What HR needs to know about Modern Slavery legislation?

Authors: Aaron Goonrey and Coral Yopp (Lander & Rogers)

This article was originally published in Lexology.

Slavery is a real issue in Australia, and new legislation designed to tackle it will affect a surprising number of businesses. Here’s a breakdown of how.

You look at the clock and it’s 6:00 pm, you’re supposed to be at your mother-in-law’s birthday dinner in half an hour but your boss wants that report, the one you’ve barely started, on her desk first-thing tomorrow morning. You have no choice but to make the call – “Sorry, I won’t be able to make it to dinner…the boss has me chained to the desk“.

Putting aside whether you’re secretly glad to be missing your mother-in-law’s birthday dinner, we bet you’ve made the joke about being ‘chained to your desk’ or ‘trapped at work’, as if you were a slave. However, it might surprise you to know that slavery is a real issue in Australian workplaces.

Modern slavery is not so different to the idea that may spring to your mind. It’s characterised by extreme working conditions such as low or no pay, excessively long hours and no recreation days. Modern slavery is common among young and migrant workers and in industries such as agriculture, construction, hospitality and domestic services.

On 27 June 2018, the Modern Slavery Bill 2018 (NSW) received assent, making the Modern Slavery Act 2018 (NSW) (NSW Act) the first of its kind in the country.

The NSW Act addresses the findings and recommendations in the report on the inquiry into human trafficking in NSW. That report left very little to the NSW Government’s imagination about the prevalence of modern slavery in NSW and more broadly, Australia. For instance, the report found that despite a notable increase in reported offences of forced labour, there have been no prosecutions under the forced labour provisions of the Criminal Code Act 1995 (Cth) since they were introduced in 2013.

You might think that the NSW Act doesn’t apply to you, because your company is above the use of slave labour. However, the Act creates broader obligations that businesses should be aware of. In particular, commercial organisations with at least one employee in NSW and who have a total annual turnover of at least $50 million are required to publish an annual modern slavery statement. At a minimum this includes, details of:

          • the organisation structure, business and supply chains;

          • due diligence processes in relation to modern slavery in the organisation and its supply chains;

          • parts of the organisation and supply chains where there is a risk of modern slavery taking place and steps taken to mitigate that risk; and

          • the training about modern slavery available to employees.

The NSW Act does not define “supply chain” and does not indicate how far down the supply chain the reporting obligations extend. It’s likely that this will be detailed in the regulations yet to be released.

Under the NSW Act, penalties of up to 10,000 penalty units ($1.1 million) can apply to companies for offences including failing to prepare a modern slavery statement, failing to publish a statement publicly in accordance with regulations and knowingly providing false and misleading information in a modern slavery statement.

In addition, the NSW Act provides for an independent Anti-Slavery Commissioner, charged with the role of advocating and promoting action to combat modern slavery and maintaining a public register of modern slavery statements.

Will times be changing even more?

On 28 June 2018, the Turnbull Government introduced the Modern Slavery Bill 2018 (Federal Bill). Similar to the NSW Act, the Federal Bill would require entities to submit a modern slavery statement every 12 months, addressing the actions taken to manage modern slavery risks in supply chains.

Despite being a step in the right direction, the Federal Bill has been criticised for only applying to entities with annual revenues of at least $100 million (double the threshold of the NSW Act). The Federal Bill has also been criticised for lacking enforcement measures and for neglecting to introduce an independent Commissioner.

The NSW Act also targets supply chains, so focusing just on your own business is not enough. Knowing what your suppliers (and their suppliers) are doing is important too. You should also now consider how the obligation to prepare a modern slavery statement might impact your organisation’s reporting processes.

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