Promoting Workplace Compliance Within Labour Supply Chains

Ebony-Maria Levy explores how charities at the apex of fundraising supply chains can discharge their obligations under Australian workplace laws to ensure fundraisers are lawfully engaged.

As the Fair Work Ombudsman’s (FWO) Charity Collection Inquiry continues, charities and fundraising suppliers increasingly ask what they can expect once the inquiry’s findings are released.

On Monday the FWO released the findings of another inquiry, into the procurement of security services by local government, identifying measures for councils to improve their supply chain governance efforts. These lessons are readily applicable to charities and fundraising suppliers.

In describing the findings of the inquiry, FWO Natalie James reiterated a longstanding warning that “a lack of oversight and accountability on the part of organisations at the top of the supply chain…can play a significant role in creating conditions that give rise to non-compliance by contractors further down the chain”.

So how can charities at the apex of fundraising supply chains, sometimes with complex and multi-level contractor networks, discharge their obligations under Australian workplace laws to ensure fundraisers are lawfully engaged?

Proactive governance measures

Don’t wait for the findings of the Charity Collection Inquiry to be published before you implement supply chain governance measures.

In the case of security services procured by local government, the FWO stated that “an absence of any proactive governance measures or real-time compliance auditing by councils of the contractors they engaged to provide security services meant little was being done to ensure that contractors were complying with workplace laws and paying workers correctly”.

Charities and suppliers have an opportunity to adopt proactive governance measures. For example, look to the FWO’s guide to promoting workplace compliance in your franchise network, which offers a practical process for compliance, applicable irrespective of the operating model used by an organisation. The process includes recommendations to set expectations, provide education and training, monitor compliance and take further action as required.

Implement a supplier code of conduct and responsibility standards statement

Setting expectations for suppliers is an essential first step, including ensuring contractual documentation is fit for purpose and services agreements reflect the sample contract clauses published by the FWO on the Charity Collection Inquiry webpage.

Some charities have recognised the importance of developing, implementing and maintaining adequate governance systems to monitor the behaviour of suppliers and are more able to drive compliance through their labour supply chains; reducing the scope for suppliers and their sub-contractors to exploit and underpay vulnerable workers. These charities have developed a cohesive response through the implementation of a supplier code of conduct and responsibility standards statement, against which their suppliers are required to comply.

This provides a functional work plan for ensuring supply chain governance systems are embedded by suppliers and their sub-contractors, noting the FWO’s identified correlation between multiple levels of subcontracting and non-compliance with workplace laws.

These are selected examples of some of the measures proactively adopted by charities who outsource their fundraising and recognise the value of implementing practical and effective safeguards:

• requiring suppliers to keep accurate employment records, facilitating real-time verification as to whether employees are receiving their full employee entitlements;
• ensuring any supplier who contracts out has proper governance structures in place to monitor and regulate the employment practices of its subcontractors;
• requiring suppliers to sign a compliance commitment certifying that its directors, officers and managers understand their obligations to comply with Australian workplace laws;
• requesting that suppliers register with the FWO My Account portal;
• requiring suppliers to undertake an annual self-audit including field and desktop reviews against sample periods nominated by the charity;
• obtaining an annual compliance statement which includes a description of the worker engagement operating model/s used and details of any sub-contracted service providers the supplier has engaged to provide services to the charity;
• delivering compliance training to suppliers and requiring that they do this for any sub-contractors they engage; and
• reviewing a statement signed by the supplier’s director/s warranting the accuracy of information supplied to the charity, including an explanation of why the supplier believes its worker engagement practices and supply chain governance measures facilitate compliance with Australian workplace laws.

To ensure whole-of-supply-chain accountability, it is also prudent to make such documents available to suppliers and other stakeholders through publication on the charity’s website.

Promoting workplace compliance within labour supply chains remains an ongoing focus for the FWO, and charities face increasing scrutiny in a legal and regulatory environment which asks, less rhetorically than ever, “could fundraising be fairer?”

About the author: Ebony-Maria Levy is managing partner at the Labour Standards Centre of Excellence.