Under section 54 of the Modern Slavery Act 2015 (MSA), businesses with a turnover of more than £36 million must produce an annual report, detailing their efforts to prevent slavery and human trafficking in any part of their business or supply chain. However, a recent Chartered Institute of Building (CIOB) report highlights that many in the construction sector who are obliged to report are in reality giving brief, watered down statements, or are failing to report entirely. This is sobering when reviewed in the context of a 35% increase in 2017 in the number of potential victims of modern slavery submitted to the UK Government’s official registry.
The CIOB’s report, Construction and the Modern Slavery Act, Tackling Exploitation in the UK, examines the UK construction industry’s response to the MSA and the systemic factors that put construction workers at particular risk of exploitation. Those systemic factors include the use of migrant workers; minimum wages; outsourcing models; labour agencies; and a lack of labour standards enforcement. The report indicates that modern slavery in the sector should be considered in the context of exploitative practices, such as excessive working hours, illegal wage deductions, health and safety breaches, intimidation, and bullying.
The CIOB calls for a new approach that goes beyond rebuilding business models and involves open and honest conversations. Construction is a crucial sector within the UK economy. In 2016, the value of new construction work reached its highest level on record at over £99 billion and the sector created over 55,000 new jobs. Nevertheless, the report highlights that such figures mask the fact that ‘the constant pressure on prices is forcing out ethical players. Bogus self employment is eroding the rights of British and foreign nationals. Abuse of the retentions system and late payment are everyday occurrences. Some SMEs complain that they struggle to pay wages on time. It is small wonder that the sector has such an abysmally high insolvency rate’.
The report, which can be read in full here, suggests that the poor annual reports to date are in a large part due to corporate concerns that statements will be used in future prosecutions. It proposes that a negative consequence of the MSA is that some are avoiding compliance by shifting legal responsibility onto their less well-resourced suppliers. A number of recommendations are made to businesses to do more, especially in light of investors increasing their scrutiny of company action. Further, the CIOB emphasises that no initiative will be sustainable without the genuine commitment of senior management.
Following publication of the CIOB’s report, the UK’s Independent Anti-Slavery Commissioner, Kevin Hyland, announced he is to step down from his role. Hyland was appointed in 2014 and was the first commissioner of his kind for tackling modern slavery in the UK. We wish to take this opportunity to thank him for his tremendous contribution.
This article has been co-written with Alicia Clark, a trainee solicitor in the employment team.