About ethical and sustainable work practices

What are ethical and sustainable work practices?

‘Ethical work practices’ means treating workers:

• lawfully
• in a fair and decent way, and
• with respect for their rights.

‘Sustainable work practices’ are ways of working that:

• meet current needs
• can be maintained over time, and
• allow future generations to meet their own needs.

Modern slavery and worker exploitation

The terms ‘modern slavery’ and ‘worker exploitation’ are often used to talk about situations where workers are not treated ethically.

Modern slavery

‘Modern slavery’ generally means exploitative situations which someone cannot refuse or leave because of threats, violence, coercion, deception or abuse of power. It includes:

• forced labour
• debt bondage
• forced marriage
• slavery and slavery-like practices
• human trafficking.

Modern slavery is illegal behaviour which sits at the extreme end of a continuum of exploitation. It is a serious violation of human rights.

Worker exploitation

‘Worker exploitation’ is behaviour that causes, or increases the risk of, harm to a worker. It is unlawful behaviour across a continuum of exploitation that harms workers. It includes non-minor breaches of employment standards which cause material harm to a worker’s economic, social, physical or emotional wellbeing. ‘Non-minor’ breaches can include things like intentionally:

• not paying the minimum wage
• charging someone to get or keep a job
• unlawfully deducting money from a worker’s wages.

Whether a breach is ‘non-minor’ will depend on the circumstances, for example:

• how often the breach happened and over what period of time
• the amount of money involved
• the intention behind the breach, and whether it was deliberate or a genuine mistake 
• how long the employer has been in business
• the size of the business
• what the impact of the breach is and how easy it is to resolve.

Why ethical and sustainable work practices matter

The Global Slavery Index estimates that on any given day, nearly 50 million people are living in modern slavery across the world. Of these, over 8,000 are estimated to be living in modern slavery in Aotearoa New Zealand.

Global Slavery Index – Walk Free(external link)

Worker exploitation in New Zealand can range from:

• a migrant worker who’s been charged for a job, had their passport taken away and then not allowed to leave their workplace, to
• a Kiwi who’s working and not getting the holidays and leave they’re entitled to or allowed to take regular breaks.

Modern slavery also exists in business supply chains where products are manufactured overseas and imported into New Zealand. Workers in low-income countries who are producing goods at very low costs are at increased risk of being exploited and treated poorly. According to research conducted by World Vision NZ, the average household in New Zealand spends $77 each week on ‘risky goods’ that are linked to forced labour.

Risky Goods Report 2023 New Zealand – World Vision NZ(external link)

Everyone who interacts with the world of work — for example, consumers, investors, employers or procurers — can play a part in tackling modern slavery and promoting responsible business conduct. New Zealand businesses — including public sector organisations, NGOs, trusts and other types of entities — should make sure their operations, business relationships and value chains (including supply chains) do not contribute to worker exploitation or harm.

Modern slavery is a risk for New Zealand businesses

Behaving ethically and sustainably is not just the right thing to do — it’s also good for business. Good work practices can boost customer loyalty and demand for your goods and services. Work practices that are not legal, ethical or sustainable can damage your reputation and expose your business to significant risks. They could reduce your business’s revenue, profit, financial viability and market value.

Consumer demand 

New Zealanders are becoming more aware of exploitation and mistreatment of workers. Consumers and investors are considering how businesses treat their workers when they decide where to shop and which businesses to invest in. Businesses that do not address modern slavery and worker exploitation risk losing customers and investors. 

Kantar’s 2024 ‘Better Futures’ survey found New Zealanders want fairer businesses.

• 60% of respondents wanted their future employer to be socially and environmentally responsible.
• 50% would stop buying certain products/services because of their impact on the environment or society.

Better Futures — Kantar(external link)

Employee retention

Businesses that take a stand against modern slavery often promote a culture of respect, dignity and fairness. This can positively affect employee morale, retention and productivity.

Risk management and compliance

Businesses involved in — or connected to — modern slavery and worker exploitation face significant financial, legal and operational risks, particularly if they are importing or exporting products. These can include sanctions, fines and supply chain disruptions. 

All these risks make it essential to have systems and processes in place that identify and eliminate worker exploitation, not just in your own business but also the businesses you engage with. Taking initiative isn’t just the right choice — it’s also good risk management.

Modern slavery legislation and the law

New Zealand does not currently have modern slavery legislation, however there is already legislation in place which criminalises slavery and trafficking in persons. All employers must comply with employment standards, which are an essential foundation for being an ethical employer and preventing worker exploitation.

Employer rights and responsibilities

Employers who breach employment standards are breaking the law. They may be restricted from supporting visa applications and put on the employer visa stand-down list. They may also be fined. 

Employers on stand-down

Employers who comply with employment law and meet employment standards will meet the basic requirements for treating their workers legally. However, true ethical and sustainable treatment of workers goes beyond the basics. Businesses should also consider what else they can do, for example:

• pay the living wage
• commit to training and developing their workforce 
• develop workplace policies that promote employee wellbeing, equity and inclusion.

Living Wage Movement Aotearoa New Zealand(external link)

Creating workplace policies and procedures

‘Persons involved’ and directors also have legal obligations to make sure workers are treated lawfully. A ‘person involved’ is someone who’s involved in a breach of employment law and can include someone who, for example:

• has influence or control over how an organisation is run
• knows about, influenced or caused the breach. 

