皇家华人

Defra has commissioned a study to explore the feasibility and impacts of transferring cost of employment (such as visa and travel costs) currently carried by seasonal workers on to employers.

The study will consider impacts on worker welfare and in particular on the sustainability of the horticulture sector.

Alma Economics has been commissioned to carry out the study. As part of its research Alma Economics is conducting a survey of horticulture growers that aims to gather feedback on what proportion of any increase in labour costs can be 鈥榩assed-through鈥� the supply chain.

Cost 鈥榩ass through鈥� describes what happens when a business changes the price of the products it sells following a change in the cost of producing them.

The survey contains multiple-choice questions and should take less than 5 minutes to complete.聽

We urge all growers who employ seasonal workers to complete the survey so that Alma Economics and Defra understand how increases in costs of production can or cannot be passed on through the supply chain.

The survey will close on Friday 28 February at 11pm.

Ahead of changes to the SMETA/SEDEX audit coming into force on 10 September, the NFU wrote to the BRC, calling for further information and documentation from retailers on how each standard will be dealt with.

In our letter, we also sought agreement that growers should not be audited against the 鈥榬ecruitment fee鈥� CAR.

Outstanding concerns include:

• The limited consultation with grower businesses prior to the standards being published.
• The lack of impact assessment on what this will mean for UK food production.
• The unilateral decision making by SEDEX to adopt new standards which it openly accepts cannot easily be delivered nor adequately audited.
• The significant cost burden this will place on the supply chain and the likelihood this will fall mainly on growers鈥� shoulders.
• The potential for individual retailers in future taking different approaches to CARs within their supply chain and the complexity and cost this will create for suppliers who supply multiple customers.

Reassurance on CARs

In response to our concerns, the BRC wrote to us, giving the following advice on its approach to CARs.

For businesses being audited under the SMETA 7.0 standards: 鈥楾he presence of a CAR raised at an audit will not impact a supplier鈥檚 ability to supply, provided a collaborative action plan is subsequently developed.

鈥榃hen a CAR is raised, suppliers should engage with all customers to discuss what collaborative action is required, including any implementation challenges. Suppliers and their customers should develop a case-specific collaborative action plan together to ensure the highest level of alignment.

If a CAR uncovers illegal recruitment fees or child labour remediation, more urgent action will be required. For example, the action could involve informing the appropriate authorities or immediate steps to protect the child鈥檚 welfare. In cases such as these, the Serious Incident Escalation Protocol outlines a clear process in which CARs can be addressed and resolved as a collective.鈥�

The BRC once again stated that CARs raised against legal recruitment fees associated with the Seasonal Workers Scheme will automatically be deemed as 鈥榠n progress鈥� for UK suppliers, while awaiting the findings of the Defra funded feasibility study into the EPP (Employer Pays Principle).

The feasibility study is expected to report in the summer of 2025.

Commitment to collaboration with suppliers

The BRC said it recognised NFU members concerns鈥� around the study and reiterated that the purpose of the study is to assess the feasibility of adopting EPP 鈥榝or the whole supply chain鈥�.

It said: 鈥楾he feasibility study clearly demonstrates collaborative action, in which it seeks to understand how all stakeholders in the supply chain can address the systemic issues resulting from legal recruitment fees being paid, and consider how responsibility can be shared fairly.

鈥榃e would like to reiterate our commitment to collaboration with suppliers to comprehend the scale and complexity of implementing CARs and to determine the most effective ways of supporting our supply chain partners.

鈥榃e assure suppliers that there will be no standard policy to penalise, delist, or suspend trade with a supplier who has:

• Transparently shared issues with their customers;
• Cooperated with authorities where applicable;
• Proactively engaged in collaborative action;
• Not been found to be complicit.鈥�

Further guidance delayed

The BRC has said it will continue to meet with SEDEX to enable more detailed guidance on expectations and best practice when responding to issues marked as Collaborative Action Required.

The additional guidance which the BRC previously committed to deliver before the end of August has not been forthcoming. The consortium said: 鈥業t is important to note, the final group of SMETA Workplace Requirement guidance was delayed, with the deadline for submissions pushed to 2nd September 2024.

