A few weeks ago, DJ Houghton Chicken Catching Services became the first UK company to be found liable to compensate victims of modern slavery.
Lithuanian workers who had been trafficked to the UK brought a civil case claiming compensation for being severely exploited by the Kent based gangmaster company that employed them.
The police had raided houses controlled by the company in 2012 and freed several suspected victims of human trafficking at that time.
The trafficked men who brought the claim were working in supply chains producing premium free range eggs for McDonalds, Tesco, Asda, M&S and the Sainsbury’s Woodland brand.
The court ruled that the workers were owed compensation for:
- Failure to pay the agricultural minimum wage;
- Charging prohibited work finding fees;
- Unlawfully withholding wages; and
- Depriving workers of facilities to wash, rest, eat and drink.
The amount of compensation will be assessed at a future hearing but is expected to run into hundreds of thousands of pounds for unpaid wages alone. A further 10 Lithuanian workers who were also employed by the company and suffered similar treatment, have now also brought claims.
This is the first time that a UK company has been found civilly liable for victims of trafficking. This is a stark reminder to businesses that fall within the scope of the Modern Slavery Act to ensure that modern slavery is eliminated from their supply chains.
It is clear that in both criminal and civil actions, the subject of modern slavery is now being taken very seriously. In light of this development, we have outlined the key aspects of the Modern Slavery Act that employers should be mindful of.
What is Modern Slavery?
Modern Slavery encompasses crimes of slavery, servitude, forced or compulsory labour and human trafficking.
The Modern Slavery Act 2015 was introduced to combat such practices and recognises that UK businesses have a role to play in tackling these crimes. The Act came into force in October 2015.
Who is affected?
Businesses that supply goods and services in the UK and have a global turnover above £36 million are now required to publish an annual slavery and human trafficking statement for each financial year that ends on or after 31 March 2016. This statement must disclose what steps the organisation has taken to ensure that human trafficking is not taking place in any of its supply chains or its business; or state that it has taken no such steps. This aims to ensure that businesses are transparent about what they are doing to tackle modern slavery and human trafficking.
However, and this is an important point to note, even if your business does not fall into the above category in terms of turnover, if you supply goods or services to a company that does, you are part of its supply chain and could be called upon to demonstrate that you have sufficient measures in place to ensure your business is free from modern slavery practices.
Clients may now include anti-slavery and human trafficking clauses into their commercial agreements which are intended to ensure that as part of their supply chain, suppliers agree to its anti-slavery and human trafficking policy and to other measures aimed at ensuring that no slavery or human trafficking is taking place in their supply chain. They may also require suppliers to produce their own annual slavery and human trafficking statement as a condition of a continuing business relationship. It is anticipated that such provisions will become commonplace as a consequence of the new legislation to ensure that companies and their supply chains are free from modern slavery.
What should a statement include?
The Act does not state specifically what information needs to be included in the statement but it is likely to cover the following:
- The organisation's structure, business and supply chains;
- Its policies in relation to slavery and human trafficking;
- Its due diligence processes in relation to slavery and human trafficking in its business and supply chains;
- The parts of its business and supply chains where there is a risk of slavery and human trafficking taking place, and the steps it has taken to assess and manage that risk;
- Its effectiveness in ensuring that slavery and human trafficking is not taking place in its business or supply chains, measured against such performance indicators as it considers appropriate; and
- The training about slavery and human trafficking available to its staff.
Businesses are being encouraged to publish their statements as soon as is reasonable practicable after the end of the relevant financial year. If businesses have a website then it must be published there.
What is the effect on my business?
If a business does not produce a statement where it is required to do so, or states in their statement that they have taken no steps, aside from statutory sanctions, it could damage their reputation or brand.
If you are part of a supply chain and do not comply with your client’s request to produce your own statement or commit to theirs, you could risk losing that contract and undermining commercial relations and could also damage your business’s reputation. It would be sensible to ensure that all elements of your business and its supply chain are free from modern slavery practices and have appropriate checks in place to evidence this.
Just Employment Law can help with further advice on all such matters including the drafting of appropriate policies.