Modern slavery is an umbrella term covering practices such as forced labour, debt bondage, forced marriage and human trafficking. Essentially, it refers to situations of exploitation that a person cannot refuse or leave because of threats, violence, coercion, deception and/or abuse of power. 

There are international legal agreements against modern slavery, including the 1926 Slavery Convention, the 1956 Supplementary Convention on Slavery, the 1930 Forced Labour Convention, the 1957 Abolition of Forced Labour Convention and the International Covenant on Civil and Political Rights. 

In addition, there are United Nations International Labour Authority Conventions against the Worst Forms of Child Labour and for Minimum Age. 

See also Legislation and reporting requirements below.

HR has a key role to play in how companies proactively tackle the threat of modern slavery. This includes: 

• understanding the key people risks
• the development of appropriate due diligence and policies
• whistleblowing channels
• ensuring that workers’ rights are communicated, and
• the design of training and grievance procedures. 

HR can help influence the employment practices of the organisation’s suppliers, for example by advising on recruitment, people management and training across the supply chain network. Companies will need to decide how far down the supply chain to look to understand the impact on individuals, starting with tier one (direct suppliers) and then looking at tier two and tier three suppliers. 
New regulations may require companies to consider the impacts of their actions on their value chain and communities, as well as their workforce. Areas where HR needs to exercise vigilance include: 

• debt bondage
• welfare facilities
• health and safety
• accommodation, and
• equality, diversity and inclusion (EDI).

Another important area for HR to consider is to put in place remediation and grievance mechanisms for any individual or group of employees affected by modern slavery. 

Victims of slavery can be any age, gender, ethnicity or nationality. However, HR should be aware that there are factors which contribute to someone’s vulnerability to becoming a victim. These can include: 

• poverty
• lack of education
• living in unstable social, political and economic conditions, or with conflict. 

Certain sectors are particularly at risk, such as:

• construction
• textiles
• food and agriculture
• social care, and
• hospitality. 

The presence of additional intermediaries, such as labour agencies and umbrella companies, generates separation between the worker and the end-user, creating difficulty in distinguishing who is responsible for maintaining employment rights.

HR should also be aware of the risks from underpayment in the workforce or supply chain, which can occur in a number of ways, such as:

• unpaid travel time
• uniform payments for clothing specified by employer dress code
• deductions from wages to provide a fund for workers’ holiday pay
• unpaid time spent undergoing security checks and searches when arriving at and leaving the place of work
• incorrect offsetting (e.g. for accommodation)
• unpaid time undertaking online training.

Underpayment is more prevalent for women, low-paid workers and for those on permanent rather than temporary contracts. 

HR should be mindful of the following, which may indicate roles that are at higher risk of modern slavery:

• roles that are often filled by migrant labour
• roles with low barriers to entry
• roles that are seasonal
• roles that do not require spoken English skills
• roles that are paid at or around the national minimum wage.

To mitigate the risk of modern slavery, organisations should consider the following:

Employment status

Many new models of employment status make it less clear whether someone is an employee or a worker. Fragmentation of the traditional employment relationship can inhibit employee voice, and present real problems for enforcement of labour standards.

What can organisations do?

If organisations are not directly responsible for some of the workers on their sites/projects, they should provide those workers with access to resources that detail their rights and alternative avenues for resolution of labour standards breaches. This could be in the form of posters or short on-site training.

Umbrella companies

Umbrella companies provide a payroll service and pay employees, effectively acting as the employer on behalf of agencies or companies. They can act as gateways to underpayments, charging administration fees and other deductions for services that leave workers financially worse-off and sometimes below the threshold of any national minimum wage or living wage, where this exists. 

What can organisations do?

Only accept the use of umbrella companies in the labour supply chain if they are members of a reputable trade association.

Complex supply chains and subcontracting

Increasingly complex supply chains present enormous challenges for effective labour market compliance. Complexity can result in the complete loss of transparency over who is employed on a given project and this can leave workers vulnerable to exploitation.

What can organisations do?

• Where possible, limit tiers in the supply chain to reduce complexity and raise standards of labour market compliance.
• Maintain an up-to-date mapping of the supply chain and involve suppliers in this process. Include information on worker status.

Understanding workplace rights

The complexity of legislation around workers’ rights can be overwhelming for an individual, and therefore they may be unaware that they are a victim of non-compliance. This is particularly true for lower-end breaches, such as underpayment of any national minimum wage.

What can organisations do?

• Provide advisory resources in multiple languages, tailored to the needs of the sector and geographical location.
• Review payment practices to ensure they are taking account of employee time spent at the workplace, and guaranteeing compliance with any national minimum wage/national living wage. 

Tax avoidance

By falsely applying the status of self-employment, companies may be able to reduce labour and tax costs. There may be an increased risk of labour exploitation as companies become detached from responsibility, and individuals’ avenues for resolution are diminished. This may lead to reputational or tax risks. 

What can organisations do?

Scrutinise supplier contracts. If the pricing looks too low for the agreed labour provision, conduct a thorough audit of the suppliers and the costings.

