ECJ EUROPEAN Cleaning Journal

While the scale of modern slavery in the UK has long been overlooked, since 2015 the Government’s increased focus on modern slavery in UK and beyond has rendered it essential that commercial organisations are seen to be treating modern slavery with the focus and gravity that it deserves. UK barrister Ben Douglas-Jones, QC, writes exclusively for ECJ.

While the scale of modern slavery in the UK has long been overlooked, since 2015 the Government’s increased focus on modern slavery in the UK and beyond has rendered it essential that commercial organisations are seen to be treating modern slavery with the focus and gravity that it deserves. This article explains why, with the stakes – both legal and reputational – higher than ever before, it is crucial that businesses take action to eradicate modern slavery in their own organisation and in their supply-chain.

The legislative framework

In 2015 the UK Government took the long-overdue step of codifying the various pieces of legislation on modern slavery and human trafficking into a single statute, the Modern Slavery Act 2015, which established the following four modern slavery offences:

i.    Holding a person in slavery or servitude (section 1(1)(a) Modern Slavery Act 2015);

ii. Requiring a person to perform forced or compulsory labour (section 1(1)(b) Modern Slavery Act 2015);

iii. Human trafficking (section 2(1) Modern Slavery Act 2015); and

iv. Committing any offence with the intent to commit a human trafficking offence (section 4(1) Modern Slavery Act 2015).

In addition to the four substantive modern slavery offences, section 54 of the Modern Slavery Act 2015 also imposes an obligation upon certain companies to produce a slavery and human trafficking statement at the end of each financial year. Section 54 requires any commercial organisation which has a turnover of £36 million (€40 million) or more and that carries out business in the UK to publish a statement setting out the steps it has taken within the financial year to eradicate modern slavery both within its own organisation, and anywhere in its supply chain(s).

It is section 54 that has proved to be the focal point for commercial organisations.

Why the cleaning industry?

The scale of modern slavery in the UK is often grossly under-estimated. In 2014, the Home Office estimated that there were between 10,000 and 13,000 victims of modern slavery in the UK. The National Crime Agency (NCA) has since then assessed the level of modern slavery within the UK as having consistently risen since then, with the NCA reporting a 36 per cent increase in victims referred to its National Referral Mechanism between 2017 and 2018.

Moreover, labour exploitation accounts for a substantial proportion of modern slavery offences within the UK: 57 per cent of the 6,993 individuals identified through the National Referral Mechanism in 2018 were the victims of labour exploitation.

The cleaning industry in particular has been identified as high-risk area for modern slavery and human trafficking, with the Home Office’s 2017 Typology of Modern Slavery Offences identifying the cleaning industry as being rife with labour exploitation. A particularly common form of exploitation in the industry involves victims being brought into the UK, often from EEA countries, by offenders who then source the victims legitimate employment through agencies.

However, the offenders retain control of the victims’ bank accounts, and while the victim may appear to be legitimately employed and earning a wage, in practice the victim is subjugated by the offender, who retains the majority – if not all – of the victim’s earnings.

It seems that the demographics of those employed in the cleaning industry render it particularly vulnerable to this sort of exploitation. In the UK, the cleaning industry employs over 70,000 people, with these employees working for approximately 40,300 organisations. Eighty-seven per cent of these organisations are micro-businesses who employ fewer than 10 people, and who will not fall within the duties imposed by section 54 of the Act.

Those organisations within the cleaning sector who are obligated to file a slavery and human trafficking statement are typically large facilities management companies; these companies comprise only one per cent of the market but provide work to over half of all cleaning employees, often through sub-contracting or agency contracts. These arrangements provide limited oversight and scrutiny of working conditions, and therefore increase the risk of exploitation.

Finally, a large proportion of workers within the cleaning industry are also migrant workers (for example, 68 per cent of cleaners in London were born overseas). These workers may be particularly vulnerable to exploitation as a result of their over dependence on employers, caused by factors such as debts accrued during migration or the pressure to remit income to family members in their country of origin.

The risks facing commercial organisations

Modern Slavery Compliance Statements - As noted above, section 54 of the Modern Slavery Act 2015 requires large commercial organisations carrying out business within the UK to produce a slavery and human trafficking statement. Understandably, section 54 has become something of a focal point amongst companies in the cleaning industry when considering the issue of compliance and their obligations.

However, from a compliance perspective, section 54 is something of a red herring. The obligations imposed under section 54 go no further than requiring the production of a statement, and section 54 imposes no obligation upon a company to actually take steps to reduce or eradicate modern slavery within its business or supply chain(s).

No power of enforcement

Furthermore, there is no power of criminal enforcement for companies failing to produce a slavery and human trafficking statement. While a company which breached its duty under section 54 may be made subject to a civil injunction compelling it to produce a slavery and human trafficking statement (breach of which would amount to a contempt of court), there are myriad reasons why this would be very unlikely to occur in practice:

i.  A company’s breach of its section 54 obligations may not be readily obvious, as the Government has not introduced a central register where organisations have to file their Modern Slavery Compliance (in contrast to, say, Australia); and

ii. It is unlikely that the Secretary of State would incur the costs of seeking injunctive relief simply to force publication of a short statement which may say that the company has taken little or no action.

