The Modern Slavery Act – understanding your obligations

Posted in : Back to Basics on 24 June 2019
Gareth Walls
A&L Goodbody LLP
Issues covered:

In the third of our ‘Back to Basics’ video series, Gareth Walls, Partner and Head of the A&L Goodbody Employment and Incentives team, discusses the implications of the Modern Slavery Act for Northern Ireland Employers.  He outlines the compliance requirements and considers how these might be achieved through monitoring and auditing. 



Modern Slavery Act 2015 

So today I'm going to talk about the Modern Slavery Act 2015 and how that applies to employers in Northern Ireland. And I think it's worthwhile starting just to say, you know, we do live in very interesting times. This is legislation that came out in 2015, very unheralded, very quiet, and its principal focus quite rightly was in relation to human trafficking, sex trafficking, child trafficking, etc.

But actually it's only when you get under the skin of the legislation, and particularly you look at Section 54 of the Act, you see the corporate responsibility. So ultimately, the corporate responsibility appears at Section 54, which is entitled Transparency in Supply Chains.

And the other thing I think it's important to understand with this legislation is that is what I term iterative or learning legislation. There are certain entry-level requirements, which are absolutely obligatory in relation to certain employers with a turnover of north of 36 million, but I'll come back to that.

And secondly then, there is the compliance piece, and the compliance piece is interesting because the home office have written out of the vast majority of employers in Northern Ireland and GB recently and, in fact, asked them to consent to compliance and to the standards within the Modern Slavery Act.

Compliance with Legislation

So I suppose we need to ask the question compliance well with what? And secondly, what does compliance look like, i.e. the how?

So first of all, we'll look at the what. And initially, it's a very simplistic thing. Section 54 is relatively short, it deals with transparency in the supply chain, and it requires compliance with the overriding ethos of the Modern Slavery Act.

But that in turn references and introduces a lot of other legislation, like the working time directive. Whether that's EU or domestic, it doesn't really matter. It deals with working time, working hours, rates of pay. The minimum wage, national minimum wage, which always changes, heavily regulated, etc., and indeed the national living wage are anticipated within the Modern Slavery legislation.

There is legislation which deals with children or young workers and given there is such a focus on apprentice workers, and that is not very well understood in Northern Ireland at the minute, again, there’s an impact of that in relation to Modern Slavery as well.

Of course, it also obliquely references all other equality legislation, and given that in Northern Ireland, we have quite a rich history of employment legislation in the equalities sphere, combine that with the uncertainty brought into Northern Irish practice whenever we have the Equality Act in 2010 which applies in GB but not here, what other employment equality legislation are we actually being asked to comply with?

And then, of course, there's also the health and safety at work principles. And again, that's another one for employers in Northern Ireland, where the Health and Safety Executive Northern Ireland. They seem similar but not entirely identical with health and safety protocol in GB.

How Can Compliance be Achieved?

So that's the next question I suppose you have to consider as well. How do we comply with this? And first of all, it starts with a very simple entry-level statement on your website, which says that, "Yes, I am compliant with the auspices of the Modern Slavery Act 2015", etc. But what does that actually mean?

First of all, it means monitoring. Monitoring not just your own workforce, your own working practices, but also monitoring your supply chain. That is a very significant process and that is where the iterative piece in the legislation comes, and we'll come back to that.

But then, in addition, there is training. There is training of your senior management team and then having to cascade that down through effectively all your employees, and then those who work again within your organisation, whether those are agency workers, temporary workers, seasonal workers, etc. Everyone should know what modern slavery is and should understand what their obligations are.

When we get into the audit sampling of our own supply chain, that requires a very bespoke piece of work, where we understand exactly what our audit sample might look like. It is not appropriate to simply pick a sample of other employees . . . or sorry, suppliers in an alphabetical list, for example, because if that only catches 2%, 3% of the turnover in terms of services provided, it's not going to be a representative sample.

So one does have to objectively justify your sample. Consider what works for your business. Consider who's in your supply chain and particularly countries of origin for the supply chain, for example. Some are on the high-risk register internationally and consequently, we shouldn't perhaps focus on those entities in your audit sample.

But again, this is where the iterative piece comes in because, actually, you can't simply roll out that same sample year on year on year. You need to continue to monitor your supply chain, continue to consider changes to your audit sampling.

And then, of course, audit sampling is only one part of it. You have to report on your audit sample. And whilst the report is not necessarily filed yet with the home office or any government department, it is a report which their inspector will want to see if and when they ever attend your premises. Not only will they want to see the report, they want to see everything which went behind that, including your training regime for your employees.

So there's a learning piece to this as well, and every year one would expect your sample to change, your training to change, and the reporting level to change. And that is, by the way, regardless of whether or not you are an entity with a turnover of 36 million or otherwise. You can expect that figure to change over time. One would expect that figure to reduce not increase, so that over time more and more employees . . . or employers fall within the audit threshold of the MSA.

But in any event, it's so important to remember you may be an entity lucky enough to have a turnover of north of £36 million per annum, but the reality is even if you're not, you're almost guaranteed to be in the supply chain of an entity who is. So you will be receiving the Modern Slavery Act questionnaires over time and you need to know how to respond to them, because this is, as I say . . . I started with this and I'll finish with this. This is an iterative piece of legislation. It is going to continue to develop and grow.

And much in the same way as the DDA in 1995 is unrecognisable from the first piece of legislation which was introduced, this piece of legislation as well is going to impact on every employer in Northern Ireland and GB in the very short term.

This article is correct at 24/06/2019

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Gareth Walls
A&L Goodbody LLP

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