Is the Modern Slavery Act 2015 (MSA) beginning to bare its teeth?
The MSA's has been criticised in the past for being all bark and no bite. The lack of enforcement action or penalty within the original legislation being cited as making the legislation a moral compass only. However, recent case law points towards a sea change of approach with both civil and criminal law sanctions being applied.
For example in Antuzia v DJ Houghton Catching Services Ltd  EWHC 843 (QB) the High Court held that the director and secretary of the Defendant company were jointly liable in their personal capacity for the company's failure to pay the national minimum wage, holiday pay and overtime. In directing the company to commit the irregularities, the director had breached his statutory duties under the Companies Act 2006 to promote the company's success (section 172) and to use reasonable care, skill and diligence (section 174); therefore he had not been acting in good faith. Although the statutory duties under the Companies Act 2006 are expressed to apply solely to directors, in this instance, the Judge extended these duties to the company secretary.
Although this 'employment law umbrella' does not address all modern slavery issues and offences which can occur, it does begin to bring life to the potential claims that can arise from these offences and the enforcement action that can and is currently being taken.
Additionally, on 22 May 2019 the Home Office published its independent assessment of the MSA. As anticipated, this final report recommends putting teeth into s54 of the MSA so that all organisations take their responsibilities seriously to audit their supply chains and expand the scope of liability to directors, to do so, it uses existing legislation in the form of the Company Directors Disqualification Act 1986.
The relevant additional recommendations (in a supply chain/corporate context) were proposed in the final report which we have outlined below:
- The removal of s54(4)(b) in the MSA which gives applicable organisations the option to report that they have not taken any steps to address modern slavery in their supply chains; and
- The requirement of organisations to consider the entirety of their supply chain when producing the annual slavery and human trafficking statement. Under this recommendation, if an organisation has not done so, it should be required to explain why it has not and what steps it is going to take in the future.
To note the further considerations the independent review was also included in its final report. We had outlined earlier this year a summary of the draft recommendations proposed in terms of strengthening corporate compliance.
With these recommendations and potential enforcement action in mind, please note our preparation cycle below for those organisations which fall within the scope of the MSA.
If you are unsure whether you fall within the scope of the MSA click here or contact a member of the Belfast Employment team.
Date published: 28 June 2019