From the TUC

Modern Slavery Act: What have we got?

31 Mar 2015, by in International

So the Modern Slavery Bill has finally become the Modern Slavery Act. Unfortunately however its inadequacies flagged-up in my blog of 25 February were not addressed. On the very same day following a debate in the Lords  my colleague Owen Tudor was able to report that the Government was defeated on an amendment which would have once again given Overseas Domestic Workers the right to change their employer. This however proved to be a short lived triumph. Sadly this important amendment was defeated in the Commons and does not appear in the Act. So what have we got?

Certainly we have a piece of legislation that is better than what was initially proposed. Legislation which goes beyond merely consolidating existing law. A prime example of this is the section on transparency in supply chains. It is a provision which was not included in the original draft Bill and one which met considerable resistance from Government.

Even in this regard however, not all is well! As previously noted the supply chain requirements are not underpinned by any legal sanctions. Companies are free to ignore them as they wish! The Act does however say that complying companies have to have their annual statement signed off at a high level. In the case of a PLC it must be approved by the board of directors and signed off by a director. If the statement is inaccurate or inadequate in terms of what the Act states then the signatory will not be subject to legal action. Ultimately the only sanction is reputational damage to the individual and company.

Where do we go from here? There are two answers to this question; one of which addresses the short term and the other is on a longer timeframe. In the short term the TUC will be responding to the Home Offices Modern Slavery and Supply Chains Consultation – a response which hopefully will be endorsed by all members of the Ethical Trade Initiative (ETI). A key issue being how large will a company have to be before it will be ‘required’ to report on its supply chain.  The proposal is that the company size will be measured by turnover. The consultation document gives a number of turnover thresholds of which the TUC/ETI favours the lowest which is £36 million; a figure used in the Companies Act to define a large company. This turnover figure will apply to all companies who have a presence in the UK and is based on their global turnover. It is estimated that a £36 million threshold would mean that the supply chain provisions would apply to 12,259 companies. Again it is a great pity that the Government did not accept the responsibility of ensuring that this information is pulled together into one searchable website.

The closing date for the consultation is 7 May! Yes the date of the General Election, which nicely frames the question, what should be done with this Act in the longer term? What is achievable in the foreseeable future may well depend on the political complexion of the Government which emerges. Clearly the TUC believes that many of the debates that have occurred over this Act need revisiting and different conclusions drawn!