Over 40 million people around the world are trapped in conditions of modern slavery, according to research from the Walk Free Foundation and the International Labour Organization. The fight against modern slavery is fragmented. Governments, non-governmental organisations (NGOs) and law enforcement agencies are engaged in their own fights at various levels (local, regional, national, global) with little collaboration.

In increasingly globalised markets, there is growing regulatory and consumer pressure on businesses to eliminate the exploitative practices of modern slavery in their operations and global supply chains.

Businesses have the chance to lead the way in the growing global effort to eliminate the exploitative practices of modern slavery; they are uniquely positioned to educate the largest constituency—their employees and business partners. By taking action, businesses can meet increasing investor, shareholder and social expectations; manage legal, reputational, financial and operational risks; and demonstrate corporate leadership on an urgent human rights issue.

However, they cannot do it alone and, to be effective, businesses will need to go beyond mere compliance efforts centred on due diligence/disclosure and focus on transparency and collaboration with government and NGOs. Technological advancements are providing real and substantial opportunities for improvement.

Using technology for greater transparency

Governments and NGOs are starting to take advantage of technology to spread knowledge and tools for those in the private sector and communities to educate themselves and learn how they can take action.

For example, the U.S. Department of Labor has created two apps—Sweat & Toil and Comply Chain—that each have a different focus. Sweat & Toil is a resource companies can use in their risk assessments to identify whether goods used are produced with child or forced labour. It consolidates information on other countries’ legal and enforcement standards, among other things. Comply Chain creates a standard of set practices to reduce the likelihood of goods being produced with child or forced labour. It provides a blueprint for businesses to create or enhance a social compliance system.

NGOs like Stop the Traffik, a global organisation focused on prevention of modern slavery, has created a Center for Intelligence Led Prevention, in partnership with IBM, to collect, analyse and disseminate information about modern slavery routes and risks. With the dissemination of such information, the efforts in this fight can become less fragmented.

Likewise, for businesses to really make a difference as they embark—voluntarily or involuntarily—on responding to a new regulatory scheme, technological advancements will give them an opportunity to support their actions in working towards transparency and ethical supply chains. For example:

Worker voices – Utilising mobile platforms allowing two-way, real-time communication for workers throughout the supply chain.

Traceability of materials and supplies – Using blockchain to trace products along their journey from producer to consumer.

Supplier and worker engagement – Equip and use data analytics to monitor labour-related risks in real-time, creating more responsible global supply chains.

Risk assessments – Mining data (for example, from mobile phones, media reports and surveillance cameras) which can be analysed using artificial intelligence and machine learning to extract meaningful information and identify risks in the supply chain.

Employee engagement – Using internal communications tools to allow employees to engage and become educated, particularly in recruiting.

Technology can only be as good as the purpose for which it is used and how carefully the information acquired from it is leveraged. If effective tools are used to educate and learn from the different actors within the supply chain, there is opportunity for businesses to work with governments and NGOs to build and share knowledge.

The compliance framework

In addition, there is a growing body of international laws and norms requiring corporate reporting and due diligence on modern slavery and human rights issues.

These include the UK Modern Slavery Act, the French Corporate Duty of Vigilance Law, the Swiss Responsible Business Initiative, the U.S. Federal Acquisition Regulations, and the California Transparency in Supply Chains Act. Legislatures in Canada and Hong Kong are also currently considering modern slavery laws, alongside Australia’s proposed Modern Slavery Act and NSW’s Modern Slavery legislation.

The compliance steps for meeting legislative requirements will not be unfamiliar to businesses; the these steps will be much like actions taken for compliance with anti-bribery laws.

Between the growing global compliance framework, technology and the willingness of business to honestly review their operations, comes the potential for a new level of transparency and commitment, helping to build on efforts to fight modern slavery and more holistically bring this largely hidden crime to light.

