Modern Slavery and the Changing Face of Recruitment
July 25, 2024Categorised in: Laws & Regulations, News, Recruitment
Modern slavery is an escalating problem in the UK amidst a growing risk of worker exploitation, with current levels even worse than ever predicted. Claire Johnson, compliance expert and former criminal investigator for the UK Government and Gangmasters and Labour Abuse Authority (GLAA), examines why this could be, and considers what recruiters can do to tackle the issue.
Modern slavery is a crime and a violation of fundamental human rights. It takes various forms, such as slavery, servitude, forced and compulsory labour and human trafficking, all of which have the deprivation of a person's liberty by another to exploit them for personal or commercial gain in common.
Types of modern slavery includes sexual and labour exploitation, criminal exploitation – such as county lines drug rings – domestic servitude, and organ harvesting, as well as human trafficking and people smuggling.
Today, modern slavery delivers the third biggest income for organised criminals, is the third most profitable crime in the world, and generated £150billion in profits last year (2023).
The high and growing numbers of individuals in modern slavery is due in part, to the labour shortages challenging almost every sector, undocumented workers in a shadow economy, and businesses grappling with supply chain pressures, increased costs and materials shortages.
The GLAA and Modern Slavery Act
On 5 February 2004, at least 21 Chinese undocumented migrants were drowned by an incoming tide at Morecambe Bay in North West England, while harvesting cockles off the Lancashire coast. Fifteen other labourers from the same group managed to return safely to shore.
During the subsequent investigation and trial, it emerged that the labourers were inexperienced, spoke little or no English, and were unfamiliar with the area. The Chinese gangmaster who organised the trip and two associates of his were found guilty of manslaughter, of breaking immigration laws and other crimes, and were sentenced to several years in prison.
The Gangmasters Licensing Authority (GLA) was established on 1 April 2005 by the Gangmasters (Licensing) Act 2004, passed in the aftermath of this disaster at Morecombe Bay. The authority was handed a remit of preventing the exploitation of workers in the fresh produce sector — agriculture, horticulture, shellfish gathering, and all associated processing and packaging.
On 30 April 2017, the GLA was renamed the Gangmasters and Labour Abuse Authority (GLAA) as part of reforms under the Immigration Act 2016. Described as the foremost intelligence and investigative agency for labour exploitation in the UK, the GLAA’s role is to work in partnership with police and other law enforcement agencies such as the National Crime Agency, to protect vulnerable and exploited workers and disrupt and dismantle serious and organised crime.
The Modern Slavery Act 2015 made it easier to relate to the courts from a legislative point of view. It introduced requirements for modern slavery with a focus on businesses and what they are doing to address modern slavery and prevent exploitation. The Act’s initial focus was the agricultural sector, but it now covers the supply chain across all industries and sectors to ensure these are free of modern slavery
In a bid to comply with the Act and fend off any investigations, UK companies have introduced training, and due diligence measures – often just a standard questionnaire for workers. However, there remain an estimated 5,000 businesses in the UK that should have reported information about their workforce, but haven’t done so, or been investigated or reprimanded.
Economic landscape
The current economic landscape is contributing to enabling worker exploitation. For instance, Brexit brought with it a change in immigration laws and levels, the Covid pandemic adversely affected the influx of seasonal and part-time workers to the UK, and the need to recruit from new areas of the world has brought fresh challenges on language, communication and cultures. Together these have triggered serious labour shortages in many sectors, especially those in the GLAA.
Additionally
- The UK has a shrinking labour pool, but this pool of workers face a serious risk of exploitation.
- Increasing cases of worker status issues / false documentation, evidenced by a clear increase in the use of false documentation, making them a higher value of workers to criminals and exploiters.
- Reliance on online processes – Covid in particular brought a shift to zero face-to-face contact for employers and agencies alike. This new culture has brought with it an impersonal, transactional-style approach to hiring seasonal and part time workers, with individuals being seen increasingly as merely a commodity.
- IR35 – these new rules surrounding off-payroll workers emerged as part of the 2000 Financial Act, and has played a part in a rise in the use of mini umbrella companies (MUCs).
- Immigration rules – a number of changes require workers to have skilled and seasonal work visas in order to work in the UK.
- There’s been growth in the use of sub-contractors in a bid to fill the diminishing labour pool.
For recruitment agencies, many of these issues dictate the need for a refresh and tightening-up of policies and procedures governing the hire and deployment of seasonal workers.
Factors surrounding the recruitment landscape
The GLAA operates a licensing scheme regulating businesses who provide workers to the fresh produce supply chain, to make sure they meet the employment standards required by law.
Labour providers are assessed by GLAA compliance officers to check they are meeting the authority's licensing standards which cover health and safety, accommodation, pay, transport and training.
Employment agencies, labour providers and gangmasters who supply workers to the following sectors need a GLAA licence:
- Agriculture
- Horticulture
- Shellfish gathering
- Any associated processing and packaging.
