Code of Practice – Ethical Employment in Supply Chains May 2017

A Toolkit Guide Code of Practice – Ethical Employment in Supply Chains May 2017

Code of Practice Example questions, conditions and policies Code of Practice

Contents

Part A – Example Procurement Questions 3 Part B – Example Contract Conditions 6 Part C – Discretionary Exclusion Questions 8 Part D – Whistleblowing Policy Template 10 Part E – Ethical Employment Policy Template 12

In signing up to the Code of Practice on Ethical Employment in Supply Chains you are committing to take a number of actions within your own organisation and with your suppliers. This document contains examples of procurement questions, contract conditions and policy templates you may wish to use, or adapt for use, within your own procedures.

Part A – Example Procurement Questions

This section includes some examples of • Can you confirm you are not aware of any questions you can ask bidders during a ongoing investigations or charges within your procurement process to assess and compare supply chain in relation to modern slavery their performance on ethical employment and/or human rights abuses? matters. They are not exhaustive lists, and • Please provide details of your human rights you should assess which subjects apply to due diligence processes. the market sector or the product or service you are buying and use the list below as a guide. • Do you provide training on modern slavery You should take care to ask only those questions and human rights abuses for your staff that are directly relevant and important, involved in supply chain management? and those that you can realistically expect • Do you identify sourcing countries or regions your bidders to be able to answer. where there is a high risk of human rights abuse? For some of these questions you may wish to assess and score suppliers’ responses, • How many workers do you employ, and on and attach relative weightings to these scores what basis (e.g. direct, agency staff etc)? as part of a tendering process. For others it may • How do you ensure that all of your workers be appropriate to set minimum standards of are aware of their rights? acceptability against the criteria, and so allow • Do all of your workers have employment potential suppliers to de-select themselves if contracts in place? they cannot comply. • Can you confirm that all workers are paid in In procurements subject to the Public Contracts line with relevant national pay rates (these Regulations 2015 thinking about whether are the National Minimum/Living Wage rates you should set standards against the criteria in the UK)? or ask questions about them will also help • Do you have a policy stating the minimum you to decide whether to include questions age for employment in line with national at the selection or award stage. You will also law or international minimum standards, need to ask questions relating to the criteria whichever is higher? for mandatory and discretionary exclusions. • Do you have a zero-tolerance policy on See Part C below for more details and refer to violence, exploitation and abuse of children, the relevant Guides. including sexual exploitation? • Are workers charged for items which Modern Slavery are necessary for them to perform their • What steps have you taken/do you plan to role e.g. uniforms, Personal Protection take to tackle modern slavery and human Equipment etc? rights abuses within your organisation and • Are all workers free to leave to find work supply chains? elsewhere? • Can you confirm you are abiding by all • Can you confirm that no worker has had to applicable employment laws? pay for employment? • Can you confirm you are not subject to any • Can you confirm that workers’ passports are ongoing investigations or charges in relation not retained? to modern slavery and/or human rights abuses? 3 Code of Practice

