The Modern Slavery Act – Implications & Recommendations for SMEs
The Modern Slavery Act (‘the Act’) was originally passed in March 2015 in an attempt to alleviate child and slave labour, including excessive working hours and unsafe working conditions, from supply chains.
Lisa Outram, Solicitor in the Employment team at The Wilkes Partnership, considers the implications of this legislation.
A supplemental provision has since been added to Part 6 of the Act which came into force during October 2015. This clause requires all UK companies with a turnover of at least £36million to provide the government with annual statements detailing the measures that have been taken to reduce slave labour.
What are the implications for SMEs?
This legislation is, however, also intended to have a knock-on effect on smaller businesses which are part of supply chains to ensure that they too remain free from any form of slavery.
In the event that slavery was identified within the supply chain of a large company, that organisation could be deemed to have committed a business crime and be liable to pay a fine.
The risk for SMEs is reputational damage, loss of business and/or potential disputes with larger companies in some circumstances.
What steps can SMEs take to protect themselves?
Notwithstanding the above, a recent survey undertaken by the Chartered Institute of Procurement and Supply (‘the CIPS’) has indicated that the majority of SMEs are unaware of the Act and have taken no steps to consider or deal with this issue both within their own organisations and within their supply chains.
Lisa Outram explains that, “Following the findings of its survey, the CIPS issued some helpful recommendations which smaller businesses may wish to consider to protect themselves as far as possible. These include ensuring that members of staff are paid in accordance with the national minimum wage, training employees as to signs and risks of modern slavery and undertaking regular inspections of the company’s premises.
Lisa Outram adds that, “It is also essential that all small businesses carry out thorough immigration checks prior to employment for all members of staff. Furthermore, SMEs may wish to review their supply chains and supplier contracts moving forwards to ensure that any risks of slavery are minimised.”
To discuss what implications the Modern Slavery Act has for you or your business, please contact Lisa Outram or any other member of the Employment Team, on 0121 233 4333.