Organisational response to modern slavery 

The BSI standard BS 25700:2022 requires businesses to “enable modern slavery victims to raise issues and suggestions and seek redress, potentially through a grievance mechanism.”

What can organisations do?

• Encourage ongoing employee and worker voice and involvement, to foster openness and a two-way relationship.
• Offer an internal complaints mechanism where queries can be raised and dealt with in-house.
• Provide information on and access to external complaints mechanisms. Employees and workers may not feel comfortable with internal processes, especially if the exploitation is on the more severe end of the spectrum.

Several countries have introduced national legislation against modern slavery:

The UK Modern Slavery Act 2015  

The UK Modern Slavery Act 2015 introduced a new requirement for companies (including those carrying out charitable, educational or public functions) with an annual turnover worldwide of £36 million or more, supplying goods or services in the UK, to publish a yearly statement setting out what they have done (or not done) in the previous 12 months to prevent slavery and forced labour practices in their own businesses and supply chains.

The legislation recommends reporting on the following six areas: 

• Organisation structure, its business and its supply chains.
• Policies in relation to slavery and human trafficking.
• Due diligence processes in relation to slavery and human trafficking.
• Risk assessment and management.
• Organisational effectiveness in ensuring that slavery and human trafficking is not taking place.
• Training available to staff on modern slavery issues and capacity building. 

The statement, signed by a board director, must be published prominently on the company’s website as soon as possible, and no later than six months (according to Home Office guidance) after the organisation’s financial year end. The Modern Slavery Registry carries over 7,000 statements from nearly 6,000 companies made under the UK legislation.

EU Corporate Sustainability Reporting Directive 2023 and European Sustainable Reporting Standards 2023 

The EU Corporate Sustainability Reporting Directive 2023 applies to EU companies. It also applies to non-EU companies with an EU listing or with EU subsidiaries and branches, who must provide information on working conditions, equal treatment and other work-related rights in the workforce and the value chain. 

Working conditions include secure employment, working time, adequate wages, social dialogue, freedom of association, works councils, collective bargaining, work/life balance, and health and safety. 

Equal treatment includes gender equality and equal pay, training and skills development, employment and inclusion of persons with disabilities, measures against violence and harassment in the workplace, and diversity.  

Other work-related rights include child labour, forced labour, adequate housing, water and sanitation, and privacy. 

Guidance: For boards

The UK Financial Reporting Council has published a report on company reporting practices and guidance for boards, including the following questions for directors who may be expected to seek answers from the senior management team, HR and other departments: 

• Who is responsible for driving a strategy on modern slavery and how do we conduct due diligence of our supply chains, including any mitigating and follow-up actions?
• How do we articulate and communicate what we consider to be acceptable business practices?
• What behaviours are being driven when setting strategy, financial targets and risk profile?
• What are the channels of communication that enable individuals, including third parties, to report concerns, suspected breaches of law or regulations, other improprieties, or challenging perspectives?

Guidance: For pension fund trustees 

The UK Department for Work and Pensions has set up a Taskforce on Social Factors to consider recommendations for the UK pensions sector on how it can better incorporate social factors into investment decisions. The DWP’s Taskforce on Social Factors has issued a guide that includes provisions on addressing modern slavery as a risk factor when investing.

Appendix 3 of the guide deals with assessing asset manager practices on modern slavery, and includes examples of best practice and due diligence questions for trustees. This may be useful to HR practitioners who are asked to advise trustees and board members on how to respond to queries from beneficiaries.

The CIPD’s modern slavery statement 

Useful links: UK

UK Modern Slavery Act 2015

UK Home Office guidance for businesses on slavery and human trafficking in supply chains

BSI - BS 25700:2022 Organisational responses to modern slavery – Guidance 2022 

FRC - Modern Slavery Reporting Practices in the UK 2022

FRC - Supply chain disclosure: FRC Lab insight 

UK DWP Social Taskforce Guide for pension fund trustees 

Gangmasters & Labour Abuse Authority (GLAA) - Human trafficking, forced labour and debt bondage

Useful links: International 

International Labour Organization – P029 – Protocol of 2014 to the Forced Labour Convention, 1930 

International Labour Organization – Forced labour, modern slavery and human trafficking

United Nations Human Rights Office of the High Commissioner – International standards

Useful links: European  

CIPD Voice - New EU workforce reporting requirements likely to have implications for the UK 

European Commission - Corporate sustainability reporting

Local Government Association - Tackling modern slavery: council case studies

Useful links: NGOs   

The Unseen app provides a simple guide to recognising the signs of modern slavery and human trafficking, and reporting concerns in confidence.  

Modern Slavery Intelligence Network (MSIN)

Stop the Traffik

Stronger Together - tackling modern slavery in supply chains

Slave-Free Alliance

Anti-Slavery International – What is modern slavery?

ShareAction Global Slavery Index 

KnowTheChain

Useful links: Investors 

World Benchmarking Alliance – 2023 Corporate Human Rights Benchmark 

As You Sow – Current resolutions

Principles for Responsible Investment (PRI) – Rathbones group case study