Modern Slavery Legislation: What SMEs Need to Know

When hearing the word “slavery”, we think of an evil from times gone by. However, human trafficking, slavery and forced labour are very serious concerns even now. 

The Modern Slavery Act 2015 (the “Act”) and Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015 (the “Regulations”) came into effect in 2015 as a result of this.

Under Section 54 (2) (b) of the Act and under the Regulations, companies who supply goods and services and who have a turnover of £36 million or more must publish an annual statement on the measures being taken to eliminate modern slavery in their organisation and their supply chains.
 

How does this affect SMEs?

Enquiries from larger businesses

If you sell directly to other SMEs, or to consumers, the Act is unlikely to affect you.

If, however, you deal with businesses turning over more than £36 million, you are likely to be part of the supply chain that they are required to report on. This means that you are likely to see contractual requirements in new agreements, obliging you to report on how your company operates in respect of the Act.


Tenders, new contracts and contract renewals

Tender documents will now usually include questions about compliance with the Act and associated policies irrespective of the turnover of the company being invited to tender.

Similarly, when contracts are created and renewed, anti-slavery clauses will be included as part of compliance with the Act.

You must be able to point to relevant policies and procedures if you want to win the tender and/or be awarded the contract and continue doing business with the larger company. You could risk losing business if you are unable to do so.
 

What can you do?

Be in a position to provide:
 

  • Information about the structure and supply chain of your organisation.

  • The due diligence processes your business carries out on its supply chains.

  • Details of any part of the business or supply chain where there might be a risk of human trafficking or slavery.
     

If your business operates in a high-risk area such as farming or manufacturing, for example, you may want to query how a particular supplier is managing to provide highly competitive rates compared to others. The Act requires you to take responsibility for not just what you do but also what is done in your name. 


While your business may not be required by law to submit an annual modern slavery statement, being in a position to do so or being able to show you have policies and procedures in place in this regard should boost your credibility and improve relations with any large company that requests one of you.

You can also demonstrate you are a safe, sustainable and ethical company to work with via the SafePQQ product.

As well as the above, you should also look at preventing modern slavery and human trafficking in your own business by doing the following:

  • You should make the appropriate checks on all employees and recruitment agencies, to know who is working for you, or on your behalf.

  • Provide every employee with a written contract of employment and ensure that you pay in accordance with the law.

  • Comply with your legal obligations to ensure health & safety for all your employees and workers, including in relation to working hours, rest breaks and holidays. 

  • Encourage employees and workers to report any suspicions of modern slavery or human-trafficking in your business or supply chains and make it clear that no individual will suffer any detrimental treatment as a result of reporting any genuine concerns, raised in good faith.

  • Ensure that all employees are required to sign a copy of your policy (or where it forms part of your employee handbook) to show that they have read and understood its contents and that all managers are fully briefed and trained on the policy.
     

If you have been asked for a modern slavery statement/evidence of policies and procedures as part of a tender process, or in a client contract, and are unsure how to respond, please get in touch with the Alcumus HR Consultancy team by emailing psm.enquiries@alcumusgroup.com.

Alcumus PSM (People & Safety Management) specialises in human resources (HR) and health and safety (H&S) consulting for small and medium-sized enterprises.
 
Written by Anil Champaneri, Senior HR Consultant