A national supermarket chain contracts a cleaning company to maintain its distribution centre in the Midlands. The cleaning company subcontracts to a smaller firm. That firm uses an employment agency to supply workers. On any given night, twelve people clean the distribution centre. The supermarket has never met any of them. It does not know their names, their immigration status, or whether they have been subject to any form of verification.
In 2025, an immigration enforcement visit to the distribution centre found three of those cleaning workers had no right to work in the UK. The employment agency had conducted checks at registration — two years earlier. The subcontractor had never checked. The cleaning company had never checked. The supermarket had contractual warranties from the cleaning company confirming compliance, but had never verified those warranties.
The enforcement action did not stop at the employment agency. It moved up the chain.
This is the hidden liability in supply chain worker verification. If workers are operating on your premises, under your commercial relationships, the question of whether they are your direct employees is increasingly irrelevant to the question of whether you bear responsibility.
The legal framework
Several overlapping pieces of legislation create supply chain verification obligations for UK businesses.
The Modern Slavery Act 2015. Commercial organisations with an annual turnover of £36 million or more must publish an annual modern slavery statement describing the steps they have taken to ensure modern slavery is not taking place in their supply chains. While the Act does not prescribe specific verification requirements, it creates a duty of due diligence. A business that claims to have taken steps to prevent labour exploitation but has no mechanism for verifying who is actually working in its supply chain has a credibility problem — both with regulators and with the public.
The Fair Work Agency. The FWA, operational from April 2026, consolidates enforcement across employment standards, minimum wage, and labour exploitation. Its scope explicitly covers supply chain labour. The FWA has the power to investigate arrangements between contracting parties and to follow the chain of employment from the end client to the worker on the ground. Its walk-in audit powers extend to any premises where workers are operating, regardless of the contractual structure.
The Gangmasters and Labour Abuse Authority (GLAA) licensing regime. In specific sectors — agriculture, horticulture, shellfish gathering, and food processing and packaging — labour providers must hold a GLAA licence. Using an unlicensed gangmaster is a criminal offence. But outside these licensed sectors, there is no licensing requirement for labour supply, creating a regulatory gap that the FWA is intended to narrow.
The Immigration, Asylum and Nationality Act 2006. The civil penalty regime — up to £45,000 per illegal worker for a first offence, £60,000 for repeat offences — applies to the employer. In supply chain arrangements, determining who the "employer" is becomes the critical question. Where a worker is supplied through an employment business, the employment business is typically the employer. But where the arrangement is structured differently — as self-employment, as a service contract, as a subcontract — the end client may find that the workers are legally their employees or that they bear joint liability.
The three-layer problem
The typical supply chain in labour-intensive sectors operates through multiple tiers.
Tier 1: The end client. The supermarket, the construction company, the hotel chain, the facilities management client. This is the business whose premises the work takes place on, whose brand is at risk, and whose commercial relationship with the consumer is at stake.
Tier 2: The service provider. The cleaning company, the construction subcontractor, the catering firm. This is the business that has contracted with the end client to deliver a service. It may employ workers directly or may itself subcontract.
Tier 3: The labour supplier. The employment agency or employment business that actually sources, recruits, and deploys the workers. This is where right to work checks are supposed to happen. This is also where they most often fall through the gaps.
The challenge is that each tier assumes the tier below has handled compliance. The end client assumes the service provider has vetted its workforce. The service provider assumes the labour supplier has conducted right to work checks. The labour supplier conducted checks at the point of registration — which may have been months or years ago.
Nobody verifies at the point of deployment. And nobody has a real-time view of who is actually working on site.
Sector-specific exposures
Supermarket supply chains. The UK grocery supply chain is among the most complex in any sector. Fresh produce moves through growers, packers, processors, and distributors before reaching the shelf. At each stage, labour is often supplied through agencies or subcontractors. The Groceries Supply Code of Practice addresses commercial fairness but does not directly address worker verification. Major supermarkets conduct annual ethical audits of key suppliers, but these audits are snapshots — they reveal compliance at a specific moment, not ongoing reality.
Construction. A major construction project may involve a main contractor, several subcontractors, and multiple labour agencies. The Construction Industry Scheme (CIS) requires contractors to verify the tax status of subcontractors, but this is a tax mechanism, not an identity or immigration mechanism. On a busy construction site, workers from different suppliers mix freely. Identifying which workers are employed by which entity — and whether each has been checked — is a practical impossibility without a shared verification system.
