Slavery and human trafficking statement 2023 to 2024

4. Organisational policies

The Scottish Government is responsible for public procurement policy and legislation in Scotland and recognises the critical role these play in promoting ethical practices and tackling exploitation in supply chains. As an employer, policymaker, and major procurer of goods and services, the Scottish Government is committed to embedding fair work principles underpinned by a range of policies and strategies aimed at strengthening transparency, accountability, and due diligence across trade, procurement, and workforce practices.

Applying a Fair Work approach

Fair Work is the Scottish Government’s policy for driving high quality working practices across Scotland’s labour market, in the absence of employment legislation (which is a matter that only the UK Parliament can legislate on). This supports our wider efforts to increase transparency in our employment practices and reduce the potential for labour exploitation.

Within our Fair Work policy, through our flagship Fair Work First approach, we are applying fair work criteria to public sector grants, other funding and contracts where it is relevant to do so, driving fair work practices across the labour market.

Since 1 July 2023, by default, public sector grant recipients have been required to pay all workers at least the Real Living Wage and provide appropriate channels for effective worker voice. In October 2021 we announced that any company bidding to win a Scottish Government contract will have to commit to paying at least the Real Living Wage, where relevant and proportionate. We are engaging with relevant sectors to encourage this approach across the whole of the public sector in Scotland to ensure that public sector contracts tackle in work poverty and promote fair work practices.

Fair Work First criteria also asks employers to commit to address workplace inequalities and create more diverse and inclusive workplaces. Providing channels for effective voice for example, helps facilitate open communication with workers to share their lived experiences, advocate for equal rights and ultimately improve workplace culture. This ultimately helps all workers protect their legal rights and ensure fair treatment. Overall, Scotland remains the best performing of all four UK countries with the highest proportion of employees (18+) paid the Real Living Wage or more (88.6).

As an employer, the Scottish Government has shown leadership in developing terms and conditions of employment which offer enhanced benefits over statutory levels, along with adopting fairer working practices which reduce the risk of labour exploitation. This includes:

• enhanced ‘family’ leave/pay
• enhanced holiday entitlements
• enhanced sick pay
• access to a range of flexible working opportunities
• partnership arrangements with recognised trade unions
• becoming the first national government in the UK to be Living Wage accredited
• promoting the payment of at least the real Living Wage to those working on Scottish government contracts
• offering pay parity for agency employees from the outset of their assignment (pay parity is a requirement from week 13 of an assignment under the Agency Worker Regulations)
• adopting a policy of not using zero hours contracts (that is, contracts which compel staff to make themselves available for work offered)
• becoming a Living Hours Accredited employer in November 2023 – recognising that in addition to the Real Living Wage, number and frequency of work hours are critical to tackling in-work poverty.

We have also developed a Fair Work Agreement between Scottish Ministers and the recognised Civil Service trade unions. This Agreement sets out a range of principles on the conduct of employee and industrial relations in line with the principles of the Fair Work Convention’s Framework. The Agreement demonstrates commitment to ensuring that bodies in the Scottish Administration are Fair Work employers and are committed to continually striving to improve policies and practices in that regard. This can best be achieved in partnership with trade unions.

Trade

Scotland’s Vision for Trade sets out the principles and values for the trading relationships we want Scotland to have, now and in the future. The Vision for Trade recognises that a prominent issue for human rights and international trade is addressing the risk of forced labour in international supply chains. Scotland’s trade policy acknowledges that trade can only genuinely be free and fair when the true costs of production are properly reflected in the prices charged for goods. Human rights abuses, including low wages, anti-trade union laws, forced labour, illegal appropriation of resources through occupation or political repression all act to distort markets. The need for Scotland’s trade policy to directly address human rights is therefore both a moral imperative and a practical necessity.