Traditionally, alternative labour models – including outsourcing and contracting – have been used by business to defray cost and risk and deal with workflow fluctuations. Today’s environment is creating new challenges for organising and engaging alternative labour. Here’s 5 key reasons why:

  1. Increased accountability for those at the ‘top’

Changes to the Fair Work Act 2009 in 2017 introduced new vulnerable workers laws under which certain corporate group holding companies and franchisor businesses can be held directly liable for breaches by other companies within their broader commercial operations.

  1. New labour hire regulations

New laws in Queensland, South Australia and Victoria require labour hire companies to be licensed. The broad definitions used could also pick up other labour models (eg, some types of contractors or secondment arrangements). ‘Host’ companies and other people involved in the labour arrangements can also be liable, meaning a degree of due diligence may now be required for all parties involved in sourcing labour.

  1. Supply chain reporting

Modern slavery legislation imposes mandatory reporting requirements on the activities of others in their supply chains, with the requirement to produce a ‘Modern Slavery Statement’. Many companies are already subject to reporting in the US or UK. New legislation imposes requirements on companies in NSW, with Commonwealth legislation currently being drafted. Companies above the reporting threshold will need to assess the labour arrangements of their suppliers, and potentially their suppliers’ suppliers as well.

  1. Regulatory responses to the gig economy

Gig” work is coming under increasing legal challenge both in Australia and globally. Some political parties, and the ACTU, are also pushing for legal changes to regulate gig work. Watch this space – changes directed at gig work could also affect freelancers or other task-based labour.

  1. Union campaigns

Outsourcing is far from new. The use of third party labour with their “built for purpose” workplace arrangements is common. But in some sectors, union campaigning to compel a different outcome, attacking “Trojan horse” and “sham” arrangements (drawing on activist methodologies), is as powerful as ever.

The above trends result in increased risk and liability for those businesses that use labour models other than direct employment. But these risks can be navigated with due diligence with alternative labour remaining a viable strategy.


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Allegations of sexual harassment have dominated headlines, most visibly with the #MeToo campaign.

Sexual harassment complaints, and the laws that attempt to curb the behaviours, are not new. Despite regulation, sexual harassment is still occurring in workplaces. Why?

One answer may be that organisations guard against sexual harassment through policy and lecture style training without reference to the broader workplace context.

To counter this, an alternate approach may be to use existing risk management frameworks, that have traditionally been used in the workplace health and safety context.

Step 1: Identify hazards

This step requires a deep and honest assessment of the:

  • Structure of the organisation and the industry context.
    For example: Highlighting potential hazards, such as reliance on informal recruitment practices and extreme competition for jobs that could combine to create a higher risk environment.
  • Type of work.
    For example: Physically demanding work and roles that seek attributes where appearance determines recruitment could increase risks.
  • Way work is performed.
    For example: If work is performed in environments that isolate workers, and where workers are required to be alone with a superior, colleague or customer this could lead to increased risks.
Step 2: Assess the risks

Understand the nature of harm that could be caused by the hazard, how serious the harm could be and the likelihood of it happening.

To assess this, ask:

  • How often are people exposed to the hazard? Does this make the harm more or less likely?
  • Has sexual harassment ever happened before arising from the identified hazard, either in your workplace or somewhere else? How often?
Step 3: Identify control measures and assess whether they are reasonably practicable

The most important step in managing risks involves eliminating them so far as is reasonably practicable, or if that is not possible, minimising the risks so far as is reasonably practicable. This requires higher order controls.

Can a hazard or risk be eliminated?

If lower order controls are used are these the right type of the controls? Our experience is that lecture style, text book training to address sexual harassment rarely works by itself. Interactive, engaging sessions which avoid regurgitating the legal definition of sexual harassment are likely to better engage a workforce.

Step 4: Implement the control measures

Implementation of the control measures may require changes to the way work is performed. This may require new procedures, additional training and supervision.

Step 5: Review and revise

Viewed through a risk management lens, polices and training which have typically been the tools of choice for addressing sexual harassment are low on the hierarchy of the controls. If organisations approach sexual harassment with a risk management approach, and identify appropriate higher order controls might we decrease instances of sexual harassment?