Facilities management and cleaning. Office cleaning, warehouse maintenance, and facilities management contracts are typically won on price. Margins are thin. The incentive to cut corners on worker verification is high. Workers are deployed to client sites, often outside normal business hours, with minimal direct supervision by either the cleaning company or the client. The temp worker loophole is especially wide in this sector.
Hospitality and catering. Event catering, hotel staffing, and restaurant supply chains frequently involve last-minute worker deployment. A catering company serving a conference may pull in agency staff the night before. The client has no visibility of who is preparing and serving the food on their premises.
Due diligence in practice
The question for end clients is not whether they can eliminate all supply chain risk — they cannot — but whether they can demonstrate reasonable due diligence if enforcement action follows the chain to their door.
1. Map your supply chain. Know who supplies labour to your operations, at every tier. This sounds elementary but is frequently not done. A facilities management client may know their Tier 1 cleaning contractor but have no idea who the Tier 2 and Tier 3 suppliers are. If you cannot name the entities supplying workers to your premises, your due diligence has not started.
2. Include verification requirements in contracts. Every contract with a service provider should include explicit requirements for right to work checks on all workers deployed to your premises, together with an obligation to provide evidence of compliance on request. These contractual obligations do not transfer your legal liability — but they establish a framework for accountability and create a paper trail demonstrating due diligence.
3. Verify, do not assume. Contractual warranties are only valuable if they are tested. Request evidence of right to work compliance from your service providers on a regular basis — not annually, but as a condition of ongoing deployment. Spot-check workers on site. Ask to see records. If a provider cannot produce evidence, that is a red flag.
4. Verify at the point of work. The strongest due diligence position is to verify workers at the point they arrive to work on your premises, regardless of which tier of the supply chain they come from. This does not require conducting full right to work checks (which is the employer's obligation, not the site operator's) — but confirming that the person on site has been verified, by someone, against a known record, creates a significant protective layer.
5. Monitor continuously. Supply chain labour is dynamic. Workers change, agencies change, subcontractors change. A compliance snapshot from six months ago may bear little relation to who is working on your premises today. Continuous monitoring — not periodic audits — is the only approach that keeps pace with reality.
The Modern Slavery Act reporting gap
The Modern Slavery Act's annual statement requirement has been criticised for lacking enforcement teeth. Many companies publish generic statements that describe policies rather than actions. The Home Office's modern slavery statement registry allows public scrutiny, but penalties for non-compliance or inadequate statements have been minimal.
However, the direction of travel is towards greater accountability. The FWA's expanded scope means that supply chain labour exploitation — whether it involves modern slavery, illegal working, or minimum wage violations — is now within the remit of a single, consolidated enforcement body with walk-in audit powers. A generic modern slavery statement will not satisfy an inspector who has followed the supply chain to your door and found unverified workers on your premises.
For businesses that operate in sectors with complex supply chains, the audit trail is your defence. Not the contractual warranties. Not the annual statement. The actual, verifiable evidence that you took steps to know who was working in your supply chain and that those people had the right to work.
The cost of not knowing
The reputational risk of a supply chain labour scandal often exceeds the regulatory penalties. News stories about major brands found to have unverified or exploited workers in their supply chains generate lasting brand damage, consumer boycotts, and investor concern. The Modern Slavery Act registrations are public. Parliamentary inquiries are public. Media investigations are public.
For publicly listed companies, supply chain labour practices are increasingly a matter of ESG (Environmental, Social, and Governance) scrutiny. Institutional investors ask about supply chain due diligence. Rating agencies assess labour practices. A compliance failure in the supply chain is no longer just a regulatory matter — it is a governance matter with board-level consequences.
For SMEs, the risk is proportionally even greater. A civil penalty of £45,000 per worker, applied to workers in a subcontractor's workforce operating on your premises, can be existential.
Certifyd's verification platform provides a shared compliance layer across supply chain tiers — verified worker identities, real-time right to work status, and audit-ready records accessible to every party in the chain. When enforcement follows the supply chain to your door, you can show them exactly who was verified, when, and by whom.