentioned above, these clearly will be key points to
The negative conclusions coming from the research into these
initial company reports are not unexpected given that most
companies are still attempting to find the most effective ways of
reporting and many lack sufficient resources to conduct due
diligence and to support supplier improvements to tackle the
Be aware that changes to the legislation to make it stricter are
already pending and Real Estate companies will need to ensure that
they are adequately aware of their increasing obligations.
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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