Canada's Modern Slavery Act is in force – what does HR need to know?

Vague training requirements leave space for interpretation, says lawyer

Canada's Modern Slavery Act is in force – what does HR need to know?

Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act, or the Modern Slavery Act, came into effect on January 1, 2024. Within the act is a requirement to implement and report training around forced and child labour, but it raises some questions around the specific type and scope of the training.

The first report is due from affected entities on May 1, 2024. The government released guidance on how to prepare the report, with some points included around training reporting.

To help interpret what the Act will require for training and reporting, HRD spoke with Zoya Alam, lawyer with Goulart Workplace Lawyers in Toronto.

The guidance, while giving general points, leaves the details on training programs up to employers to design and implement, she said.

“The obligations of certain private entities that this applies to, they have to report on what remedial action is being taken to prevent any forced labour or child labour. Part of that is training employees and assessing the risks that that private industry has in the supply chain,” said Alam. “The government of Canada said training on forced labour and child labour can take various forms, which can be formal training courses to raise awareness about child labour and forced labour, and the employer or entities can choose to provide certain details about the training.”

Federal guidelines on training for forced labour, child labour

The government of Canada released guidance on reporting under the Act, including the following parameters around training:

  • If the training is mandatory
  • If the training is organization-wide or only covers employees in specific departments
  • Which groups or levels of employees receive the training (senior staff/executive staff/mangement)
  • Content of the training
  • How the training was developed and who developed it
  • How many employees will receive the training

The list of parameters is not exhaustive, and employers are “encouraged to provide additional information”, the guidelines state.

The Act adds to domestic and international policies that Canada is already a signatory to around forced labour, Alam said. The Act makes the laws more enforceable for private entities and formalizing some regulations.

“I would think that some of the organizations are already doing some of this work,” Alam said, “but this is a way to formalize and enforce requirements that are now required by law.”

Training for Modern Slavery Act to be designed by employers

The first report is due on May 31, 2024. While organizations won’t be required to implement training before then, they will be required to include a detailed plan about what training they will be undertaking in the next year, how it will be implemented, and who will be receiving it.

“They left it up to the entities to decide and report on what those training activities are, but they have said it should be around raising awareness around forced labour,” Alam said.

“Some details that the entities can consider are whether the training is mandatory or optional, whether there's people in specific who are receiving the training or whether the training will be organization-wide.”

Also, the content of the training will need to be reported, including if it will cover forced labour or child labour, or both, along with details around the program’s framework, timeline and implementation, she said.

“It's up to the entities to develop training or get resources to develop training, and it can be developed internally or by external organizations.”

Which organizations are affected? Three-part test

The Act applies to entities that are corporations, trusts, partnerships or any other unincorporated organization that meets three specific requirements.

An organization is affected if it is listed on the Canadian stock exchange and does business, or has assets in Canada, and meets at least two of the following thresholds:

  • had at least $20 million in assets in one of the two most recent financial years, based on consolidated statements
  • generated at least $40 million in revenue in one of the two most recent financial years, based on consolidated statements
  • employed an average of at least 250 employees

Alam pointed out that organizations that don’t meet the requirements can still be appointed for reporting by officials. Also, employers should be aware of the enforcement aspect of the Act, which includes fines up to $250,000 for non-compliance.

“It's important to note the inspection regime, where the Act gives the government the power to compel businesses to provide information or documents to make sure they're complying with the act,” Alam said, adding that although such a fine might not be significant for a large organization, if any judgements or claims are made public around non-compliance, a company could suffer reputational damage.

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