Chicken or the egg? – landmark corporate modern slavery ruling

A landmark civil case is a warning to businesses to take appropriate steps to make sure modern slavery and human trafficking is eradicated from their supply chains. This is the first time that the English Court has awarded damages against a company in relation to modern slavery issues. The 6 Lithuanian claimants were supplied by DJ Houghton to chicken farms across the UK. These chicken farms were part of the supply chains of well-known supermarkets.

The claimants asserted that they were victims of trafficking. They were made to travel for several hours between farms without pay, housed in overcrowded and dirty accommodation, subjected to intimidation and abuse and were paid per chicken caught, without ensuring they earned the minimum wage. The High Court ruled that the claimants were owed compensation for DJ Houghton’s failure to pay the agricultural minimum wage, for the charging of prohibited work-finding fees, for unlawfully withholding wages, and for depriving the workers of facilities to wash, rest, eat and drink.

Even though the proceedings were based on breach of contract, negligence, harassment, assault and unpaid wages and did not directly focus on the Modern Slavery Act 2015, this outcome provides a cautionary tale for any businesses that work with suppliers.  Claims relating to modern slavery, human trafficking or treatment of workers are likely to result in damage to reputation of all parties involved regardless of who is directly responsible.

The reporting requirements under the Modern Slavery Act 2015 (‘MSA’) has widened the scope of a company’s responsibility (click here for our previous article). The obligation under the MSA applies to organisations that have an annual turnover of £36 million above to publish a Slavery and Human Trafficking Statements detailing the steps the organisation has taken to combat modern slavery and human trafficking both within the organisation and in its supply chains.

This is not a question of the proverbial “chicken or the egg”. Taking action required by the MSA must come first. Modern slavery is a real issue affecting businesses in potentially complex supply chains and abuses can, if appropriate, be enforced in the court. How confident are you that your suppliers are not acting like the defendants in this case? Will our client’s be seeking re-assurance? More importantly, have you got your Modern Slavery Act 2015 compliance process in place with a view to publish your first Slavery and Human Trafficking Statement in September 2016?

Lawspeed can help with Modern Slavery Audits, advice, drafting internal and external policies and suitable templates to assist your compliance. If you have a burning question about this topic please send email to [email protected] or telephone on 01273 236236. For those of you that are ARC members don’t forget that you can get in touch via the ARC helpline.

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