What does ‘Ethical’ mean?

Ethical trade, or sourcing, can mean different things to different people, writes Sarah Calcutt of Norman Collett Ltd. This can be used as an umbrella term to encompass all types of business practices that promote more socially and/or environmentally responsible trade.  These include the right to earn a living wage, to be able to join or create a trade union and to be free from harassment or discrimination.

The Ethical Trading Initiative base code is as follows:

·        Employment is freely chosen

·        Freedom of association and the right to collective bargaining are respected

·        Working conditions are safe and hygienic

·        Child labour shall not be used

·        Living wages are paid

·        Working hours are not excessive

·        No discrimination is practiced

·        Regular employment is provided

·        No harsh or inhumane treatment is allowed

So why do we have this imposed upon us in the UK?  Undoubtedly we pay better and have better conditions than many places around the world, but there have been notable problems widely featured in the press in the last few years.  There is an almost impenetrable maze of regulation, recommendation and law surrounding employment and not everybody is going to get it right, all of the time.   

So what is out there and how much do they help? Sedex is an online tool which takes you through a series of questions related to the health, wealth, safety and financial security of your employment practices towards your staff.  In a time when no-one welcomes more assurance schemes, this one is at least supported by the majority of the multiples, is relatively quick (less than an hour for many) relatively cheap (£30 including VAT) and links you to your customers and marketing companies providing them with the information they need to assure them that there isn’t bad press ahead to damage sales.

Worldwide there are 25,000 production sites registered through 100 countries.  A risk assessment tool enables your marketing desk to demonstrate that there is no risk/low risk of issues from their growers, leaving the focus on more high risk countries.

There are some elements of seasonal employment that have been challenged in recent years that coupled with changes in employment law throughout the EU mean that there are some established practices that need a second look.

Holiday pay is a real hot potato: Who gets holiday pay and how do you pay it??

Well there is a simple answer – all workers, whether on piece rate, hourly paid, daily casual or anyone else get holiday pay.

How you pay it?  Having taken some good advice on this one, the first rule is make sure that it is listed, clearly, on the payslip.  In most cases paying as and when the holiday is taken is to be recommended; the exception is that daily paid casuals are paid in full at the end of the day’s work.  By paying holiday by the hour, there is an implication that workers are not free to take holiday when then choose..      

The best recommendation has to be that everyone conducts an annual review – you do it with your accountant and the bank manager and you’ll be in big trouble with both of them if you get employment issues wrong.  We are fortunate in the South East to have some excellent advice providers and employment experts, consult them as you would your accountant, that’s money well spent too.