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Consultation on Modern Slavery and Worker Exploitation

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The Government’s proposal around Modern Slavery / Work Exploitation will create new responsibilities for employers to take action if they become aware of modern slavery or worker exploitation. Medium and large organisations would be required to disclose the steps they are taking.

Our submission, which you can read below focused primarily on investment in supporting businesses through this period of regulatory reform.


June 2022

Executive Summary

Modern Slavery and Worker Exploitation has no place in a modern economy and should be stamped out at every opportunity. As such, we support the overarching principle of this consultation in ensuring people are treated fairly and with dignity.

For our part, we continue our work to transform the perception of hospitality. Central to this is moving rhetoric away from a sector that is viewed as a stepping-stone job for secondary students and a stop-gap job for tertiary students, to one that provides meaningful, fulfilling and life-long careers. With that in mind, any changes to Aotearoa New Zealand’s workplace relations framework which assist us in achieving this transformation have our support.

With the sheer scale and number of regulatory changes facing businesses, support to adapt is integral to the successful implementation and long-term success of such change. Our submission focuses primarily on investment in supporting businesses through this period of regulatory reform.

The Restaurant Association makes the following recommendations:

  • Recommendation 1: further consultation is needed on a more detailed proposal regarding the responsibilities and obligations of entities in New Zealand, as they pertain to Modern Slavery and Worker Exploitation.
  • Recommendation 2: well resourced compliance and engagement initiatives on any future frameworks, so small businesses are well informed.
  • Recommendation 3: further consultation is needed on a more detailed proposal regarding the enforcement and remediation penalties framework, as it pertains to Modern Slavery and Worker Exploitation.
  • Recommendation 4: the labour inspectorate should be adequately funded to both execute its role and undertake stakeholder engagement to better understand the different requirements for the industries with which they engage.
  • Recommendation 5: the proposed register should be established as part of a central hub of information, which supports both entities and consumers by making it as easy as possible to report, monitor and evaluate international and domestic operations and supply chains.
  • Recommendation 6: the scope of the regulator should be expanded beyond simple enforcement, to include the monitoring of local and international operations and supply chains with the express intent of simplifying the due diligence process.
  • Recommendation 7: the introduction of responsibilities and penalties should be a staged, two-part process to allow time for entities to adapt to new requirements before being penalised as a result of the changes.

Introduction

  1. The Restaurant Association of New Zealand (the Restaurant Association) welcomes the opportunity to make a submission on the government consultation on Modern Slavery and Worker Exploitation.
  2. Modern Slavery and Worker Exploitation has no place in a modern economy and should be stamped out at every opportunity. As such, we support the overarching principle of this consultation in ensuring people are treated fairly and with dignity.
  3. The pandemic has illuminated the precarious state of workforce settings and skills shortages across a number of sectors, hospitality included, which necessitates a well thought out, pragmatic approach to reform of workplace relations. New Zealand already has strong employment laws and a good workplace relations framework in place, but that does not mean these cannot be improved upon.
  4. All sectors have unscrupulous operators from whom we must protect workers, and we support the Government taking an aggressive approach to overcoming the pitfalls in our current legislative frameworks to take real action in disavowing these entities.
  5. Within the hospitality sector, employers are predominantly owner-operators, who are intimately involved in the day-to-day running of their business. This means their access time and resources are often limited. Better resourcing of the labour inspectorate, with inspectors educated in the realistic operations of small business, would be welcome.
  6. For our part, we continue our work to transform the perception of hospitality. Central to this is moving rhetoric away from a sector that is viewed as a stepping-stone job for secondary students and a stop-gap job for tertiary students, to one that provides meaningful, fulfilling and life-long careers. With that in mind, any changes to Aotearoa New Zealand’s workplace relations framework which assist us in achieving this transformation have our support.
  7. The Restaurant Association’s submission is set out below.

Responsibilities and Obligations

  1. We agree that all entities should have to take reasonable and proportionate action if they become aware of modern slavery in their international operations and supply chains, and/or modern slavery or worker exploitation in their domestic operations and supply chains.
  2. However, the definition of what is reasonable and proportionate will depend on the final shape of any legislative or non-legislative changes as a result of this consultation. As such, we recommend that further consultation is undertaken when a more fulsome proposal outlining anticipated changes and government actions are available for feedback.
Recommendation 1: further consultation is needed on a more detailed proposal regarding the responsibilities and obligations of entities in New Zealand, as they pertain to Modern Slavery and Worker Exploitation.
  1. The majority of the hospitality sector would fall into the ‘small’ category of business if defined by the proposed revenue scale of <$20m.
  2. Given the natural limits on small businesses regarding their capacity and available resources, we maintain that the government should make it as simple as possible for these entities to participate in the prevention and mitigation of modern slavery and worker exploitation.
  3. While we are reluctant to comment on what should be required of ‘medium’ and ‘large’-sized entities, in keeping with the spirit of our submission we believe that any obligations for these entities should support a whole-of-economy approach to preventing and mitigating modern slavery and worker exploitation.
  4. The Restaurant Association submits that it makes sense for greater responsibilities to lie with ‘medium’/’large’ entities, given the increased likelihood they will be directly involved in their supply chains. These responsibilities should benefit smaller entities, and as such we support the proposed graduated set of responsibilities.

