When we first hear the word ‘slavery’, the idea of the “shackles and transatlantic ships” of the past is commonly what springs to mind. It may not be so common however to fully comprehend that the term ‘slavery’ transcends deeply into today’s society and shockingly, currently affects more than 40 million people worldwide – more than at any other time in history. Modern slavery is very much real and whether you’re a contractor, business owner or employee of a company, it is an issue that needs to be tackled head on.
What exactly is modern slavery?
In a nutshell, modern slavery is the violation of a person’s human rights, which will ultimately have a serious effect on their overall wellbeing. More elaborately, the government website defines modern slavery as:
“the recruitment, movement, harbouring or receiving of children, women or men through the use of force, coercion, abuse of vulnerability, deception or other means for the purpose of exploitation. It is a crime under the Modern Slavery Act 2015 and includes holding a person in a position of slavery, servitude forced or compulsory labour, or facilitating their travel with the intention of exploiting them”
Sadly, a handful of vulnerable people, such as those experiencing poverty and exclusion can - through no fault of their own - find themselves forced into exploitative conditions, often in search of better opportunities for themselves and their families. The Modern Slavery Act 2015 has been designed to ensure that such activity remains a crime in the UK, protecting the welfare of those who need it the most.
Examples of modern slavery
Forced labour – forced work or services carried out by an individual against their will, and/or under a threat of harm or punishment. Victims may work for low wages or nothing at all and work is involuntary or forced due to threats. Generally speaking, working and/or living conditions are poor.
Trafficking – human traffickers coerce, threaten and use violence to recruit and force individuals into prostitution, forced labour, marriage, sexual gratification and other criminal offences
Bonded labour – the most common and widespread of modern slavery whereby money is borrowed, and people are then ‘forced to work’ to pay off debt, often their employment conditions and/or debt are then out of their control
Domestic servitude – victims are working for little or extremely low pay, poor conditions and and/or violent treatment (cleaning, cooking, childcare living with their ‘employer’)
Marriage – Marriage can be forced against peoples will, with child marriages included.
Slavery of children – Illegal work and exploitation of children for; marriage, work, soldiers, trafficking and domestic slavery
And how does modern slavery affect me?
You may consider the risks and effects of modern slavery to be low for UK businesses and workforces or believe that your supply chain and their workers have only minimal involvement, but slavery risks still remain prevalent in today’s working world.
HMRC are shifting focus onto monitoring supply chains as they continue to find non-compliance, illegal working practices and fraud across multiple business sectors. Check out our range of services which ensure that you can demonstrate your due care and not incur any undue financial risk here.
Let’s take the above example of ‘forced labour’ in relation to a UK based employer:
You (the end client) currently engage with a contractor via their own limited company. They bring onto site their friend - a ‘recommended labourer’ with no documents or bank account details, but who has emailed to say he is happy to subcontract via his friend’s Limited Company and have his wages paid directly into his friend’s bank account.
Sounds kosher right? Well, what can often be the case is that the main contractor is actually keeping a % of the workers money, who is now being paid below national minimum wage.
Have you exercised enough due diligence to establish modern slavery is not taking place with this supplier (as well as NMW/RTW breaches)?
You (the end client) require 5 new labourers to begin on a new site and a current contractor has found all 5 subcontractors ready to start on Monday. They have provided the contractor with all their documents, they are legal to work in the UK and as usual, you pay the money directly to the current contractor’s Limited Company. Again, this all sounds okay right?
Although the men are paid the full amount into their own UK personal bank accounts, behind closed doors, the 5 men are living in squalor conditions in 1 room with only 2 beds for all 5 of them. They have also had their passports confiscated until accommodation debts have been paid off.
Have you exercised enough due diligence to establish modern slavery is not taking place with this supplier?
Now these examples may feel extreme but modern slavery exists in more ways than the above in the UK and it is therefore extremely important that your supply chain is fully compliant in UK tax and employment law. You can visit our blog based around supply chain due diligence for further information.
How can Bar2 help?
UK businesses with an annual turnover of 36 million or more must produce an annual slavery and human trafficking statement. This statement will explain the steps they are taking to ensure their supply chain are non-complicit to modern slavery in their operations.
Although currently there is no financial or criminal offences for businesses that fail to comply, the government are within their rights to take businesses to the high court in order to request compliance. If a case were to be brought to the attention of the media, such bad press could of course negatively affect a business’s reputation and brand value.
Our amazing compliance and risk consultants at Bar2 offer free reviews and a full audit of your labour supply chain to ensure that your business remains compliant.
We explore modern slavery and employment categorisation for your sub-contractors, worker claims, immigration, right to work, Kittel and VAT fraud - just to name a few!
To get signed up, please contact our Compliance & Risk team below!