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Modern slavery: stricter reporting requirements (and harsher penalties?)

Employers to whom the transparency requirements in the Modern Slavery Act apply will face stricter reporting requirements and possibly civil penalties for non-compliance.

The government has published its response to a 2019 consultation on the scope of the Modern Slavery Act 2015 (MSA). The response has endorsed many of the recommendations but there is as yet no timetable for any of the changes actually to be introduced. There are no plans to alter the £36m turnover threshold.

In summary, the changes will be as follows:

Modern slavery statements

  • The six reporting areas currently suggested in the guidance to the MSA will become mandatory, i.e.:
    • the structure and nature of the organisation
    • its policies in relation to slavery and human trafficking
    • its due diligence processes
    • how particular areas of risk in the business and supply chains are identified and the steps taken to mitigate those risks
    • the organisation’s 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 and resources available to staff regarding slavery and human trafficking
  • If organisations have taken no steps within any of these areas, that will need to be stated (and they’ll be encouraged to explain the reasons).
  • Modern slavery statements will have to state the date the statement was approved by the Board and the names of the entities covered in the statement (this is currently recommended best practice).
  • New reporting areas may be added, e.g. remediation and future plans.

New government reporting service

  • Currently, modern slavery statements only have to be published on the organisation’s website.
  • In future, they will have to be published on a central government portal (currently under development).

Reporting deadline

  • All organisations will report on the same 12-month period from April to March and will have six months to prepare their statement in advance of the annual single reporting deadline of 30 September.

Public sector

  • The s. 54 transparency in supply chains provisions of the MSA will be extended to public bodies with a budget threshold of £36m or more.
  • Currently they are not required to produce modern slavery statements, though some do so voluntarily.

Enforcement

  • Enforcement of the MSA currently is weak (there are no financial penalties to failure to publish a modern slavery statement) and relies more on potential reputational damage to those organisations which do not abide by the MSA’s requirements.
  • While the government’s response to the consultation does not confirm whether civil penalties for non-compliance will be introduced, it states that it will issue a further update on such penalties ‘in due course’ and that it is considering this in line with the development of a new single enforcement body for employment rights.