Everyone
About ethical and sustainable work practices
Today’s consumers, employees, procurers and investors expect businesses to treat workers fairly, ethically and sustainably. Learn about ethical and sustainable work practices and why they matter.
New Zealanders are becoming more aware of exploitation and mistreatment of workers, especially migrants, and do not want to engage with businesses that exploit their workers. When deciding where to shop, consumers consider how businesses treat their workers.
These expectations apply to all parties who employ or contract people in their businesses. This includes, but is not limited to:
- organisations acting as employers
- franchisors
- investors and procurers
- businesses providing labour on-hire
- individuals acting as directors or managers
- work brokers.
Why good work practices matter
Behaving ethically and sustainably is the right thing to do.
Good work practices help create a level playing field where those who meet employment obligations cannot be undercut by those using unfair work practices. Good work practices can have a positive impact on customer goodwill, loyalty, and demand for your goods and services. They can also help to attract and retain good workers.
On the other hand, employment practices that are not legal, ethical or sustainable can hurt your reputation and brand. This could reduce your company’s revenue, profit, financial viability and market value.
Businesses that have been penalised for exploiting or mistreating their workers are identified in publicly available information. The law fines and penalises these businesses and prevents them from supporting visa applications from overseas workers for a specific period.
It is essential to have systems and processes in place to identify and eliminate worker exploitation in your business and the businesses you engage with, for example, through your supply chain. This will help ensure you can meet your stakeholders’ expectations and reduce the risks to the viability of your business.
What are ethical and sustainable work practices?
The terms ‘ethical’ and ‘sustainable’ have specific meanings when talking about treatment of workers.
What ethical means
‘Ethical’ means engaging in work practices that are legal, fair, and ensure decent treatment of your workforce by providing conditions that do not cause physical or mental harm to workers.
Meeting the employment standards is an essential foundation for being considered an ethical employer.
Employer rights and responsibilities
Many consider that ethical treatment requires organisations to go beyond the legal minimum. This might include paying the living wage or committing to train and develop your workforce.
The United Nations have published guidance on how organisations can respect human rights.
What sustainable means
‘Sustainable’ means engaging in work practices that meet current needs in a durable and lasting way without compromising the future of your business or industry.
Key terms including those below are explained in our glossary.
Employment rights The requirements in law for how employers must treat, pay and protect their employees. All employees have these rights even if they’re not included in the employment agreement or if the agreement says they get less or worse.
Employment standards A set of employment rights that have been separated out for enforcement purposes, for example, having an employment agreement, and rights around rests and breaks. If an employer does not comply with employment standards, they could face enforcement action, for example, penalties.
Labour rights Broader than employment rights, labour rights cover how all workers (employees, contractors and workers in an organisation’s value chains) are treated.
Human rights Rights that everyone has, for example, the right to health and safety, right to life, right to the freedom from torture, and right to the freedom of expression.
Demand for ethical and sustainable work practices
In New Zealand and across the world, there is increasing demand for ethical and sustainable work practices in response to incidents of worker exploitation, both locally and globally. This includes wage underpayments, harmful working conditions, child labour, forced labour, human trafficking and modern slavery.
This increasing demand is coming from consumers, procurers, investors, company directors, work brokers and recruiters, importers, exporters, employees and labour inspectors. It also involves mainstream and social media, and applies on a national, international and global scale.
Consumer demand in New Zealand
More consumers are choosing which businesses to buy from based on how their workers are treated.
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)
Findings from the New Zealand Consumer Survey in 2022 showed that nearly half of respondents will always or mostly purchase products from businesses which they know treat their employees fairly.
New Zealand consumer surveys – Ministry of Business, Innovation & Employment(external link)
Global support for better work practices
In 2011, the United Nations Guiding Principles on Business and Human Rights introduced guidelines for 'States' (‘States’ refers to countries recognised by the United Nations, including New Zealand) and companies to prevent, address and remedy human rights abuses in business operations.
Guiding Principles on Business and Human Rights – United Nations (external link)
The OECD (Organisation for Economic Co-operation and Development) Guidelines for Multi-national Enterprises are an internationally agreed standard for responsible business conduct across several areas, including disclosure, employment and industrial relations, and combating bribery and other forms of corruption.
The New Zealand government has committed to promote the guidelines, and recommends companies adopt the principles and standards they set out.
In 2015, the United Nations 2030 Sustainable Development Agenda and related Sustainable Development Goals were adopted by United Nations Member States. Goal 8 of the Sustainable Development Goals calls for the promotion of inclusive and sustainable economic growth, employment and decent work for all.
A number of United Nations States have laws to eliminate modern slavery from business and supply chains, including Australia, the United Kingdom, France and the Netherlands. California also has similar laws.
One example is the Australian Modern Slavery Act 2018 (the Act), which looks to increase transparency, and requires some corporate and public sector organisations to report on the risks of modern slavery in their operations and supply chains and to take actions to address those risks. The Act impacts significantly on New Zealand, with EY (Ernst & Young, a multinational professional services firm) estimating in 2018 that 500 New Zealand businesses would be required to comply with the Act’s disclosure requirements.