Modern Slavery - Update

Much focus has been given over the past nine months to the efforts made by Government to maintain people in employment through the Job Retention Scheme and their efforts to support business with various loans and grants. There has been much posted and said on-line and in the media about employee welfare. Many businesses have been engaged in a struggle to survive. Some have succeeded, in that struggle, and others have failed.  

Medium and large companies, are having to prepare for the rigours of IR35. Larger businesses, those with a turnover of more that £36 million have an obligation to publish a Modern Slavery Act statement each year to report on the steps they have taken, and are taking, to eliminate modern slavery. For many the risk of being involved in modern slavery through their supply chains will be limited but the pandemic has brought a renewed focus on modern slavery and there are future steps proposed for reform in this area.

Government Guidance 

In the light of the pandemic the need to report on modern slavery can be delayed by up to six months without penalty, BUT each business will have to explain why it was necessary to delay the publication of the statement. 

In April 2020 the Government issued guidance about addressing and reporting on modern slavery risks during the C-19 pandemic this indicated that businesses will need to consider how fluctuations in demand and changes in operating model may have led to new / increased risks of Modern slavery.

To address that issue the MSA Statement should consider:

• The actions they have taken in the most recent period.
• New risks may have taken precedence over previously planned activities.
• How they can demonstrate the ways in which they monitored risk and adapted activities and priorities in response to the issues posed by the pandemic.

For many businesses due to report this month the pandemic probably came too late for them to be able to have taken any meaningful action in the last reporting period, but there is ample time to consider the impact of the pandemic on the supply chain ahead of the next report.  

The Guidance also recognised that some workers may be more vulnerable to modern slavery as a result of the pandemic, it therefore recommends:

• Ensuring local / government guidelines are implemented throughout the supply chain.
• Prioritising engagement with suppliers including paying for previously placed orders – it recognises that some may be cancelled but that this may place those in the supply chain at risk. 
• Workers should still be able to access grievance procedures.
• Ensuring that the business and its suppliers are not using the need for increased recruitment (if applicable) to allow the most vulnerable to be exploited and therefore maintaining rigorous checks.
• Considering the need to revise / renew risk assessments to take account of emerging risks.

It is also recommended that businesses should consider which parts of their workforce/supply chain are particularly vulnerable and keep their Board of Directors updated on emerging / heightened risks.

The Future

In 2019 the Government commenced a consultation on reform to the MSA regime. It published its response to that consultation in September 2020.

The response commits the Government to “an ambitious package of measures to strengthen and future proof the MSA’s transparency legislation”. This includes: 

(a)    Requiring MSA statements to cover mandatory areas – this will be, as a minimum, the current voluntary areas and they will consider how additional topics can be included. The Government has said that it will publish guidance to highlight the importance of transparency, risk based action and industry level challenges and best practice approaches to reporting.

(b)    There will be a requirement to publish on a Government portal.

(c)    There will be a single reporting deadline (30 September) and reporting will be over a defined period 1 April – 31 March.  

(d)    Enforcement options will be considered further.

(e)    MSA statements will have to include the date of approval by the Board and sign off by a Director.

(f)    Group MSA statements will have to name the entities covered by the Statement.

(g)    Public Bodies will be required to report on Modern Slavery.

 
Modern Slavery is relevant to all. Ensuring decent working conditions for those in the supply chain is important. The risk faced by tech businesses will vary, depending upon the nature of the work they undertake, but it is important given greater transparency that the issue of modern slavery is taken seriously by all.