For example:

It is identified that in a highly competitive niche creative business which uses short term workers, recruitment is frequently informal and takes place at industry events.

All else being equal, the likelihood of (an allegation of) sexual harassment is higher in these circumstances than if recruitment were to occur in an office where a formal interview was conducted with a representative mix of interviewers.

The organisation seeks to minimise the risks, by putting in place processes that ensure even when contacts are met at industry events, a formal interview occurs within working hours in the office environment.

These control measures are reviewed and reviseded. Ensure the control measures remain effective. Are complaints of sexual harassment decreasing? What does formal and informal consultation with workers tell us about the effectiveness of controls?

We are working with our clients to trial this approach – combining our specialist expertise across workplace health and safety, and employment law.


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The introduction of the Commonwealth Modern Slavery Bill 2018 on 28 June 2018 sets an imperative for businesses operating in Australia to know, and show, how they are identifying and addressing the risks of modern slavery.

Reporting Requirement

At the centre of the Bill is the Modern Slavery Reporting Requirement: a mandatory requirement that entities based, or operating, in Australia, which have an annual consolidated revenue of more than AUD $100 million, report annually on the risks of modern slavery in their local and global operations and supply chains, and take actions to address those risks.

Any ‘reporting entity’ meeting the threshold—and any other entity that volunteers to comply with the legislation—will need to publish an annual statement, within six months of the end of their financial year, describing the risks and actions it has taken in relation to modern slavery: a term broadly defined to include all forms of trafficking in persons, slavery and slavery-like practices, and the worst forms of child labour.

Modern slavery statements, which must be approved by an entity’s principal governing body and submitted to a public, government-run register, will need to:

(a)       identify the reporting entity;

(b)       describe the structure, operations and supply chains of the reporting entity;

(c)        describe the risks of modern slavery practices in the operations and supply chains of the reporting entity, and any entities that the reporting entity owns or controls;

(d)       describe the actions taken by the reporting entity and any entity that the reporting entity owns or controls, to assess and address those risks, including due diligence and remediation processes;

(e)       describe how the reporting entity assesses the effectiveness of such actions;

(f)        describe the process of consultation with any entities that the reporting entity owns or controls, or entities with which it gives a joint modern slavery statement; and

(g)       include any other information that the reporting entity, or the entity giving the statement, considers relevant. 

Action Plan

Businesses should develop an action plan—guided by the legislative criteria, and in line with the UN Guiding Principles on Business and Human Rights—that establishes a comprehensive modern slavery and human rights due diligence process:

  • Policy commitment: Formulate a high-level, public statement that outlines the business’s commitment to meeting its responsibility to respect human rights, including a rejection of any form of modern slavery in its operations and supply chains. This should be approved by the entity’s principal governing body, informed by expertise, and clearly communicate the organisation’s expectations as to how all personnel, business partners and other stakeholders should act.
  • Risk assessment: Map out the business’s operations and supply chains in order to identify key areas of modern slavery risks by location, industry and supplier. In doing so, businesses should assess actual and potential modern slavery risks associated with their operations, supply chains and business relationships. This process may involve conducting human rights impact assessments, internal investigations, and ongoing engagement with affected stakeholders.
  • Take action: Integrate findings from risk assessments into corporate governance strategy and core business decision-making.. Effective action requires that businesses embed their policy commitment across all relevant internal functions, create oversight processes, and take direct, informed action to prevent, mitigate and remediate any identified modern slavery risks and impacts.
  • Provide training: Develop training programmes for management, staff, suppliers and other stakeholders in how to practically identify, assess and address modern slavery risks across the business’s operations, supply chains and relationships. Training should be informed by research and consultations, and can be further embedded through codes of conduct and contractual provisions.
  • Track progress: Verify whether adverse modern slavery impacts are being addressed by using appropriate qualitative and quantitative indicators—including reviews, surveys, audits, and other data—and by drawing on internal and external feedback, particularly from affected stakeholders.
  • Report: Communicate publicly how the business is addressing modern slavery risks and impacts, including via the criteria set out in the Modern Slavery Reporting Requirement.

