Legal update

UK Government publishes updated guidance on modern slavery

The Home Office recently published updated statutory guidance on transparency in supply chains, which provides further details on the UK Government’s expectations for modern slavery statements. Organisations that meet the £36 million turnover threshold should ensure that they publish an annual modern slavery statement in line with statutory obligations and the Government’s updated guidance.

Background

Under section 54 (Transparency in Supply Chains) of the Modern Slavery Act 2015, certain organisations must publish an annual statement setting out the steps they take to prevent modern slavery in their business and supply chains.

A commercial organisation must publish an annual statement if it satisfies the following criteria:

Is a ‘body corporate’ or a partnership, wherever incorporated or formed

Carries on a business, or part of a business, in the UK

Supplies goods or services

AND has an annual turnover of £36 million or more

Failure to comply may result in the Secretary of State bringing civil proceedings in the High Court for an injunction. If the organisation then fails to comply with the injunction, they will be in contempt of a court order, which is punishable with an unlimited fine.

The statement must be approved and signed by an appropriate senior person in the business – i.e. a director, designated member or partner, depending on the type of organisation. Directors may be in breach of their fiduciary duties if, for example, they do not exercise reasonable care, skill and diligence when approving and signing modern slavery statements.

Updated guidance

The guidance seeks to clarify the Government’s expectations for modern slavery statements. It provides further detail on the type of content organisations can disclose under the six key areas set out below. The guidance also notes that statements should be:

  • published on the organisation’s website in a prominent place, including a link that is directly visible on its homepage and marked e.g. ‘Modern Slavery Act Transparency Statement’;
  • uploaded to the Government’s voluntary modern slavery statement registry; and
  • published within, at most, six months of an organisation’s financial year end.

Organisational structure, its business and its supply chains:

describing the organisation’s structure and providing an overview of its supply chain, including the countries it operates in.

Organisational policies:

providing a summary of the organisation’s internal policies relevant to modern slavery, including its employee and supplier codes of conduct, and explaining how they are communicated and enforced.

Assessing and managing risk:

describing how the organisation identifies and assesses modern slavery risks and disclosing how often risk assessments are updated.

Due diligence in relation to modern slavery

providing a summary of actions undertaken to mitigate modern slavery risks in operations and supply chains.

Training

providing an outline of the training delivered to internal and external stakeholders to support the organisation’s response to modern slavery.

Monitoring and evaluation

setting goals to ensure that the organisation makes yearly progress in identifying, preventing and responding to modern slavery, and disclosing who in the organisation is responsible for tracking the implementation of relevant measures.

Further potential developments

The updated guidance follows the House of Lords Modern Slavery Act Committee report, published on 16 October 2024, which suggested that publication of statements should be widened and compliance with the requirements of the Act should be enforced, both for companies and public bodies.

The Government’s response to the report, published on 16 December 2024, included commitments to: update the section 54 statutory guidance (which it has now done); and strengthen penalties for non-compliance and create a proportionate enforcement regime, which may require legislative reform in the future. The Government has, more broadly, pledged to review how to use legislative and non-legislative measures to tackle forced labour and increase transparency in supply chains, with next steps to be set out in due course.

Key takeaways for sports organisations

Sports teams and organisations should ensure that they comply with the obligation to publish an annual modern slavery statement, where required to do so. This obligation is likely to apply to a large number of organisations in the industry, given the relatively low turnover threshold of £36 million.

Although the government’s guidance is not mandatory, it is highly instructive. Hence, in-scope organisations should ensure that they read and follow the guidance carefully when preparing their modern slavery statements.

More broadly, organisations in the sports industry should ensure that they:

  • put in place thorough policies and procedures relating to modern slavery;
  • conduct regular risk assessments to identify and assess modern slavery risks in their operations and supply chains;
  • carry out thorough due diligence on third party suppliers; and
  • implement proportionate measures to mitigate any specific modern slavery risks where identified.

Finally, stakeholders should continue to monitor ongoing developments in this area, given the increased scrutiny on modern slavery and, in particular, the government’s commitment to strengthening penalties for non-compliance with the transparency requirements under the Act.