Increased focus on construction sector to tackle labour exploitation

In 2015 the Modern Slavery Act introduced the obligation on certain large businesses to publish an annual modern slavery and human trafficking statement. The aim of the statement was to encourage businesses to tackle any issues of forced labour and human trafficking within their business and supply chain.

Specifically, the need to publish an annual statement applies to those large businesses carrying on business in the UK with an annual turnover exceeding £36 million per annum.

Those businesses caught should have already published their statements, and be updating them on an annual basis. Construction has been identified as one of the sectors most prone to labour exploitation with a flexible labour force and supply of building materials being identified as two key factors. As a result of this the Chartered Institute of Builders has published a report called ‘Building a Fairer System: tackling modern slavery in the construction supply chain’, which identifies eradication of recruitment fees as a key step to preventing exploitation of migrant workers. You can access the report here.

The report refers to the findings of the TCIS report in September 2017 that ranked construction as a mid-performer on reporting with approximately 30% of eligible companies publishing statements. The TCIS has been contacting all businesses who have failed to publish a statement with varying responses, and the government is about to turn up the pressure.

Earlier this month the government announced that it will be writing to the chief executives of 17,000 businesses who have so far failed to publish a modern slavery statement and telling them to do so. It will also inform them that businesses who continue to fail to publish a statement risk being named as in breach of law.

The government has also launched an independent review into what more can be done to strengthen the effectiveness of the Modern Slavery Act. This includes consideration of how section 54 of the Act (which sets out the transparency obligations for large businesses) might be amended to impose more robust reporting requirements. We envisage this may also include the creation of a formal register of statements and more severe sanctions for non-compliance.

Businesses in the construction sector should therefore ensure that they have complied with their transparency obligations. Failure to do so not only risks reputational damage and sanctions but also a negative impact on the business’ ability to win tenders for work.

If your organisation would like to discuss any aspect of the transparency requirements under the Modern Slavery Act 2015, please contact Sarah Ozanne or Anthony Hollands in the CMS Employment team.