There is a growing, global effort to eliminate the exploitative practices of modern slavery—one that is now likely to materialise into a formal legal requirement for businesses operating in Australia. By taking action, businesses can meet increasing investor, shareholder and social expectations; manage legal, reputational, financial and operational risks; and demonstrate corporate leadership on an urgent moral issue.

Establishing the Modern Slavery bill

This bill has been released following a consultative process, that included a report from the Joint Standing Committee on Foreign Affairs, Defence and Trade from its inquiry into establishing a Modern Slavery Act in Australia.

The broader international context

Australian’s approach fits into a growing body of international laws and norms requiring corporate reporting and due diligence on modern slavery and human rights issues – these include the UK Modern Slavery Act, the French Corporate Duty of Vigilance Law, the Swiss Responsible Business Initiative, and the California Transparency in Supply Chains Act. Legislatures in Canada and Hong Kong are also currently considering modern slavery laws. In addition, New South Wales has passed its own modern slavery legislation.


We are already working with our clients to ensure they comply with their modern slavery reporting obligations – contact us if you would like to know more.

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The NSW Parliament yesterday passed the Modern Slavery Bill 2018. It is now awaiting assent and a commencement date, however businesses should not wait and begin planning for the new obligations.

Supporting regulations will follow that deal with the finer details even without these, businesses should now urgently consider whether they will be caught by this legislation and consider how they are going to meet their compliance obligations. There will be significant maximum penalties applying to breaches of obligations.

Will this legislation apply to your business?

The legislation will apply to any commercial organisation who:

  • has employees in NSW; and
  • supplies goods and services for profit or gain; and
  • has a total turnover in a financial year of the organisation of not less than $50 million or such other amount as may be prescribed by the regulations.
What are your key obligations?
  1. Preparation of a complying modern slavery statement for each financial year.
    The statement is to contain such information as may be required by regulations as to steps taken by the organisation during the financial year to ensure that its goods and services are not a product of supply chains in which modern slavery is taking place. Without limiting those requirements, the regulations may require a modern slavery statement to include information about the following:
    – the organisation’s structure, its business and its supply chains
    – its due diligence processes in relation to modern slavery in its business and supply chains
    – the parts of its business and supply chains where there is a risk of modern slavery taking place, and the steps it has taken to assess and manage that risk
    – the training about modern slavery available to its employees. Regulations will prescribe the timeframe for preparing the statement after the end of the relevant financial year.
  2. The organisation must make its modern slavery statement public in accordance with the regulations.
  3. The statement must not provide information that the organisation knows, or ought reasonably to know, is false or misleading in a material particular.

Each of these obligations is subject to a maximum penalty of 10,000 penalty units ($1.1 million) for failure to comply.

How does this interact with the foreshadowed Federal Modern Slavery legislation?

We have not yet seen any draft legislation federally, although it has been foreshadowed.

The NSW legislation provides that the reporting obligations do not apply if the organisation is subject to obligations under a law of the Commonwealth or another State or a Territory that is prescribed by the NSW government as a corresponding law. Presumably this is intended to deal with the overlap of any Commonwealth legislation in this space. However, based on recent statements by the Federal Minister, that legislation seems unlikely to have penalties attached to the reporting obligations and will only apply to organisations with a turnover of more than $100 million, so it is possible it won’t be prescribed and our clients will need to comply with obligations under both regimes (which are largely but not entirely overlapping).


We are already working with our clients to ensure they comply with their modern slavery reporting obligations – contact us if you would like to know more.

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Employment class action lawsuits are a common cause of action in North America, and while we have traditionally seen fewer in Australia, there has been a recent uptick in occurrences. What does this mean for Australian employers? Without large numbers of cases and their precedents to study, how you plan for and prevent class actions may be an ‘unknown’ for many employers. Given the unique bet-the-company issues for employers arising from class actions – we have outlined some risks and strategies.