It is a criminal offence to supply workers without a licence or use an unlicensed labour provider. The maximum penalty for acting as an unlicensed gangmaster is 10 years in prison and an unlimited fine.
Recruitment agencies must comply with the Modern Slavery Act, but several recent and current issues are making this tough:
1. Post Brexit:
- Brexit has put the part-time/seasonal workers recruitment sector back at least 20 years
- Triggered an increase in cash payments
- Workers choose not to work in the UK
- Clear guidance is lacking
- Gives ample opportunity to hide the problems of modern slavery
- Led to the growing and sustained skills gap and shortages across all sectors
- Workers without the necessary paperwork are being put forward and taken on.
2. Rules, regulations and economy:
National and Borders Act 2022 – considered to have stigmatised modern slavery, and those exploiting workers will and can further exploit the law because workers are increasingly reluctant to come forward and report them.
3. IR35:
Mini Umbrella Companies (MUCs) have become more common since IR35 was introduced, and MUCs are a major issue, particularly so in driving, delivery, logistics related sectors. The warning for any recruitment business using an MUC – knowingly or unknowingly – will be investigated by HMRC. MUCs represent a major red flag, so recruiters must act swiftly to establish if they are using an MUC anywhere in their supply chain.
How does this affect recruitment?
It’s no longer based in how to recruit, but how to retain workers. All of the aforementioned factors have a detrimental effect on workforce loyalty, meaning workers will move jobs and agencies for often a small hourly pay rate increase.
There’s a lack of joined-up working by recruitment businesses and their clients particularly when the client uses a number of recruitment agencies to service their needs. Clients have always been non-committal when dealing with recruitment agencies, which in turn means that recruitment agencies will not over invest in clients who show no longevity in their partnership.
However, with this ever changing recruitment environment, gone are the days where a client can keep swapping to a new agency; ultimately, agencies all have access to the same small group of workers. Instead, clients should be actively encouraged to work in partnership with their agencies, sometimes utilising a top tier/lead recruitment agency to manage their staffing needs (The top tier agency managing the smaller agencies in the supply chain). This type of relationship can help the agencies to achieve consistency in recruitment and induction practices and optimise recruitment for their clients. Clients would have to work together with the agencies by agreeing to a longer term supply arrangement to foster goodwill and enable the agencies to invest in their operations to bring in better processes which would hopefully mean long term retention of workers and encourage workforce loyalty.
Recruiters are advised to think about an evolved or different recruitment model, rather than just sticking with what they have always done; embed a robust worker engagement strategy to maximise retention. This should include relevant and useful incentives for workers to stay, such as subsidised food on-site at their workplace, attention to accommodation and housing for them, and building better relationship that includes support on obtaining workforce visas etc.
Take a strategic, longer-term view and identify peaks and troughs for workforce demand, such as by planning ahead for extra busy times such as Christmas and Valentine's Day.
Crystal ball
What could the future hold for people affected by Modern Slavery?
The expanded geographic labour market brings with it an increased vulnerability for individuals migrating, which has a knock-on effect on a recruitment business.
Sadly exploitation is an ever-evolving beast, and there are new models of exploitation, especially among criminal organisations, every day. The exploiter is always one step ahead of the legislation and its enforcers, and because it’s lucrative, they will do everything and anything to attract and exploit workers for maximum financial gain.
Hopefully, recruiters will continue to take steps to refresh their due diligence to guarantee it is fit for purpose today in order to avoid modern slavery and worker exploitation.
It’s common knowledge that law enforcement of modern slavery breaches is lacking, with resources and people on the ground stretched beyond capacity, and fewer and fewer investigations carried out, especially in GLAA.
As with everything in life, complacency creeps into everyday operations, unfortunately. If you let this happen with regards to compliance in your due diligence on Modern Slavery, the ramifications can be huge for business; you only have to see what has happened to businesses who have been infiltrated or affected by Modern Slavery (not many of them still exist).
Compliance does not have to be overly complex; it just takes a few tweaks of your current processes, but you must carry out due diligence and not become complacent or simply say “it won’t happen to us”. Usually it is those businesses that the organised crime groups will look at exploiting as they know the basic compliance is lacking.
About the author
Claire Johnson is a fully qualified IRCA Ethical Lead Auditor (educated to SA8000 standard) completing over 150 compliance audits throughout the UK and Europe. She has experience of all types of regulatory audits including SMETA and Social/Ethical Audits including housing and transport audits.
Prior to entering the private sector in 2018, Claire spent over 20 years as a criminal investigator for the UK Government with the last 12 years spent with the Gangmasters and Labour Abuse Authority (GLAA).
Her vast experience and knowledge of Modern Slavery and human trafficking investigations associated with GLAA licensing matters has been fundamental to her extensive and highly successful career in UK law enforcement and in particular GLAA investigations.