Scotland’s New Deal for Business was a time-limited programme put in place to improve how the Scottish Government works with business, including to achieve a shared understanding of the role and contribution of business in Scotland’s transition to a wellbeing economy. A Wellbeing Economy Sub-Group produced a description of What Wellbeing Economy means for Business, setting out how private enterprises can contribute by being fairer and greener as they grow their business, recognising the importance of promoting the interests of employees, suppliers, communities, society, and the environment, as well as customers and investors. Building on the work of the Business Purpose Commission, it contains examples of practical actions that businesses can take, such as: paying the real Living Wage and offering Living Hours; attracting, supporting, and retaining under-represented groups; supporting employees’ health and wellbeing; and being actively involved in their communities. The Sub-Group also led work to reflect the contribution businesses can make to improving people’s health in the Population Health Framework. A Business Community Summary identifies the role businesses can play as employers, as providers of products and services and as community anchors and sets out where business fits into the wider health system.

Procurement

The Scottish Procurement and Property Directorate (SPPD) is responsible for Scottish Government procurement activity. Like all public bodies, when the Scottish Government buys goods, services or works, it must comply with procurement law obligations.

There are a range of measures in the Public Contracts (Scotland) Regulations 2015, the Utilities Contracts (Scotland) Regulations 2016, the Concession Contracts (Scotland) Regulations 2016, and the Procurement (Scotland) Regulations 2016 aimed at ensuring contractors’ compliance with environmental, social, and employment laws when performing public contracts. Under these regulations:

• mandatory exclusion applies to companies convicted of any offence under Part 1 of the Human Trafficking and Exploitation (Scotland) Act 2015 or any related provisions listed in its Schedule
• discretionary exclusion may be applied to companies that have breached obligations in the fields of social, environmental or employment law
• tenders that do not comply with applicable obligations in the fields of social, environmental and employment law can be rejected
• contracts must not be awarded where a tender price is abnormally low due to breaches of social, environmental or employment law
• contracts clauses should be included to allow for termination in the case of breaches of social, environmental or employment law.

These measures can be used alongside our procurement policy to help reduce the risk of human trafficking and exploitation in the performance of public contracts.

We published an updated Procurement Policy Handbook in May 2024 which provides guidance on the rules and policies relevant to public procurement activity in Scotland. It is applicable to all Scottish public bodies and includes a refreshed section on human rights.

Our procurement guidance covering the purchase of products and services where there may be concerns about human rights, working conditions and exploitation has been designed to help buyers take an ethical approach in their procurement activity. Related procurement guidance on Security and Crime was published in August 2023 making the link between Serious Organised Crime (SOC) groups and human trafficking.

The Scottish Procurement Policy Note 3/2020 offers clear expectations for public bodies to embed anti-trafficking measures into the lifecycle of public contracts. It requires buyers to consider ethical risks, integrate modern slavery provisions into specifications and terms, and exclude suppliers that breach human trafficking legislation. The note references relevant regulations and encourages use of sustainable procurement tools to manage risk.

Prompt Payment in the Supply Chain

Prompt payment of our supply chains, ensuring all suppliers and sub-contractors are paid on time, is not only the ethical and socially responsible thing to do, it is critical to the sustainability and resilience of our supply chains in delivering goods, services and works to, or on behalf of, the people of Scotland.

In April 2022, we published a Scottish Procurement Policy Note updating our prompt payment policy, providing details of how public bodies are to embed prompt payment performance in the supply chain through procurement processes. The update integrates prompt payment into the full procurement process and includes steps which can be taken to check payment performance of suppliers during bids for public contracts and guidance on monitoring prompt payment during the life of a contract.

Public bodies should evaluate past payment performance as part of the selection stage as an indicator of a resilient and sustainable supply chain. Public bodies are also asked to ensure contracts are awarded to bidders who will ensure payment of sub-contractors at all stages of the supply chain within a maximum of 30-day payment terms.

Public bodies should ensure that suppliers have systems and mechanisms in place to monitor, report and address any shortfalls on payment performance of the supply chain throughout the lifetime of the contract.

The Scottish Government continues to lead by example, aspiring to a 10-day target for invoice payments, going beyond our contractual commitment to pay within 30 days. In 2023-2024, the Scottish Government paid 98% of valid invoices within 10 days and 99% of valid invoices within 30 days.