Enforcement and Remediation

  1. The Restaurant Association submits that, instead of focusing so heavily on the design of penalties and enforcement actions, the focus should be on making it as simple as possible for entities to participate in any future frameworks.
  2. While compliance is important to the success of any scheme, encouraging compliance through supportive and enabling measures – rather than enforcing it with punitive sanctions – would be more attractive in the current trading environment, which remains an ongoing challenge for hospitality.
Recommendation 2: well resourced compliance and engagement initiatives on any future frameworks, so small businesses are well informed.
  1. The Restaurant Association also submits that further consultation with employers is required to ensure that any enforcement actions and penalties to be implemented under this framework are proportionate and appropriate. This consultation should take place before the formal legislative process begins, with a fully drafted proposal for consideration.
Recommendation 3: further consultation is needed on a more detailed proposal regarding the enforcement and remediation penalties framework, as it pertains to Modern Slavery and Worker Exploitation.

Independent Oversight

  1. The Restaurant Association submits that establishing an independent oversight mechanism, such as a Commissioner, would be an unnecessary additional cost. The focus instead should be on strengthening existing mechanisms that could fulfil this role.
  2. We have consistently called for greater support and funding for the labour inspectorate, so they can more effectively undertake their duty of ensuring compliance with employment standards.
  3. Greater support and funding should include an expanded responsibility of the inspectorate to engage with industries to better understand the nuances of operating in different sectors.
Recommendation 4: the labour inspectorate should be adequately funded to both execute its role and undertake stakeholder engagement to better understand the different requirements for the industries with which they engage.

Central Register and Support Services

  1. While we agree with the establishment of a central register for disclosure statements, we do not think this goes far enough in attempting to support the aims of this consultation.
  2. We recommend that any central register that is established should also act as a public register of what enforcement action has been taken against those who are found to be benefitting from the practice of Modern Slavery or Worker Exploitation.
  3. This register should also act as an information hub with relevant guidance and toolkits, as well as a blacklist of supply chains which are found to have been in breach of proposed standards, to support entities in their compliance efforts.
Recommendation 5: the proposed register should be established as part of a central hub of information, which supports both entities and consumers by making it as easy as possible to report, monitor and evaluate international and domestic operations and supply chains.
  1. The best way to facilitate lasting cultural change and encourage best practice across the operations and supply chains of entities is to support the growth of consumer behaviour toward more ethical consumption.
  2. The Restaurant Association supports the public notification of actions taken against entities found to be in breach, as these will undoubtedly serve as a deterrent for those operators who wish not to face the court of public opinion.

Monitoring and Evaluation

  1. As noted in the consultation document, there are already a number of regulators and industry bodies in New Zealand’s employment standards, workplace health and safety and corporate governance systems.
  2. Whichever body takes on regulatory responsibilities under Modern Slavery and Worker Exploitation legislation, should also have a wide mandate for work, which could include the provision of research, monitoring and support for businesses to make it as easy as possible to comply with any subsequent regulation. 
  3. We believe the regulator should support the adoption of good operational and supply chain practice, and compliance with proposed responsibilities, through more than just monitoring of local entities to ensure they are ‘following the rules’.
  4. A competent regulator, in our view, would take on a wider scope of work and responsibility for making it as easy as possible for local entities to comply with any proposed responsibilities. This includes (but is not limited to) a research and monitoring role of international supply chains and markets, identifying and publicising those which engage in slave labour or worker exploitation to simplify the due diligence requirements of local entities and make compliance as simple as possible.
Recommendation 6: the scope of the regulator should be expanded beyond simple enforcement, to include the monitoring of local and international operations and supply chains with the express intent of simplifying the due diligence process.
  1. In light of the sheer number and scale of regulatory changes facing businesses in Aotearoa, we have repeatedly recommended that changes include phase-in periods to allow both the recovery and preparatory time needed by business to effectively adapt to each of the changes.
  2. To ease the impact on business, the phase-in period should be graduated, with the implementation of responsibilities to come first, followed by a transitionary period before the application of penalties is implemented.
Recommendation 7: the introduction of responsibilities and penalties should be a staged, two-part process to allow time for entities to adapt to new requirements before being penalised as a result of the changes.

About the Association

  1. The mission of the Restaurant Association of New Zealand is to be the link between good food and good business so that our Member’s restaurant or café can succeed. We’re passionate about our vibrant industry, which is full of interesting, talented and entrepreneurial people.
  2. Since 1972, the Association has worked to offer advice, help and assistance in every facet of the vibrant and diverse hospitality industry. We are the representative body for more than 2,500 hospitality businesses, with Members covering the length and breadth of the country. We are organised into 13 regional branches and led by a national office located in Mt Eden, Auckland.
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