• Are all workers free to join a Trade Union/ intermediary, as self-employed or on a zero collective agreement? hours contract? • Do you have an effective whistle-blowing/ • Do you have fair and open recruitment grievance mechanism in place? processes for appointing staff on zero hours contracts? Blacklisting • Do you have clear criteria in place for • Have you committed an act which allocating work fairly and consistently contravenes the Blacklist Regulations 2010 between staff? within the last three years? • What period of notice do you give when • Have you taken any steps to put matters right expecting staff on zero hours contracts to (“self-clean” in a public procurement context) undertake work? where the practice of blacklisting has been • How do you ensure you give appropriate identified? consideration to workers’ (on zero hours • What processes do you have in place to contracts) other responsibilities such as ensure that details about your workers are study, childcare and caring responsibilities? protected to ensure they are not included • Do you compensate staff when cancelling on prohibited lists (blacklisting)? Do these work at short notice? processes comply with the Data Protection • Are workers engaged on zero hours contracts Act? provided with paid-for induction and • What percentage of your workforce other relevant training and development is engaged through employment opportunities? intermediaries? Where relevant, what • Are workers on zero hours contracts provided processes are in place for ensuring that with a line manager and arrangements for employment intermediaries comply with discussing achievements, challenges and the Data Protection Act? career aspirations? • What steps do you take to ensure that your • Are workers on zero hours contracts enrolled subcontractors, i.e. employment agencies, into a qualifying pension arrangement? Is this have not been involved in the practice of set out clearly in recruitment information and blacklisting? terms of appointment? • Are all of your workers free to leave to find • What processes do you have in place for work elsewhere on their own terms? handling agency workers who have worked • Are all of your workers free to join a Trade with your organisation for more than Union or collective agreement? 12 weeks (in line with the Agency Workers Regulations 2010)? Tackling Unfair Employment Practices • What processes do you have in place to • What policy and processes do you have ensure that your workers engaged on in place for moving workers on zero hours a self‑employed basis should not in fact contracts on to a regularised-hours contract be treated as employees? when they are working regularised hours? • Can you confirm that self-employed workers Do these processes include regular reviews are paid in line with relevant national pay and opportunities for staff to request rates, and are entitled to paid holiday leave a change of contract? and sick leave? • Do you offer new employees the option to • What percentage of your workforce be directly employed as well as the choice is engaged through employment of being engaged via an employment intermediaries?

4 Example questions, conditions and policies

• What processes do you have in place for • Are all workers free to join a Trade Union/ ensuring that workers engaged through collective agreement? employment intermediaries are not employed on unfair umbrella schemes, Living Wage unfair zero hours contracts or on a false Example Invitation to Tender question on self‑employment basis? Fair Work Practices – used to cover Living • How many workers do you employ and on Wage and other employment practices as what basis (e.g. direct, agency staff etc)? set out above. • Are all workers aware of their rights and do The box below contains an example of a tender they have employment contracts in place? question you might use to assess potential • Can you confirm that all workers are paid suppliers’ commitment to fair work practices, in line with relevant national pay rates and paying the Living Wage. It is based on the (these are the National Minimum/Living sample Invitation to Tender question in the Wage rates in the UK)? Scottish Government’s Statutory Guidance1. • Are workers charged for items which are The question should be adapted to be more necessary for them to perform their role specific about your requirements, and those e.g. uniforms, Personal Protection Equipment work practices that are relevant to the subject etc. matter of the contract.

Fair Work Practices Question Guidance: • flexible working arrangements to allow ****** [Insert organisational name] has adopted support for carers, and for family-friendly the Welsh Government’s Code of Practice on working Ethical Procurement in Supply Chains. This is • supporting workforce engagement, for designed to ensure that high-quality public example Trade Union recognition and services are delivered throughout Wales by representation, or other arrangements a workforce that is treated legally, fairly and for empowering staff. safely, and is well‑rewarded. This Code includes In order to ensure high standards of service a commitment to consider promoting the Living quality in this contract we expect contractors Wage in relevant contracts. Evidence of fair work to take a similar approach in relation to ethical practices may include: working practices. • a fair and equal pay policy that includes a commitment to paying all staff at least Tender Question: the Living Wage Please describe how you will commit to fair • becoming an accredited Living Wage working practices for workers engaged in the Employer delivery of this contract (including any agency or sub-contracted workers). • ensuring that all staff have access to training and development opportunities Answers need not be constrained to the • promoting equal opportunities for all staff examples given in the guidance alongside this regardless of age, gender, disability, religion, question. Good answers will reassure evaluators race and sexual orientation that your company takes a positive approach to ensuring that your workers are subject to • stable employment, avoiding inappropriate fair work practices, receive fair pay and have use of zero-hours contracts, and umbrella opportunities to develop skills. employment firms

1 Statutory Guidance on the Selection of Tenderers and Award of Contracts – Addressing Fair Work Practices, including the Living 5 Wage, in Procurement. Scottish Government, October 2015. Code of Practice

