CIPS News


21% of UK Supply Chain Managers Have Seen Wage Violations in Their Supply Chains

CIPS 24 August 2018

Research from the Chartered Institute of Procurement & Supply (CIPS) has today revealed that 21% of UK supply chain managers have seen wage violations in their supply chains over the last two years.

When asked about the types of wage violations they have seen:

  • 14% said they have seen evidence of staff being paid late  
  • 10% said they have seen staff not being paid the minimum wage within the country the supplier is based
  • 3% said they have seen both 

The situation could worsen as Brexit is likely to squeeze supplier margins further, with more than half (54%) of UK supply chain managers stating that they will renegotiate prices with suppliers to cope with a potential increase in costs after the UK leaves the EU, according to an earlier survey from CIPS published in March 2018

This comes after the release of the Labour Market Enforcement Strategy in May 2018, which provided recommendations to the Government on how to prevent labour abuses, such as wage violations and cases of modern slavery 

When asked what should be done to remove labour abuses from supply chains, supply chain managers based in the UK said the Government should:  

  • Hold the public sector to the same standards as the private sector (65%)  
  • Provide more advice to help businesses find labour abuses in their supply chain (63%)  
  • Public procurement contracts should explicitly compel compliance with labour market regulations (56%)  
  • Name and shame businesses who use suppliers that commit labour abuses (54%)  

Cath Hill, Group Director at the Chartered Institute of Procurement & Supply (CIPS), said:

“The vast majority of British businesses would agree that short changing their employees is inexcusable, but when it comes to the workers further down their supply chain they don’t have the same level of concern. Whether a supplier is in Shenzhen or Sheffield, businesses have an obligation to ensure that the human beings making their products are free, safe and properly paid.

“Ignorance is no excuse. It is the responsibility of procurement teams to regularly visit their suppliers to ensure workers are paid in full and on time. When suppliers are squeezed and prices are pushed down, cuts must be made. Too often it is the people at bottom of the supply chain who feel the pinch. As a country we must take meaningful action against businesses who reap the benefits of worker exploitation in their supply chain.”

 

Types of labour market abuses 

 

Supply chain managers who have found the labour abuse in their organisation’s supply chain 

 
 

Poor working conditions (e.g. dirty environment, health & safety risks) 

 

15% 

 
 

Suppliers not conforming with relevant quality standards (e.g. food health safety standards) 

 

14% 

 
 

Late payment of staff 

 

14% 

 
 

Staff not being paid the minimum wage in their country

 

10% 

 
 

Suppliers giving false information about their products (i.e. providing inaccurate or fraudulent details about raw materials) 

 

9% 

 
 

Use of undocumented workers 

 

7% 

 
 

Workers banned from forming unions 

 

5% 

 
 

Child labour 

 

2% 

 

 

Notes to Editors:

About these figures
These findings were drawn from a survey of 825 UK supply chain managers who were asked about their views on modern slavery and other labour abuses. The survey ran from 29 May to 25 June 2018.

While the responses are from supply chain managers based in the UK, many of the businesses have global supply chains with suppliers located in a variety of different countries.

About the Chartered Institute of Procurement & Supply:
The Chartered Institute of Procurement & Supply (CIPS) is the leading international body representing purchasing and supply management professionals. It is the worldwide centre of excellence on purchasing and supply management issues. CIPS has a global community of 200,000 in 150 different countries, including senior business people, high-ranking civil servants and leading academics. The activities of purchasing and supply chain professionals have a major impact on the profitability and efficiency of all types of organisation and CIPS offers corporate solutions packages to improve business profitability.  www.cips.org, @CIPSnews.

Page Loading
Page Loading
Page Loading
Page Loading

Searching...

This may take up to 30 seconds