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The Modern Slavery Act 2015: Corporate Statements Relating to Slavery and Human Trafficking

The Modern Slavery Act 2015: Corporate Statements Relating to Slavery and Human Trafficking

28 February 2018

Thousands of workers are estimated to be victims of modern slavery, trapped working at hand car washes in forecourts and car parks. If you run an independent garage that employs a company or individuals to provide valeting or car washing services, it is your responsibility to ensure that you have taken steps to reduce the risk of human trafficking and slavery, and produce a modern slavery statement if you deem necessary.

The RMI legal team has produced the following advice:

Human Trafficking and Slavery is a problem that has increasing come to the forefront of our consciousness over the last few years. In 2015, the UK Government passed the Modern Slavery Act which required certain companies providing goods and services within the UK to produce a statement in each financial year detailing the steps taken within the previous year to ensure that modern slavery is not taking place within their supply chain.

As we are coming to the end of another financial year many companies may be considering whether they are required to produce such a statement.

Here are a few definitions:

Commercial Organisation - means a body corporate, or a partnership, wherever incorporated that carries on business or a part of its business in the UK

Turnover - for the purposes of the act the turnover is defined as “The amount derived from the provision of goods and services… after the deduction of trade discounts, VAT and any other taxes on those goods and services.” . This includes the turnover of any subsidiaries.

The important aspect here is the fact that any calculation of turnover should include not only subsidiaries but also activities outside of the UK. As only a small proportion of an organisations turnover may be within the UK to be caught, if turnover globally is £36 million or more a statement is required.

Supply Chain

There is no definition within the act as to what will constitute a business’s supply chain. It is likely that this will therefore be a practical question decided on a case by case basis.

When deciding what should be included it is advisable to consider the products and services being offered by the organisation, how any products and services are delivered to the organisation and by the organisation to its customers

For example, a business may offer a hand car wash and valeting services from its premises. Where the business invoices the customers directly, or the valet is provided as part of a wider service such as a repair or MOT, then this will have to be included within any Modern Slavery Statement and any statement will have to include details of what steps have been taken to identify and reduce modern slavery when providing the hand car wash and valeting services. However, where the hand car wash is a separate legal entity independent to the organisation any statement will this will not need to be included.

The Statement

The Act does not prescribe the form the statement must take, but it does include what it has to contain:

a. Details of the organisations structure, its business and supply chain;

b. Its policies relating to slavery and human trafficking;

c. Its due diligence processes for its business and its supply chains;

d. The parts of the business where the risk is identified, and the steps taken to manage the risk;

e. Its effectiveness in ensuring that slavery and human trafficking is not take place in its business or supply chains;

f. The training provided to staff about slavery and human trafficking.

Statutory guidance has been produced to help organisations identify what matters under points (a) to (f) above could be included in their statements. However, we have produced a precedent statement that can be used by members as a base upon request.

What to do next

Whilst the government has encouraged all companies to consider producing such a statement the requirement is only on organisations with a turnover of £36 million or more. The first step is therefore to consider whether you fit this criteria as a statement is required as this will have to be filed along with your end of year accounts.

If a statement is required, or if you wish to voluntarily produce one you will then need to audit your organisation and consider the products and services you supply, what risks are present regarding slavery and human trafficking and what steps can be taken to reduce and remove these.

Conclusions

This advice is general in nature and it will need to be tailored to any one particular situation. As an RMI member you have access to the RMI legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us on 0845 305 4230 any stage for advice and assistance as appropriate.