Part B – Example Contract Conditions

Disclaimer: The example conditions of contract [Supplier] shall provide such information set out below have been prepared for illustrative on its subcontractors as the [Client] may purposes only. The Welsh Government does from time to time request. not provide any warranties or make any representations on their appropriateness or (vi) The [Supplier] shall provide such accuracy and does not accept liability for any information as the [Client] may from time reliance on or use made of them. Specific to time request on the [Supplier’s] supply legal advice should always be obtained when chain for the [goods/services] provided. compiling terms and conditions of contract (vii) The [Supplier] shall provide such which should be tailored to an individual’s information as the [Client] may from time to or an organisation’s own circumstances. time request in respect of any [recruitment/ These conditions should not be relied on as employment] agencies used by the a substitute for independent legal advice. [Supplier] in order to provide the services (i) In performing the Contract the [Supplier] including (without limitation) information shall comply with all applicable statutory on the [recruitment/employment practices obligations for the time being in force and procedures] used by those agencies. including (without limitation) those relating (viii) The [Client] shall be entitled to inspect and to health, safety and welfare, environment, examine the [Supplier’s] premises from modern slavery, employment rights and which the [services/goods] are [supplied/ relations, working rights, human rights, stored/provided] on request and to speak data protection and equality. directly to the Supplier’s employees. (ii) The [Supplier] warrants and represents that (ix) The [Supplier] shall ensure that its all the information contained in its tender subcontractors and suppliers have remains true, accurate and not misleading accepted obligations equivalent to those except as may have been specifically set out in clauses [insert reference to the disclosed in writing to and accepted by the clauses dealing with modern slavery and [Client] prior to the commencement date. human rights AND/OR employment and (iii) The [Supplier] shall not operate its business working practices] of these terms and in a manner which may in the opinion of conditions. the [Client] bring the [Client] into disrepute. (x) The [Contract Price] shall be paid [in (iv) The [Supplier] shall supply the [goods/ arrears] to the [Supplier] [in monthly/ services] in accordance with the following quarterly instalments] for [goods/services] [insert description of the relevant Code/ supplied to the satisfaction of the [Client] Standard/Permit/Permission/Policy]. within [30 calendar days] of receipt [and agreement] of a valid invoice containing (v) The [Supplier] shall not subcontract the the following information [INSERT] and performance of all or part of its obligations supported by any other documentation under this Agreement without the prior required by the [Client] to substantiate written consent of the [Client]. The the invoice.

6 Example questions, conditions and policies

(xi) The [Client] may terminate the Contract employment relations, working rights or by notice with immediate effect if the equality. [Supplier] is the subject of a claim for breach of the Human Rights Act. (xiii) An example contract condition specific to the Modern Slavery Act 2015: (xii) The [Client] may terminate the Contract by notice with immediate effect if The [Client] may terminate the Contract by the [Supplier] is the subject of formal notice with immediate effect if the [Supplier] investigation, or the subject of a claim is the subject of formal investigation for or is arising, in connection with its statutory the subject of prosecution for any offence under obligations relating to employment rights, the Modern Slavery Act 2015.

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Part C – Discretionary Exclusion Questions

The questions below are for contracts subject f) the prior involvement of your organisation to the Public Contracts Regulations 2015. in the preparation of the procurement procedure has resulted in a distortion of SQuID reference: SA.GEN.02 competition which cannot be remedied Note to buyers: You cannot apply an automatic g) your organisation has shown significant or exclusion to any of these criteria. You will need persistent deficiencies in the performance to consider each one on a case by case basis, of a substantive requirement under assessing any evidence that suppliers have a prior public contract which led to early self-cleaned. termination of that prior contract, damages or other comparable sanctions SQuID reference: SAGen002a01v02 h) your organisation has been guilty of serious Regulation 57 (8) of the Public Contracts misrepresentation in supplying information Regulations 2015 sets out discretionary grounds during a procurement exercise, or has on which a bidding organisation may be withheld such information or is not able deemed ineligible to tender for, or be awarded, to submit the supporting documentation a public contract. Should it become apparent to the buying organisation that any of the following i) your organisation has attempted to unduly situations has applied to your organisation influence the decision-making process within the past 3 years, or currently applies to of the contracting authority, or to obtain your organisation, you may be excluded from confidential information; or has negligently the procurement. Select “Yes” if you wish to provided misleading information that may discuss any of these matters with the buying have a material influence on decisions organisation. concerning exclusion, selection or award. a) your organisation has violated obligations Answer: Yes/No in the fields of environmental, social and The buyer may exclude you from participation in labour law a procurement procedure if, having investigated b) your organisation is bankrupt or is the the circumstances, any of these grounds for subject of insolvency or winding-up exclusion is found to apply. proceedings If you are bidding as, or on behalf of, c) your organisation is guilty of grave a consortium, you should check with all members professional misconduct, which renders its of the consortium whether or not these grounds integrity questionable for exclusion might apply. d) your organisation has entered into The buyer may include additional questions agreements with other economic operators covering some of these grounds more specifically, aimed at distorting competition for example, on conflicts of interest, on employment practices such as Blacklisting and e) your organisation has a conflict of interest False Self-Employment and on offences under with the buying organisation which cannot Equalities, Environmental and Health and Safety be remedied legislation. See Regulation 56(2) for more details.

