Tanveer Qureshi
Tanveer Qureshi was recently instructed by Iskander Fernandez of Kennedys LLP to represent the director of a large hotel chain facing allegations of modern slavery and multiple counts of failing to pay employees the minimum wage, which followed a three year long investigation by the police and the Gangmasters and Labour Abuse Authority (GLAA)
Through comprehensive written submissions by the defence, Tanveer argued that all 18 allegations should be dismissed on both legal and factual grounds. Although initially, the Crown only agreed to discontinue the modern slavery charges, they have recently offered no evidence on the entire case, allowing the director to resume his business operations.
In this article, Tanveer and Iskander discuss the key issues that have emerged from the case.
Modern slavery offences are categorised as labour market offences. The GLAA, are authorised to function as Labour Abuse Prevention Officers, and investigates labour market offences with powers akin to those of the police for questioning suspects concerning alleged offences.
In many instances, the GLAA collaborates with other agencies, such as HM Revenue and Customs (HMRC) and the National Crime Agency (NCA), to investigate offences jointly.
As the investigation that our client demonstrated, the hotel industry is particularly susceptible to modern slavery due to its inherent nature, the complex web of commercial relationships linked to each hotel, and the diverse needs for reasonably priced services, as well as the seasonal nature of labour supply.
Under the Modern Slavery Act 2015 (MSA) a person commits an offence if they hold another individual in slavery or servitude, or compel another person to perform forced or compulsory labour, provided that both of the following criteria are met:
1. The circumstances indicate that the person knows, or ought to know, that the other person is held in slavery or servitude.
2. The person knows, or ought to know, that the other individual is being required to perform forced or compulsory labour.
Penalties on conviction include imprisonment for life and/or an unlimited fine.
There are three primary areas where modern slavery may occur in the hotel industry:
1. Hotels can unknowingly facilitate the exploitation of victims, particularly those subjected to sexual exploitation, who may be trafficked through hotels or held there by traffickers using hotel rooms as bases for exploitation.
2. Workers recruited or subcontracted through unscrupulous agencies, often in lower-skilled roles such as housekeeping, may become victims of forced labour and debt bondage, being compelled to work while incurring extortionate recruitment fees and having their passports or identity documents confiscated.
3. A hotel’s supply chain, involving a complex network of producers, distributors, and vendors, may also pose a risk of exploitation, tainting the products that reach the hotels.
In the event of prosecution, it is essential for employers to demonstrate that they have robust systems in place to prevent modern slavery practices.
The MSA 2015 also consolidates legislation relating to trafficking and slavery. Section 54 of the MSA 2015 mandates large businesses to produce an annual statement detailing the steps they have taken to ensure their operations and supply chains are free from slavery, or to declare that no such steps have been taken.
This statement is a legal obligation, and it is advisable to seek early legal advice to ensure compliance. It should not be treated merely as a tick-box exercise; the more detailed and transparent the statement, the less likely it is that an investigation will arise.
Investigations into suspected modern slavery offences may also examine whether workers are receiving their proper wages. For instance, in 2020, the NCA investigated textile factories in Leicester, extending the inquiry to assess whether workers were being paid appropriately; minimum wage litigation is not the exclusive domain of Employment Tribunals.
Criminal liability under the National Minimum Wage Act 1998 is governed by Section 31 and includes six categories of liability:
1. The employer refuses or wilfully neglects to pay the minimum wage.
2. A person fails to maintain or preserve minimum wage records.
3. A person knowingly causes or permits false entries in minimum wage records.
4. A person furnishes or produces false records and information.
5. A person delays or obstructs a compliance officer.
6. A person refuses to cooperate in providing the required information.
HMRC’s enforcement policy states:
“HMRC will investigate the most serious cases and those National Minimum Wage (NMW) offences that are part of a pattern of criminality, including suspected tax fraud or cross-government offenses such as employing illegal workers. In such cases, HMRC investigators will collaborate with the police or other criminal investigation teams.”
What does this mean?
For reasons outlined above, clients need to ensure that the monitoring of their compliance policy and procedures also includes a thorough check of their supply chain which will involve regular checks on employees wellbeing to ensure that well established signs of slavery, such as paying the wages for a number of employees into one bank account do not go unchecked.
In the event of an investigation or prosecution, it is essential to seek experienced and specialist advice at the earliest opportunity
Tanveer and Iskander are available for further information.