Modern Slavery Act Compliance and Supply Chain Statements

Modern Slavery in Brief

Modern Slavery Act 2015
Statement on the steps to prevent slavery and trafficking, mandatory for businesses over £36m turnover
Supply chain due diligence and worker reporting routes

What the Modern Slavery Act Covers

The Modern Slavery Act 2015 consolidates and strengthens earlier UK legislation on slavery and human trafficking. It is structured in three parts that organisations need to think about:

The substantive offences in Sections 1 and 2 - holding a person in slavery or servitude, requiring forced or compulsory labour, and arranging or facilitating the travel of another person with a view to exploitation. These apply to any person and carry a maximum sentence of life imprisonment.
Victim protection in Part 5 - including the statutory defence in Section 45 for victims compelled to commit certain offences as a direct consequence of their slavery or trafficking situation.
Transparency in supply chains in Section 54 - the requirement on commercial organisations carrying on a business in the UK with a global turnover of £36 million or more to publish an annual statement setting out the steps they have taken to ensure modern slavery is not taking place in their business or supply chains.

Most UK businesses below the £36m threshold are not directly required to publish a Section 54 statement, but the substantive offences and the wider risk picture still apply. Many organisations below the threshold publish statements voluntarily, particularly where their customers are larger organisations whose Section 54 statements depend on supplier assurance.

Modern Slavery in Practice

For most UK organisations, the realistic exposure is not direct slavery offences but supply chain risk. The headline cases - victims working in car washes, in nail bars, in agricultural gangs, in care homes, in cleaning contracts and in construction labour supply - involve sectors that touch ordinary business supply chains in ways most procurement managers do not initially recognise.

Higher-risk supply chain factors include:

Goods or services sourced from jurisdictions with high slavery prevalence indicators - the Walk Free Global Slavery Index is a common reference point
Sectors with low-margin, labour-intensive operations - construction, agriculture, hospitality, cleaning, garment manufacture, electronics assembly
Use of labour providers, agencies or sub-contractors where direct visibility of working conditions is limited
Long supply chains where second-tier and third-tier suppliers are not visible to the contracting organisation
Migrant or vulnerable worker populations in the workforce, particularly where language, immigration status or accommodation arrangements create dependency

Modern slavery in the UK is not what folk picture either. It is rarely chains and locked rooms. It is more often a worker who never sees their wages because the agency takes them, a person living ten to a house owned by their employer, a passport held for safekeeping that is never returned. The signs to spot are the practical ones - workers who do not handle their own pay, who cannot leave the workplace freely, who do not have their own ID. If procurement teams or site managers see those signs in a contractor's workforce, that is the issue raised on the spot, not after the next audit.

The Section 54 statement is the headline obligation but it is not the only thing I look at on modern slavery. Below the threshold, I expect to see modern slavery considered in the supply chain risk assessment, in supplier onboarding due diligence, in the staff handbook and in induction training. Above the threshold, I expect the statement itself plus the underlying evidence that supports it - the supplier audit programme, the training records, the slavery incidents that have been reported, the whistleblowing routes that allow workers and their advocates to raise concerns.

What I do not expect to see is a Section 54 statement that is identical to the one published the previous year, with no evidence of any underlying activity. The statement is meant to reflect actual steps taken, not a stock paragraph that gets recycled. That pattern is one of the more common findings in this area.

Modern slavery sits naturally alongside the other financial crime topics in an integrated control framework. The same supplier due diligence that supports anti-bribery, anti-money laundering and anti-tax-evasion compliance can support modern slavery checks - the questions added to the supplier questionnaire are different, but the process is the same. For organisations operating an ISO 37001-style management system, modern slavery becomes one of the risks the system addresses rather than a separate workstream.

The Section 54 Statement

For organisations meeting the £36 million threshold, Section 54 of the Modern Slavery Act 2015 requires an annual statement. The statement must be:

Approved by the board of directors (or equivalent governing body) and signed by a director
Published on the organisation's website with a link in a prominent place on the homepage
Updated annually for each financial year

The Act does not prescribe the content but the Home Office statutory guidance recommends six areas:

The organisation's structure, business and supply chains
Its policies in relation to slavery and human trafficking
Its due diligence processes
The parts of the business and supply chains where there is a risk of slavery or trafficking, and the steps taken to assess and manage that risk
Its effectiveness in addressing slavery and trafficking risk, measured against performance indicators
The training available to staff

A statement that simply commits to preventing modern slavery and reports no identified cases is technically compliant with Section 54 - the Act does not mandate content - but it provides limited assurance and tends to attract criticism. Substantive statements that describe actual due diligence activities and findings are the norm for organisations that take the obligation seriously.

The UK government also operates a Modern Slavery Statement Registry - voluntary submission to which makes statements publicly searchable. Many large organisations submit voluntarily; mandatory submission has been proposed but has not yet been brought into force.

The Substantive Offences

Sections 1 and 2 of the Modern Slavery Act 2015 create the criminal offences:

Section 1 - holding another person in slavery or servitude, or requiring them to perform forced or compulsory labour
Section 2 - arranging or facilitating travel of another person with a view to exploitation, whether or not consent was given

Both offences apply to individuals and corporate bodies. Maximum sentence is life imprisonment for individuals; corporate fines are unlimited. The offences are intentionally broad - "exploitation" includes not just sexual exploitation and forced labour but securing services by force, threats or deception in any context.

The most common pathway by which an ordinary business becomes implicated is by knowingly or recklessly engaging contractors or labour providers whose workforce includes trafficked or enslaved people. Due diligence on labour supply is the central control.