8 Example questions, conditions and policies

SQuID reference: SA.GEN.04 If you or your organisation has used or run prohibited lists within the last 3 years, as defined SQuID reference: SAGen004a01v01 in The Employment Relations Act 1999 (Blacklists) Have you, or has your organisation been found Regulations 2010, you must disclose this. to have employed the practice of ‘blacklisting’ The buyer may deem you ineligible to tender in the last three years? unless you can demonstrate adequate evidence Answer: Yes/No of ‘self-cleaning’ (see Regulation 57 (13)- (17)). The measures you have taken will also be SQuID reference: SAGen004b01v01 evaluated taking into account the gravity and If you answered ‘yes’ to question SA.GEN.04a particular circumstances of the misconduct. please include details here, outlining the If you are bidding as, or on behalf of, circumstances, including actions you have since a consortium, you should check with all members taken to put matters right, as described in the of the consortium whether or not these grounds guidance to this question. for exclusion apply. Select “Yes” if these grounds apply to any consortium member. Answer: Explanation outlining actions taken.

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Part D – Whistleblowing Policy Tempalte

We recommend that your Whistleblowing Policy Any processes implemented should not covers all of the aspects of ethical employment preclude access to judicial or other state-based included within the Code of Practice on Ethical processes, or undermine the role of legitimate Employment in Supply Chains: trade unions. • Modern Slavery Content • Blacklisting Your policy might include: • False self-employment • definitions of each of the ethical employment • Unfair use of umbrella schemes and zero issues covered – these can be found in the hours contracts toolkit Guides – and the types of concerns • Paying the Living Wage. that can be raised under the policy • your organisation’s values and how these Considerations impact upon staff and suppliers When developing your policy you may want • the roles and responsibilities of those to consider: involved in the whistleblowing process – • nominating a board member or senior person staff, managers, HR etc to have overall accountability for the policy • the process and mechanism for raising and its implementation suspicions of poor employment practices, • who the policy will apply to, for example including whom to contact, and the this may only include employed staff and information that will be required, and any individuals who have suffered, or witnessed differences between this process for internal incidents, but it could also extend to staff and external stakeholders suppliers (including those further down the • the process for handling and investigating supply chain), business partners, investors reported allegations reported, including other stakeholders who will be notified about the concerns and • aligning the policy with existing legislation in what way, the actions that will be taken and regulatory requirements subsequently, the people who will take action • aligning the policy with your Ethical and the expected timescales Employment policy • your approach to confidentiality and fairness • where the policy will be published and how for all parties involved, including how you will it will be disseminated handle requests for anonymity, how concerns can be reported anonymously, and the • how compliance will be monitored and relevant Data Protection Act requirements how non-compliance will be identified, investigated and remedied • your approach to handling malicious or vexatious allegations • making use of some of the support and guidance available to ensure that the policy • how the process aligns with other external is followed. bodies, e.g. trade unions and police

10 Example questions, conditions and policies

• your grievance procedure for reporting • other processes and procedures that will concerns related to the whistleblowing be affected by the policy e.g. procurement, process supplier management, contract • the steps you will take to support workers management, HR and recruitment processes, who have spoken up, and your approach including staff management and disciplinary to providing remedy and/or compensation procedures how you will raise awareness where necessary of the policy, for example through training, inductions, staff and supplier briefings etc • the reporting and management of associated risks.

