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MANAGEMENT

Future-proof your business against compliance risks As the world becomes more labour standard aware, there is a call for more transparency and responsibility, writes Jonathon To*. Most New Zealanders believe in “A fair day’s pay for a fair day’s work” and think that this is everyone’s reality. Unfortunately, this is not always true. Employment standards, the minimum employment entitlements, exist to ensure all employers receive some basic employment entitlements. There are employers that deliberately breach employment standards for their personal gain. This gives those businesses an unfair competitive advantage with unsustainable non-compliant businesses cutting corners to win and deliver contracts. The cleaning sector is not immune to this. These situations also create a significant reputational risk for businesses procuring cleaning services. The speed and accessibility of social media means that news of issues in a supply chain travels quickly; and consumers and procurers are not afraid to act with their feet. In the past, procurers have been satisfied with a signed commitment to a code of conduct or single line in a contract confirming the vendor would adhere to NZ law, but increasingly procurers will be looking for evidence or demonstrations of how employment standards are being met. There are a number of reasons for this increase in requirement.

1. Modern Slavery legislation Following the UK, Canada and France, Australia has recently introduced legislation in which a key feature is an annual requirement for businesses operating in Australia with a global turnover of more 38 INCLEANNZ May 2019

than $100 million to report publicly on the actions they have taken to address modern slavery risks in their operations and supply. While the legislation only directly impacts larger businesses you can be sure those businesses will be looking for assurance from their supply chain.

2. Investors are increasingly supporting companies that have a social purpose Larry Fink CEO of $US6.3 trillion investment fund BlackRock, publishes an open letter to CEOs of public companies annually. His 2018 and 2019 letters highlight the role of companies in the promotion of practices that drive sustainable, long-term growth and profitability, at the heart of this sits the fair treatment of workers. This increased emphasis on businesses accounting for their effect on society is a global phenomena.

3. NZ looks to leverage broader outcomes through government contracts The NZ government is currently considering prioritising the improvement of conditions for workers and future-proofing New Zealand business’s ability to trade, as one of a number of broader outcomes sought from government contracts. This priority would aim to protect workers from unfair and unsafe behaviour, and incentivise wellperforming firms – ensuring they are not undercut by those who have reduced costs by adopting poor labour practices.

Profile for The Intermedia Group

INCLEAN - New Zealand May 2019  

Published for more than 30 years, INCLEAN has evolved into a communications portfolio that delivers need-to-know information to contracted a...

INCLEAN - New Zealand May 2019  

Published for more than 30 years, INCLEAN has evolved into a communications portfolio that delivers need-to-know information to contracted a...