Modern slavery – a warning for business

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On 20 January, this year Mohammed Rafiq, who ran a bed-making business based in Dewsbury called Kozee Sleep, was convicted in the Leeds Crown Court of human trafficking. Rafiq’s conviction follows that of two Hungarian men who were found guilty last year of having supplied Rafiq with slave labour and is, reportedly, the first of a UK business owner/manager for human trafficking offences in the UK.

The Court heard how men were trafficked from Hungary, with the promise of good jobs and housing, and were forced to live in cramped, squalid conditions, working minimum 60-hour weeks.

Strikingly, Kozee Sleep supplied a number of High Street retailers, including John Lewis and Next, had signed up to the retailers’ ethical trading policies and audits undertaken by the retailers had disclosed nothing untoward.

The activities of rogue businesses are one thing but the case has two important lessons for more reputable businesses as well.

The first concerns the employment of illegal workers. Under the Immigration, Asylum and Nationality Act 2006, an employer will be deemed to have committed an offence if found to have employed a person aged 16 or over who is subject to immigration control unless that person has current and valid permission to be in the UK and has valid permission to do the type of work they have been employed to do. Employers found to be in breach face fines of up to £20,000 per illegal worker. On top of this, the Government’s Immigration Bill, currently working its way through Parliament, will extend the criminal offence of knowingly employment an illegal immigrant to include circumstances where an employer had “reasonable cause to believe” that a person is an illegal worker, with an increased custodial sentence on indictment for that offence to five years.

It is vital therefore that employers implement the necessary procedures to ensure they are not employing illegal workers.

The second lesson concerns the Modern Slavery Act 2015 (the Act), which came into force last October. Section 54 of the Act obliges UK businesses (or overseas businesses “carrying on business” in the UK) and which have an annual turnover of £36 million to publish an annual statement on their website which explains the steps they have taken to combat slavery and human trafficking in their supply chain.

With the coming into force of the Act, UK businesses will need to take a much more proactive approach towards the audit of their supply chains than they may have taken in the past. They will really need to “get to know” their suppliers (and the suppliers of those suppliers), whether based in the UK or overseas. The Government has published guidance to assist with compliance and suggested a focus in the statement on the following areas:

  • information about the business’s structure, its business and supply chains
  • the business’s policies relating to modern slavery
  • its due diligence processes in relation to slavery and trafficking in its business and supply chain
  • the parts of the business where there is a risk of modern slavery and the steps it has taken to assess and manage that risk
  • its effectiveness in ensuring that modern slavery is not taking place, measured against appropriate performance indicators
  • information about the training about slavery and human trafficking available to staff.

However, each business is different, facing different risks, and we are advising clients on the steps that they can take to ensure an effective understanding of their supply chains, which address the particular risk areas they face.

Compliance with the reporting obligation can be enforced by an injunction but the greater cost to a business of non-compliance is the reputational consequences that may flow. The lesson from Mohammed Rafiq’s conviction is that “modern slavery” may be a lot closer to home than reputable UK businesses might think.