The Australian context

Whilst uncommon in Australia, there are high-profile examples of employment class action lawsuits.

Indeed, proceedings brought during the 1998 Waterfront Dispute were brought on behalf of approximately 1,400 employees under the Federal Court of Australia’s class action regime. Another example dating back to the days of Australian Workplace Agreements involved proceedings brought on behalf of over 700 academic and general employees of a university.

More recently, two employment class actions have been commenced targeting companies who provide marketing services for large and well-known brands, alleging contravention of minimum labour standards.

Why is the class action landscape changing now?

There are many reasons for the uptick in claims, and those relevant to employment include:

  • diminishing union membership across the private sector, but an increase in individual rights and prominence of plaintiff law firms organising class actions
  • an increased public awareness of minimum labour standards and broadly applicable laws, such as the general protections provisions, brought into focus as a result of a number of well documented scandals
  • an increase in the activity of litigation funders willing to venture outside their traditional stomping ground of commercial litigation.

We also predict that there will be many more such actions in the future, particularly given the ramped up penalties for franchisors and holdings companies found to have been complicit in the underpayment of employees or failure to keep proper employment records by their franchisees and subsidiaries.

Learnings from the US

At Seyfarth, our team of workplace law experts analyse and breakdown the mosaic of US class actions each year compiling a report that highlights the trends. In 2017 they recognised:

  1. Settlements skyrocket
    The monetary value of settlements rose dramatically, with the top 10 settlements in employment-related categories totalling a record high of US $2.72 billion — nearly US $1 billion more than 2016. In Australia, settlements are already causing an increase in insurance premiums for directors.
  2. A favourable landscape
    Evolving case law precedents and new defence approaches resulted in better statistical outcomes for employers in opposing class certification requests for the second straight year. In one of the most active categories, wage & hour litigation, employers won 63% of decertification rulings, a success rate up almost 20% from 2016.
  3. More enforcement
    With the federal government in transition, 2017 results were heavily influenced by Obama administration holdover policies and personnel as government enforcement litigation increased. This balloon is expected to burst in 2018 as the Trump administration settles in further, pulling back these policies and positions; yet, at the same time, it is expected that the private plaintiffs’ class action bar will step up their lawsuit filings and “fill the void”.
  4. Pivotal rulings
    Several key decisions in 2017 of the Supreme Court were arguably more pro-business and pro-employer than in the past. In May 2018 the Supreme Court profoundly changed the class action playing field with its highly anticipated ruling on the Epic Systems, Murphy Oil, and Ernst & Young trilogy of cases which found workplace arbitration agreements with class action waivers were lawful and enforceable.

To access the full report, and additional commentary visit www.workplaceclassactionreport.com.


For a discussion on the ‘best of breed’ strategies in class action and litigation globally – contact one of our partners.

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More than ever Boards and senior executive teams are held accountable for workplace liability. This combined with the impact of social media, and its capacity to spread tales of woe, makes ‘the workplace’ a key feature of boardroom attention today.

Download the overview of our top 7 for directors and the workplace:

  1. Workplace health and safety: protecting people at work
  2. Culture: the the organisational imperative
  3. Pay: incentivising right
  4. Brand damaging claims: architecture to prevent and manage
  5. Workplace optimisation: balancing strategy with risk
  6. Governance: oversight of executive conduct and supply chains
  7. Diversity: an organisation enhancing asset.

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The ways we work, the structure of our businesses and the economy continue to be transformed by emerging technologies and cultural shifts. Seyfarth Shaw’s annual survey of business leaders seeks to understand how they are coping with, and adapting to, the rapidly changing landscape.

From talent readiness to cybersecurity, the 2018 Future Enterprise Survey Results give a flavour for the top-of-mind issues facing our clients. Take a look at the Survey Results here and consider whether they resonate with you and the way your business is responding to current opportunities and challenges.

