Modern Slavery Act 2015 – The importance of compliance for UK construction businesses

We consider the importance of complying with the Modern Slavery Act 2015 (the MSA 2015) and highlight the key issues that organisations in the industry must be aware of to ensure compliance.

The Modern Slavery Act 2015

This MSA 2015 makes it a criminal offence for organisations to be involved in “modern slavery practices”. The statute provides for the illegality of slavery, servitude, forced or compulsory labour and human trafficking.

Further, the statute imposes an obligation on larger businesses (those with an annual turnover of at least £36 million) to publish a Slavery and Human Trafficking Statement on an annual basis. This statement is intended to set out the steps the organisation has taken to ensure modern slavery is not taking place in their business or supply chains. Although the obligation is only to produce a statement (and that statement could be that no steps have been taken) the intention is that organisations will be encouraged by the public and their customer/stakeholder base to review their business and supply chains and implement effective measures to combat modern slavery.

Such steps may include:

  • carrying out a risk assessment
  • training staff on awareness and your organisation’s obligations
  • including modern slavery assessments within supplier and sub-contractor due diligence
  • implementing modern slavery policies and procedures appropriate to your business and the risks faced.

This statement must consider the entirety of the organisation (not simply the parts of an organisation which are based within the UK) and its supply chain.

The 2015 Act was highly significant as it represented a declaration from the UK government that it is committed to ensuring all forms of modern slavery cease to exist in the UK.

Sub-Contractors

Whilst the obligation to provide an annual Slavery and Human Trafficking Statement is placed only on those organisations with a turnover in excess of £30 million; many other companies find that they are often required to provide statements and undertakings in their contracts with such companies. Undertakings frequently take the form of ensuring that staff are trained and that the company has suitable policies in place.

The Construction Industry

Recently, there has been concern about the prevalence of modern slavery in the construction industry. The Chartered Institute of Building released a report earlier this year, “Construction and the Modern Slavery Act: Tackling Exploitation in the UK”. In this report, it was highlighted that in the EU, “construction ranks second only to the sex industry as the sector most prone to exploitation”.

Modern slavery is prevalent within the construction industry and it affects many vulnerable UK nationals and immigrants. As far as UK victims are concerned, the most vulnerable to modern slavery are the homeless, those with significant debts, those with learning difficulties and those suffering from addictions. Immigrants are equally susceptible, particularly those who are indebted to individuals in their home territories. Additionally, immigrants are often deceived by false recruiters.

Further, the quality of the Slavery and Human Trafficking Statements published by some in the construction industry are deemed to be of poor quality. Many construction businesses fail to even publish their statements on time. Moreover, many businesses within the industry do not comply with the requirement for statements to be approved at the highest level, for example, by being signed by directors or sanctioned by the board.

How do you identify modern slavery?

Modern slavery is increasingly difficult to identify in practice. However symptoms such as unusually high fatigue and malnourishment among workers may be indicative that modern slavery is occurring. Other signs include a lack of ready access to identification documents and salary being paid directly to a third party for the purposes of paying debts or paying for accommodation.

If you have assessed that there is a risk of modern slavery in your organisation you can consider arranging training for staff to raise their awareness of the prevalence of modern slavery and the appropriate procedures to be followed in the event of modern slavery concerns.

At MacRoberts, we offer e-learning packages which can assist your organisation in this regard.

What are the consequence of non-compliance?

It is crucial that your organisation complies with the provisions of the Modern Slavery Act 2015. If not, your organisation faces the following consequences:

  • a court injunction (interdict in Scotland) which forces your organisation to publish its Slavery and Human Trafficking Statement
  • suffering reputational damage in the event your organisation is identified as a perpetrator of modern slavery offences
  • losing future business – in tendering activities, developers often require businesses to offer assurances in relation to their compliance with the 2015 Act.

Breaching the 2015 Act and non-compliance with modern slavery contractual obligations can have a significant reputational impact on your business as well as being devastating for the lives of those working in your supply chain. Therefore modern slavery awareness and prevention should form an integral part of your regulatory and compliance processes and procedures.

This article was co-authored by Charlotte Fleming.

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