Code of Practice on Ethical Employment in Supply Chains

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Illegal and unethical employment practices should not be tolerated where public money is being spent. The Code of Practice on Ethical Employment in Supply Chains calls on all organisations receiving public money directly or via contracts to ensure legal and ethical employment for workers in supply chains. The Code’s commitments are designed to combat modern slavery and exploitative practices and to promote responsible employment to improve workers’ lives in Wales and across the world.

Innovation Summary

Innovation Overview

The Code of Practice on Ethical Employment in Supply Chains has been developed in response to:
• The supply chain provision in the UK’s Modern Slavery Act (2015), which placed a duty on all commercial organisations with turnover above £36 million to publish an annual statement on actions taken to combat modern slavery.
• On-going concerns around unfair employment practices, especially (but not only) in the construction sector. These include false self-employment, blacklisting of unionised workers, unfair use of umbrella employment schemes and zero hours contracts.
• The Welsh Government’s commitment to promoting a Living Wage calculated from costs of living rather than average earnings.
The Code was developed because evidence had shown that formal policies on some of these matters were not being implemented consistently. There is often a mismatch between an organisation’s stated policies to promote equality, fairness, sustainability and economic development, and its commercial practices focused more around reducing running costs, and securing good deals, for example through outsourcing services.
Procurement staff across all sectors have tended to focus more on the quality and cost of goods and services, and less on the way workers are treated throughout supply chains. The aim of the Code is to address this by promoting widespread assent to a set of principles and commitments and flowing this commitment through supply chains. These commitments emphasise that people matter, and that sustainable and prosperous communities can only exist where workers are employed fairly with adequate job security, opportunities and fair pay. These main beneficiaries of the Code of Practice are low-paid and exploited workers on insecure contracts within public sector supply chains. In the longer term, the benefits will be felt more widely through more sustainable and cohesive communities.
In this way, the Code of Practice complies with the Welsh Government’s flagship Well-being of Future Generations Act 2015 which obliges public bodies to consider the long term, work in partnership to prevent problems and take a more joined up approach. In the UK, the media regularly reports instances of modern slavery being exposed, and examples of exploitative practices taking place in the “gig economy”. These are often found within the supply chains of well-known brands. The Code was developed to ensure that the public sector in Wales takes a lead in rooting out these practices through more rigorous monitoring of employment standards in commercial contracts.
In common with Article 54 of the Modern Slavery Act 2015, it is not prescriptive about precisely how the commitments are put into practice. Instead it is designed to foster a culture of due diligence and continual improvement. Signing up requires organisations to assess the extent to which they already comply, and to develop an action plan to address areas where more work is required. In signing the Code, organisations agree to put the commitments into place within their own operations, but also to promote the Code’s commitments with their suppliers. In order to track progress, organisations are encouraged to upload key documents, and to complete a short checklist of progress against each commitment on the Transparency in the Supply Chain (TISC) Report website www.tiscreport.org.
The Code is supported by a toolkit with advice and links to other sources of help:
• Guide to Modern Slavery and Human Rights Abuses;
• Guide to Tackling Blacklisting;
• Guide to Tackling Unfair Employment Practices;
• Guide to Implementing the Living Wage through Procurement;
• Example tender questions, contract conditions and policy templates.
The final document with example questions and conditions is particularly useful for procurement and contract management staff, allowing them to use and adapt some of the questions and conditions quickly into forthcoming procurements and contracts. We have also recently launched a freely-accessible eLearning course.
The intention is that as each organisation signs up they will in turn invite their own suppliers to sign up, and in so doing the numbers will start to rise more quickly. As we track and publicise sign-up this will encourage more organisations to follow suit. We are now beginning to see signs that these wider levels of knowledge and engagement are developing across different sectors.

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