Slaves in the supply chain

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Allan Briddock of Blake Morgan says that the case Galdikas and others v DJ Houghton Catching Services Ltd shows that courts are getting on top of issues around modern slavery in the UK.

The Queen’s Bench Division in a case brought by the claimants who had allegedly been trafficked from Lithuania and subjected to severe labour exploitation against the first three defendants, held among other things that the claimants were entitled to judgment in respect of the defendants’ failure to pay them for their work in accordance with the terms of the relevant Agricultural Wages Orders made under the Agricultural Wages Act 1948 (AWA 1948) in respect of work in the supply of labour to chicken farms in the UK.

What issues did this case raise? Why is it significant?

Galdikas is an important case in the eradication of modern slavery and human trafficking. It is significant as it is one of the first cases where a company has been held accountable in a trafficking case and will be carefully watched by other commercial organisations, particularly in sectors which are more susceptible to trafficking and modern slavery such as construction and agricultural.

The case relates to a company which provided labour to egg farms and which engaged in practices which can be classified as modern slavery. The claimants were six Lithuanian nationals who were trafficked to the UK. The issues surrounded their pay and conditions of employment, including living arrangements. The judge, Mr Justice Supperstone, summed up the case in para [1]:

The claims encompass claims in, inter alia, breach of contract, breach of the Agricultural Wages Act 1948 (“the Act”), negligence, harassment and assault. The Claimants allege they have suffered loss and damage, including personal injury, distress and unpaid wages, as a result of the Defendants' wrongful acts.

Agricultural Wages Orders (AWO) are made under AWA 1948, as the court explained at para [11]:

The relevant AWO each year prescribes (as in the case of the 2010 Order), inter alia: (1) minimum hourly rates of pay applicable to various grades of worker; (2) where the worker is paid by piece work that his pay for each hour shall not be less than the appropriate minimum hourly rate; (3) an overtime rate applicable after 8 hours of work on any day, or on a public holiday, or after 39 hours in any week; (4) an additional supplement is to be paid for work at night; (5) that time spent travelling is to be paid at the minimum hourly rates.

The judge found that the claimants were entitled to summary judgment relating to various breaches of the AWO.

The judge further found the defendants had no reasonable chance of defending a claim of unlawful deduction of wages under the Gangmasters (Licensing Conditions) Rules 2009, SI 2009/307. He found the defendants did not have any real prospect of defending the allegations of lack of facilities to wash, rest, eat and drink.

However, he was unable to determine within the application whether the accommodation provided to the workers was fit for human consumption.

How helpful is this judgment in clarifying the law in this area?

The case is quite technical and is very fact dependent. It is not a precedent nor does it clarify the law. However, it is important as a company has been held to account and liable to pay compensation to the victims of trafficking and modern slavery.

What does all this mean for lawyers and their clients?

Modern slavery is a significant problem in the UK and this case is an illustration of that.

The defendants supplied labour to a number of farms which in turn provides products to a number of major UK retailers. Bearing in mind section 54 of the Modern Slavery Act 2015, which requires businesses with a turnover of at least £36m per annum to prepare an annual ‘transparency in supply chains statement’, lawyers of all disciplines need to become increasingly aware of these issues. Commercial lawyers need to start advising their clients on the implications of having modern slavery or trafficking in their supply chains.

How does this fit in with other developments in this area?

The case fits into the growing international and domestic trend to combat human trafficking and modern slavery. It represents the courts growing understanding of these issues.

Interestingly, this case involves a commercial organisation being held accountable. I expect such cases to be more frequent and as a result I would expect to see organisations become more aware of the businesses they trade with to ensure supply chains do not contain modern slavery or trafficking. The ‘teeth’ to the requirement to prepare the transparency in supply chains statements will be cases like these and the real possibility of significant financial or reputational loss.

Interviewed by Anne Bruce. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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