Our experience is that clients who accept the changing world and take calculated risks through opportunity driven leadership are gaining a competitive advantage – we recently discussed this in our blog Why “Future Proofing” Is A Myth.


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At a recent industry conference, a keynote speaker talked about great outcomes a number of our clients achieved in a critical enterprise bargaining round.

One observation was the importance of “patience“ – with which we would wholeheartedly agree.

So it got us thinking about ingredients for success.

Here are some key ones, borrowed from our bespoke workshop process dedicated to this end.

  1. Clarity of need: articulated and connected to the business needs
  2. Gain v Pain: clarity of what’s needed and the pain points along the way
  3. Leadership: the bedrock of any project
  4. Strategy: integrated – articulated – understood
  5. Planning: which falls out of the strategy and in respect of which one can never do enough
  6. Alignment: cemented by sound governance
  7. Resilience: which comes back to leadership

Each can be strengthened for any employer embarking on a bargaining campaign by the taking of tangible steps. You might not be perfect on each but it’s possible to ‘move the dial’.


Would you like to hear more about our workshop process for enterprise bargaining? Contact Chris Gardner.

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For years, the emergence of truly global supply chains and the rise of large, increasingly skilled workforces has wrought havoc on labour supply in Western developed countries. It seems that these days nearly every industry, profession or occupation is facing an existential threat due to automation, artificial intelligence or other advances in technology (indeed, lawyers are said to be the next to go!). This is seen as the next frontier.

In this environment, there is a soothsaying comfort in taking measures that might “future proof” your organisation from the potentially terrifying effects of change and disruption.

But is that really possible? More to the point, is this thinking even helpful?

We work with many of the most successful global organisations. We are always curious to learn why some organisations are successful in the long term, on a massive scale, whilst others fall by the wayside or are diminished over time.

One feature stands out. The most successful organisations do not pretend that there is one initiative – that can be implemented now – to forever insulate them from the effects of change. Rather, their leadership (and these organisations have great leaders at all levels) cultivate a mindset of constant, very often brave, change.

They disrupt themselves before any competitor will have the chance. They make bets on the future and are open to doing things differently, seeing failure as an inevitable part of the learning process. These organisations know that in a truly dynamic and global business environment, there is huge risk in just repeating what has worked in the past. These organisations do not fall into the trap of trying to “future proof” their organisation. They intuitively understand there is no such thing, and that bold leadership, and a learning and calculated risk-taking orientation are a better bulwark against disruption than any future proofing initiative will ever be. These organisations know that an opportunity-driven approach is the only way, and that a risk-driven business model “don’t change anything, don’t break anything” is the riskiest business model of all.

In the last six months we at Seyfarth have seen so many great examples of these types of organisations. Here are a few:

  • An Australian big 4 retail bank with extensive overseas operations, introducing new ways of working that are breaking down silos and making collaboration within the bank much easier
  • A global e-commerce and data services client establishing its operations in Australia, in what is sure to be its latest successful international expansion
  • A global manufacturer and seller of solar panels, investing in Australia given the enthusiasm of various State and Territory Governments to promote renewable energy, whilst somewhat dismayed and discouraged by President Donald Trump’s introduction of tariffs on their products imported into the United States
  • An Australian based manufacturer of a unique biodegradable resin moving its manufacturing from China to Europe in order to take advantage of the friendly production environment in some European countries combined with the progressive and environmentally conscious nature of European consumers of its products.

These organisations are strong examples of opportunity driven leadership – willing to make bold decisions to position themselves well, always thinking in global terms, and always willing to incorporate new and better ways of working. That may mean incorporating or even inventing new technologies, or simply making constant incremental operational improvements. They don’t try to future proof, because they accept that tomorrow will bring more change – some of it unforeseen and perhaps unwelcome.

The cycle of change and transformation is constant. The tension between stability and change, between order and chaos, is ever present: but it is accepted and managed, not denied. These organisations accept the uncertainty that must be managed in today’s world. In fact, they embrace it, knowing that this attitude is itself a competitive advantage.

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