Instead, the true significance of slavery and human trafficking statements flow from their commercial importance, and it is here that a company’s implemented anti-slavery and human trafficking policies become of great significance.

In the current climate (particularly with the cleaning industry having been identified as an industry in which modern slavery is particularly common), it is essential that companies are seen to be taking the issue seriously by taking proactive, proportionate steps to eradicate modern slavery in its business and in its supply chain(s). A comprehensive, tailored set of policies and procedures designed to reduce and eradicate the risk of modern slavery, which is clearly documented in a section 54 statement, is often the best way of publicising a company’s stance on modern slavery.

Indeed, a comprehensive and detailed slavery and human trafficking statement which sets out a business’ policies and procedures will often be necessary to secure lucrative contracts with other organisations, even for companies with an annual turnover of less than £36 million (€40 million).

This is because large commercial organisations will often be obliged to conduct due diligence on potential agents and sub-contractors to ascertain what steps they are taking to eradicate modern slavery in their supply chain as part of the contracting company’s own policies to eradicate modern slavery within their supply chain. Companies that do not appear to be treating modern slavery as a serious issue (either through the publication of inadequate slavery and human trafficking statements, or by failing to publish such a statement at all), risk being blackballed and missing out on these business opportunities.

Indeed, it is for this reason that even those companies who are not mandated to produce a slavery and human trafficking statement (for example, because their annual turnover is less than £36 million), can reap significant advantages by implementing tailored, proportionate anti-slavery policies, and publishing the details of these policies in a slavery and human trafficking statement.
Substantive offences under the Modern Slavery Act 2015

A further risk that businesses ought to be alive to is the possibility that a company (or its directors) could, in principle, be prosecuted for encouraging or assisting a substantive offence under the Modern Slavery Act 2015 by failing to implement proper anti-slavery policies and procedures.

Under the terms of the Interpretation Act 1978, a ‘person’ is defined to include corporate bodies and, as such, a company can be charged with a modern slavery offence under section 1, 2 or 4 of the Modern Slavery Act 2015 just as any individual can be. A company can be said to have the requisite mental element to commit an offence if someone of sufficient seniority within the company – for example, a director – has that mental element, which allows it to be imputed onto the company as a whole.

The circumstances in which an individual – or company – can be said to have encouraged or assisted an offence are detailed in the Serious Crime Act 2007, and are broad:

44.(1) A person commits an offence if -

(a) he does an act capable of encouraging or assisting the commission of an offence; and

(b) he intends to encourage or assist its commission.

(2) But he is not to be taken to have intended to encourage or assist the commission of an offence merely because such encouragement or assistance was a foreseeable consequence of his act.

45.(1) A person commits an offence if—

(a) he does an act capable of encouraging or assisting the commission of an offence; and

(b) he believes -

(i) that the offence will be committed; and

(ii) that his act will encourage or assist its commission

Crucially, under section 47(8)(a) an ‘act’ includes ‘a failure to act’.

It must be said that it is unlikely that a business who failed to implement any procedures or policies to eradicate modern slavery would be prosecuted for an offence under section 44 of the Serious Crime Act 2007, as it would be difficult for the Crown to prove that they did so intending that a modern slavery offence be committed.

However, there is no reason in principle why a company or its directors could be charged with encouraging or assisting a modern slavery offence under section 45 of the Serious Crime Act 2007, if it could be proved that the director failed to implement any policies or procedures, and did so believing that a modern slavery offence would be committed and appreciating that the company’s failure to take any steps to rectify this would assist the commission of the offence. It is for this reason that it is particularly crucial companies do have in place proper policies and procedures to prevent slavery and human trafficking.

Future developments

Finally, the direction of travel in this area of law suggests that the importance of compliance is only going to become more of an issue going forward, and it is essential that companies have in place proper policies and procedures from as early a stage as possible to ensure that they are not left behind the curve.

The present regime, in particular the absence of any criminal sanctions for companies who breach their section 54 obligations, has been criticised as being toothless, and it is likely that the legislation will be tightened in the near future. For example, the Modern Slavery (Transparency in Supply Chains) Bill (which is currently making its way through Parliament) has, among other things, proposed:

i.  Where applicable, mandating companies to explain why they have not taken any steps to eradicate modern slavery in their slavery and human trafficking statement;

ii. Publication of a list detailing all commercial organisations required to produce a slavery and human trafficking statement; and

iii. Disqualifying companies from being awarded public contracts if they have failed to produce a slavery and human trafficking statement as required.

The natural progression from all this may well be the creation of a new criminal offence penalising commercial organisations to take reasonable steps to prevent modern slavery within its business and within its supply chain, in much the same way that section 7 of the Bribery Act 2010 punishes companies for failing to prevent bribery.

Conclusion

Despite being overlooked for so long, modern slavery must now firmly be on every business’ agenda. It is essential, both now and going forward, that commercial organisations are alive to the devastating consequences that modern slavery has in the cleaning industry and take real, proportionate steps to eradicate it. The consequences for those who fail to do so could be huge.