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Part E – Ethical Employment Policy Template

We recommend that your Ethical Employment The Verite website also includes sample Policy covers all of the aspects of ethical provisions for use in codes of conduct: employment included within the Code www.verite.org/helpwanted/toolkit/suppliers/ of Practice on Ethical Employment in improving-codes-conduct-company-policies. Supply Chains: The policy should clear, unambiguous and • Modern Slavery written in plain language. Where you work • Blacklisting directly with suppliers based overseas you • False self-employment should consider translating the policy where necessary, to ensure that foreign workers are • Unfair use of umbrella schemes and zero able to understand it. hours contracts • Paying the Living Wage. Content Considerations Your policy might include: When developing your policy you may want • definitions of each of the ethical employment to consider: issues covered – these can be found in the toolkit Guides; • nominating a Board member or senior person to have overall accountability for the policy • your organisation’s values and how these and its implementation impact upon staff and suppliers • appointing an Ethical Employment • your employment standards – these could be Champion who will be responsible for general and/or industry-specific, for example: the policy and its implementation –– for tackling modern slavery and human • who the policy will apply to, for example this rights abuses it is worth considering may only include employed staff, but it could using existing standards such as the also extend to suppliers (including those International Labour Organisation’s (ILO) further down the supply chain), business 8 Core Conventions, the UN Convention on partners, investors and other stakeholders the Rights of the Child, or the Ethical Trade Initiative’s Base Code • aligning the policy with existing legislation (www.ethicaltrade.org/eti-base-code) and regulatory requirements –– for wider employment issues it may be • aligning the policy with your whistleblowing worth using industry specific standards policy e.g. the Freelance and Contractors • where the policy will be published and how Association’s Code of Conduct, it will be disseminated International Recruitment Integrity • how compliance with the policy will be System’s Code of Conduct monitored and how non-compliance will • your organisation’s stance on engaging be identified, investigated and remedied workers – through direct employment, • making use of some of the support and or via recruitment or employment agencies, guidance available to ensure that the policy or by using employment businesses is implemented.

12 Example questions, conditions and policies

• your organisation’s approach to • the consequences of non-compliance sub-contracting work, for example the e.g. remediation versus contract circumstances in which sub-contracting takes termination – and under whatcircumstances place, and whether you need to approve all e.g. child labour, slave labour, unfair sub-contractors employment contracts • your organisation’s stance on using • the steps that are taken in your organisation employment businesses, recruitment to support workers who have spoken up agencies, labour providers, including the • other processes and procedures that will payment of recruitment fees be impacted by the policy e.g. procurement, • your organisation’s stance on costs and supplier checks, supplier management, timescales pressures placed on suppliers; contract management, HR and recruitment, e.g. avoidance of abnormally low prices staff management or non-industry standard timescales, • how you will raise awareness of the policy, ensuring fair payment terms and fair delivery for example through training, inductions, timescales etc staff and supplier briefings etc • your organisation’s stance on Blacklisting • the reporting and management of and freedom of association associated risks. • your organisation’s stance on paying the Living Wage Foundation’s Living Wage Where child labour is identified as a risk area (in the UK) and fair wages (overseas) within your supply chains you should consider developing child labour remediation guidance, • your approach to monitoring global supply including a remediation process, that can be chains, for example whether you use supply followed by managers and suppliers to ensure chains which extend abroad, and whether children’s safety and rights are upheld and you exclude certain countries that pose their best interests are served at all times. a high risk of labour exploitation The application of any child labour remediation • your approach to supply chain management guidance should take account of local and and monitoring – risk assessment, auditing, national laws in the country of operation, reviews, due diligence checks particularly related to the national minimum age of employment and to identify tasks that are considered hazardous and prohibited for those under 18 years of age.