How companies get caught in the slave trade

supplychain

The recent conviction of a UK business owner for a human trafficking offence has been a wake-up call to big businesses to carefully monitor their supply chain, if they are to avoid being connected to slave labour unwittingly.

But with the requirements of the Modern Slavery Act 2015 now in force, companies of every size need to check out where they stand, even if they are a small supplier much further down the supply chain.

With the new regulations now enforceable for any business with a financial year ending on or after 31st March 2016, many smaller companies may have checked the headline criteria and assumed they are not going to be affected by the Act, as the requirements apply only to organisations which carry on business in the UK with a global turnover of more than £36million, including subsidiaries.  Those companies that fit the criteria must provide a statement of the steps they are taking to ensure that no forced labour or human trafficking is taking place in any part of their business or supply chain. The slavery and human trafficking statement must be published on their website, with a prominent link on their homepage.

The catch for smaller companies lies in where they sit in any such supply chain, many of which may be complex, as they are likely to find more questions being asked from the top of the supply chain. The result could be pressure on smaller companies to undertake detailed supply chain auditing themselves, in order to satisfy the demands of those larger companies.

In the case of the recent conviction, the owner of UK bed-making business Kozee Sleep was convicted of conspiracy to traffic by Leeds Crown Court and sentenced to 27 months in prison. Mohammed Rafiq’s trial followed the conviction of two Hungarian gangmasters who were found guilty of supplying Kozee Sleep’s UK factories with slave labour. They had promised Hungarian nationals good wages and housing, but instead the workers found themselves held in squalid conditions, not allowed to travel and made to work up to 16 hours a day, seven days a week, for less than £2 per day. Kozee Sleep’s beds were being supplied to a number of leading high street retailers, who had set out their ethical trading requirements, which Kozee Sleep failed to meet.

According to the Anti-Slavery Commissioner, this is not an isolated incident and many other cases are expected to go to trial. Another, involving Lithuanian workers experiencing inhuman working and living conditions, involved a poultry farm which is in the supply chain of well-known brand Happy Egg.

In the introduction to the corporate guidelines for the Act, Home Secretary Theresa May says: “Modern slavery is a heinous crime that affects communities and individuals across the globe. Organisations with significant resources and purchasing power are in a unique and very strong position to influence global supply chains. It is not acceptable for organisations to ignore the issue because it is difficult or complex.”

If a business fails to produce a slavery and human trafficking statement for a particular financial year, the Secretary of State may seek an injunction through the High Court requiring them to comply. If they still do not comply, they will be in contempt of a court order, punishable by an unlimited fine.

Said Employment Law specialist, Jane Crosby, of Guildford-based Solicitors, Hart Brown: “Following the introduction of the Modern Slavery Act 2015, there is going to be increasingly close attention on how global businesses are tackling potential slave labour in the supply chain. For the £36 million plus companies, there needs to be clear responsibility for compliance with the Act, with due diligence to identify potential risk of contravention of the Act in any part of the supply chain.”
She added: “At first glance, slavery may seem a million miles away from your business, but unfortunately that is not the case, and directors, and buyers in particular, should keep the topic in mind as they trade, whatever their company size.”

This is not legal advice; it is intended to provide information of general interest about current legal issues.

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Jane Crosby

Partner, Dispute Resolution

Jane is an employment and commercial litigation solicitor of more than 15 years' experience. Prior to entering the legal profession, Jane was employed in the...

Partner, Dispute Resolution

Jane Crosby

Jane is an employment and commercial litigation solicitor of more than 15 years' experience.

Prior to entering the legal profession, Jane was employed in the aviation industry. This experience is appreciated by many of Jane's clients who note that she is able to take a commercial and pragmatic approach to any legal issue that they face.

Jane acts for a wide range of individuals and businesses and her areas of specialism include aviation, property related industries and IT. Jane regularly advises on aspects of employment law, such as settlement agreements, employment contracts, policies and procedures, redundancies, equal pay, data protection, issues arising from TUPE and reorganisations, the calculation of holiday pay, bonus and commission payments, disciplinary and grievance issues, dismissal and termination issues, the protection of confidential information and the enforcement of restrictive covenants. Jane gets involved in GDPR training for her clients and she is able to deliver tailored employment law training sessions upon request.

As a commercial litigation lawyer, Jane also deals in shareholder and directors disputes, commercial contract disputes and the enforcement of restrictive covenants.

Jane has been involved in successful high value commercial litigation for clients in the High Courts, she is an accredited mediator and she is a member of the Employment Lawyers Association.

Jane is often asked to write for a number of well known publications, including The Daily Mail, The Telegraph and The Week and she has been interviewed on BBC Radio 4.

Here is small selection of the feedback that Jane has received:

“Jane, I cannot sincerely thank you enough for your wise counsel and am delighted to have made your acquaintance. If I am blessed with a new position somewhere I will hand over my contract in the first instance to you. Likewise, any of my friends, peers, romans and countrymen wanting advice, I will point them in your direction.”

“Jane, you have been most resilient on my behalf for which I sincerely thank you for all your endeavours. I have a tremendous working relationship with Hart Brown and you have undoubtedly compounded this further."

“I appreciated the clarity of advice given at a stressful time”.

“A sensitive and highly professional approach and efficient work in the interests of the client”.

“Your advice, conduct and assistance have been indeed outstanding and very professional but also – and most importantly – very humane”.

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Hart Brown Solicitors is the trading name of Hart Brown LLP registered in England and Wales No. OC 425835 whose registered office is Resolution House, Riverview, Walnut Tree Close, Guildford, GU1 4UX and is authorised and regulated by the Solicitors Regulation Authority (SRA) No. 658593. Members: N Maud, T Pearce, D Knapp, R Campbell and P Grimwood, Partners: J Crosby, L Harrhy, J Jupp, J Lamont, T Mandelli, V McMurtrie, E Moore, S Osborne, S Powell and G Sanders.

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