鈥榃e were then updated by SEDEX on 5th September at the FNET SEDEX 6-weekly call on the outputs of this consultation. Some of these documents have now been published, with the rest expected in the next week.鈥�

The BRC has said it will maintain this position until there is an opportunity to review how SMETA 7.0 is implemented. The revised copy of the Serious Incident Escalation Protocol will be shared in due course.

皇家华人continues to work hard to push back on changes to the SMETA/SEDEX audit, however, SEDEX has confirmed that the changes to the audit will launch on 10 September despite the widespread concerns that have been put forward by the NFU and other stakeholders.

However, one way to mitigate the impacts of the new audit and opt for a SMETA6.1 audit is to book early with an audit company and ensure the audit is scheduled on the SEDEX system before 10 September 2024.

Please note SEDEX has confirmed:

• Initial and periodic audits scheduled before 10 September and carried out before 31 December 2024 will be under the old SMETA 6.1.
• Initial and periodic audits scheduled after 10 September 2024 will default to the new SEMTA 7.0.
• Audit firms can continue to schedule partial follow-up audits under SMETA 6.1 until the end of 2025.

In a call with the NFU and other stakeholders, including representatives from some of the major supermarkets, FNET and BRC on 1 August, it was confirmed by Sedex that under the new SMETA 7.0 audit the UK statutory National Living Wage is accepted as currently exceeding what is termed a 鈥榗redible living wage鈥�.

Under the new SMETA 7.0 audit there are requirements in area code 5A to:

• Review workers鈥� total pay including benefits and compare it with a credible 鈥榣iving wage鈥� to calculate a 鈥榣iving wage gap鈥�, and understand what proportion of the workforce has a gap.
• Put in place a wage improvement plan that aims to pay workers a living wage within a stated timeframe.

Sedex confirmed that as one of its accepted living wage benchmarks, Wage Indicator, currently calculates that a living wage for the UK market is actually below the UK statutory National Living Wage, there is no need to carry out a review and do a gap analysis as long as all the workforce is paid a wage at or above the National Living Wage rate.

Nor is there a need to put a wage improvement plan in place as long as all the workforce is paid at or above the statutory UK National Living Wage.

The BRC has on behalf of retailers setting out its expected approach to the new SMETA scheme CAR (Collaborative Action Required) requirements.

Further information due to be published before the end of August is expected to specify the actions required under each standard, but the BRC statement aims to reassure growers that there will be no immediate expectations of compliance against the most challenging CARs nor immediate penalties applied.

Further clarity is required, but the implication is that the requirement to reimburse recruitment costs will automatically be deemed 鈥榠n progress鈥� for UK growers due to the forthcoming Defra funded feasibility study into the Employer Pays Principle.

皇家华人is pushing for the additional guidance to be published as a matter of urgency.

皇家华人raises two main areas of concern following the news of the changes.

The first is the expectation that audited employers verify that costs incurred by workers in relation to securing a job are 鈥榬eimbursed鈥� in a timely manner.

It is already unlawful to charge workers 鈥榝ees鈥� in order to secure a job, but according to SEDEX this standard also requires workers to be reimbursed for any other costs they may have incurred.

This might include the costs of getting a visa (if they are coming from another country), travel costs, insurance, medicals and so on. This applies to all workers, whether seasonal, permanent, from overseas or domestic, though the implications for employing seasonal workers from overseas is most acute.

The second area of concern is the expectation that businesses have plans to move to the Real Living Wage, and no longer use the National Living Wage聽as the minimum.

It will not yet be a requirement to actually pay the Real Living Wage, but to show there is a realistic plan to do so in the future. On this, we are seeking further clarity.

NFU action

皇家华人has held discussions with SEDEX about the implications of the new standards and reinforced our call for a halt in its implementation.

We have also reached out to major retailers asking for high-level meetings and have had dialogue with some of their Human Rights teams to understand if, or how, they intend to implement the standard.

Read our latest progress update in full.

皇家华人first calls for a halt to the proposed changes, which will require UK farming and growing business to pay for the recruitment and transportation costs of the seasonal workers they employ.

NFU President Tom Bradshaw said: 鈥淚 am shocked that a decision such as this, which could have detrimental financial implications on our farmers and growers 鈥� already struggling with high input costs, extreme weather events and challenges in the supply chain 鈥� has been decided without the consultation of the people and businesses it will affect.鈥�

Read our reaction in full.