Employment Relations Act 2000 s142W Involvement in breaches – New Zealand Legislation(external link)

Global expectations about modern slavery and responsible business conduct

Internationally, there are growing expectations that countries and businesses act responsibly and do more to address modern slavery and worker exploitation. 

Although New Zealand does not currently have modern slavery legislation, many of our trading partners do, for example, Australia and the UK. New Zealand businesses that export their products will often need to comply with this legislation. It requires them to report on the risks of modern slavery in their operations and supply chains and what they’re doing to address those risks.

The British and Australian governments have published guidance about how to comply with their modern slavery legislation. Find out more:

Modern Slavery Statements Register – Resources – Australian Government(external link)

Slavery and human trafficking in supply chains: guidance for businesses – GOV.UK(external link)

The OECD (Organisation for Economic Co-operation and Development) and UN (United Nations) have published guidance about what governments and businesses can do to deal with and prevent work practices that cause harm.

European directive on corporate sustainability due diligence

On 25 July 2024, the EU ‘Directive on corporate sustainability due diligence’ came into force. The aim of this Directive is to foster sustainable and responsible corporate behaviour in companies’ operations and across their global value chains. The new rules will ensure that companies in scope identify and address adverse human rights and environmental impacts of their actions inside and outside Europe.

Corporate sustainability due diligence - European Commission(external link)

What you can do and social practice due diligence

Report an employment breach

Anyone who sees or suspects a breach of employment standards can report it. This may include issues around minimum wage, holiday pay, leave entitlements, wage deductions and record-keeping.

Report a breach:

Labour Inspectorate complaints

Report migrant exploitation

Migrant workers have the same minimum employment rights as New Zealand workers. If you, or someone you know, is being exploited in the workplace, you can report it to us. 

Migrant exploitation

Social practice due diligence

You can take action to make sure your operations, value chain (which includes your supply chain) and business relationships do not contribute to worker exploitation or harm. Carrying out social practice due diligence in your own organisation and organisations you engage with is essential to this. Social practice due diligence involves:

• identifying risks of modern slavery and worker exploitation across an organisation’s operations and supply chains 
• taking steps to address any risks identified, and 
• evaluating the steps taken.

Effective due diligence can look different for different organisations. It will depend on things like the organisation’s size, the nature of their operations, and what is reasonable and proportionate to address the modern slavery and worker exploitation risks they face. You don’t need a perfect system to get started. Map what you can, use existing tools and risk management processes, and build from there. 

Below is a longlist of due diligence actions you could take. You should cross-check and compare the information you gather in each action so that you can verify your findings from more than one source.

Positioning statements

Look at the organisation’s vision, mission and values statements and what they say about how workers are valued and treated. These statements set the scene for everything that happens in the organisation, so it’s important they are clear and meaningful.

Codes of Conduct

Look at the organisation’s codes of conduct to see what they say about expected behaviours around business ethics, employment practices and treatment of workers. They should cover what’s expected internally (for staff) and externally (for example, for suppliers). They should also say what will happen if the codes are not complied with. If your own organisation does not have any codes of conduct, consider creating them.

Workforce planning

Estimate what resources will be needed to buy or supply goods or services — for example, budget, workforce and time — and make sure these are adequate to cover fair treatment of workers and reduce the risk of worker exploitation.

Supply chain mapping

Map your supply chain to identify worker exploitation risks. This includes all businesses, employers, and suppliers across the whole supply chain.

Risk assessment

Assess worker exploitation risks across your operations, supply chain and business relationships, and identify what actions can be taken to mitigate them.

Procurement or purchasing

Incorporate social or other outcomes across your procurement cycle (Plan–Source–Manage) — for example, labour rights, employment standards, and any other conditions the procurer expects from suppliers.

Recruitment processes

Review recruitment processes to see if they include questions to identify whether a person may have been trafficked, paid a premium (fee) to get a job or was exploited whilst seeking employment.

Audit, self-audit and supply chain audit

Do regular self or third-party audits of your own organisation, supply chain and business relationships, to make sure they’re complying with employment law and any other conditions you require. The audits should identify any non-compliance and what corrective actions are needed.

Training on modern slavery and worker exploitation

Check if members of your organisation and your supply chain receive training on spotting the warning signs of modern slavery and worker exploitation and how to report it.

Employee/worker-voice platform

Carry out a survey or interview workers to get feedback about their working conditions and how they’re being treated so that you can identify any potential employment issues.

Worker hotline and whistleblowing channel and escalation process

Provide a hotline or whistleblowing channel (separate to an employee-voice platform), which is available any time, to report serious employment issues like breaches of employment standards. This could be operated in-house or by an external company. Provide an internal escalation process and point of contact to report worker exploitation.

Data analysis, reporting and monitoring

Collect and analyse the data you’ve gathered, and regularly review it to see a picture of compliance with employment law and how workers are being treated in your own organisation, your supply chain and across your business relationships.

If you’re an auditor, director, employer, franchisor, investor, procurer or recruiter, you can read more about how to turn values into action and carry out social practice due diligence here:

Auditing compliance with employment standards

Director’s approach to ethical and sustainable work practices

Employer’s approach to ethical and sustainable work practices

Franchisor’s approach to ethical and sustainable work practices

Investor’s approach to ethical and sustainable work practices

Procurer’s approach to ethical and sustainable work practices

Recruiter’s approach to ethical and sustainable work practices