Connection to Other UK Legislation

Modern slavery sits in a wider UK legal framework that includes:

The Immigration Act 2016 - right to work checks help identify cases where workers do not have authorisation, which is often a marker of trafficking or coerced labour
The Gangmasters (Licensing) Act 2004 - regulates labour providers in agriculture, food processing and shellfish gathering through the Gangmasters and Labour Abuse Authority (GLAA)
The Employment Rights Act 1996 and National Minimum Wage Act 1998 - protect basic terms that, if violated systematically, may indicate forced labour
The Health and Safety at Work etc. Act 1974 - applies to all workers regardless of employment status, including those in informal or coerced labour arrangements
The Proceeds of Crime Act 2002 - covers the financial benefits derived from slavery and trafficking offences

International Context

Modern slavery legislation outside the UK has expanded significantly since the Modern Slavery Act 2015. The Australian Modern Slavery Act 2018 introduced a similar transparency requirement at AUD 100 million turnover. The California Transparency in Supply Chains Act 2010 was an earlier model focused on retailers and manufacturers above $100 million in worldwide gross receipts. France's Duty of Vigilance Law 2017 and Germany's Supply Chain Due Diligence Act 2023 take a different approach, requiring active human rights due diligence rather than transparency reporting. The EU Corporate Sustainability Due Diligence Directive (CS3D), adopted in 2024, will apply mandatory human rights due diligence across larger EU and EU-trading companies.

For organisations operating across these regimes, the practical answer is to design due diligence processes to the highest applicable standard - typically the active due diligence model required by the EU and Germany - and apply it across the group. Transparency reporting then satisfies the UK and Australian requirements as a by-product.

Practical Advice

For organisations above the £36 million threshold, the Section 54 statement is the visible output but the underlying due diligence framework is what makes it credible. The toolkit below provides the policy and management system elements that support both the substantive compliance and the statement itself.

For organisations below the threshold, a simpler approach works - a modern slavery policy, supplier onboarding questions covering modern slavery risk, basic staff awareness training and a clear route for raising concerns through the whistleblowing arrangements.

alphaZ document	How to use it
ISO 37001 Anti-Bribery Toolkit	The financial crime management system toolkit. While built around ISO 37001, the leadership, supplier due diligence, training and monitoring elements transfer directly to modern slavery controls. Most organisations use one integrated framework across bribery, AML, fraud and modern slavery.
P-47 Modern Slavery Compliance Policy	The compliance-focused policy aligned with the Section 54 statement structure. Covers the organisation's commitment, due diligence approach, training and reporting routes. Suitable for organisations above the £36m threshold and those preparing for it.
P-4 Anti-Slavery and Human Trafficking Policy	The operational anti-slavery policy. Sets out the prohibition on slavery and trafficking in the organisation's operations, the obligations on staff to report concerns, and the consequences of breach. Suitable for organisations below the threshold.
ER9 Legal Register	The legal register entry for the Modern Slavery Act 2015 sits here, alongside the related employment, immigration and health and safety legislation that supports modern slavery compliance.

Note: subscribers to alphaZ documents can download all of the documents above as part of the subscription.

Frequently Asked Questions

Does Section 54 apply to my organisation?

Section 54 of the Modern Slavery Act 2015 applies to commercial organisations with a global turnover of £36 million or more that supply goods or services and carry on a business or part of a business in the UK. Turnover is calculated at group level, including subsidiaries inside and outside the UK. Public bodies are not directly covered by Section 54, though many publish modern slavery statements voluntarily. Organisations below the £36m threshold are not required to publish a statement but are still subject to the substantive offences and to customer expectations on supply chain assurance.

What needs to be in a modern slavery statement?

The Modern Slavery Act 2015 does not specify mandatory content, but Home Office statutory guidance recommends covering six areas: the organisation's structure, business and supply chains; its modern slavery policies; its due diligence processes; the risk areas in its business and supply chains and the steps taken to manage them; its effectiveness in preventing slavery and trafficking, measured against KPIs; and the training available to staff. Statements vary in length from a single page to twenty or more, scaling with the size and complexity of the organisation.

Who needs to sign the statement?

For a company, a director must sign the statement following approval by the board of directors. For an LLP, the statement must be signed by a designated member following approval by the members. For other body corporates, an equivalent senior figure following equivalent approval. The signature requirement is intended to drive board-level engagement with modern slavery risk - signatures by junior staff or compliance functions miss the point of the obligation and tend to attract criticism.

What are the warning signs of modern slavery?

Common indicators include workers who do not have control of their own identity documents or bank accounts, workers who appear to live at the workplace or in accommodation provided by their employer with little freedom to leave, workers who cannot communicate in English and have no access to interpreters, workers paid in cash by a third party rather than directly, and workers who are reluctant to speak in front of supervisors or contractors. The Gangmasters and Labour Abuse Authority (GLAA) and the Modern Slavery Helpline (08000 121 700) publish detailed indicator lists. Suspicions should be reported to the GLAA, the Modern Slavery Helpline, or police on 101 (or 999 in immediate danger).

How does modern slavery link to ISO 37001?

ISO 37001 is specifically about anti-bribery management systems, but the structure transfers naturally to modern slavery. The same elements - leadership commitment, risk assessment, due diligence on third parties, policies, training, monitoring and review - underpin both. Most organisations operating an integrated financial crime or compliance management system add modern slavery as one of the risks the system addresses, rather than running a separate workstream. The supplier due diligence that supports anti-bribery typically extends to cover modern slavery, AML and tax evasion through additional questions on the same questionnaire and the same audit programme.

UK Legislation

Further Resources