Focus areas

Coles recognises the importance of engaging directly with workers in our supply chain.  Listening to workers’ experiences helps us better understand risks, strengthen our program and identify opportunities for improvement. Under the Ethical Retail Supply Chain Accord and in partnership with other relevant stakeholders, we have held several Worker Education events in key Australian produce growing regions including Mildura (VIC), Renmark (SA), Coffs Harbour (NSW), Preston Beach (WA) and Grafton (NSW).

These events are designed to provide workers with information on their labour rights, including freedom of association, working hours, superannuation, wages & piece rates, and accommodation. The events also provide workers with an opportunity to speak up and share their experiences.  Workers are provided with fact sheets outlining their entitlements and information on available support and grievance channels.

Seasonal workers are essential to Australian supply chains, particularly in horticulture and meat processing. Temporary migrant workers, including people on the Pacific Australia Labour Mobility Scheme and Working Holiday Makers may be provided accommodation as part of their employment. This highlights the importance of accommodation that is affordable, accessible, safe, secure and supports worker wellbeing.

While many workers are provided with accessible, safe, secure, and clean accommodation, we know through public reports, audit reports and concerns raised through our grievance mechanism channels that substandard living conditions can still occur. Issues may include high costs for board and lodging, poor maintenance, and overcrowding. These issues were also identified in the reportEthical Retail Supply Chain Alliance, View PDF, file size 892KB commissioned in 2022 with our partners in the Ethical Retail Supply Chain Alliance (ERSCA).

We recognise that providing appropriate housing is challenging due to availability, rising costs, fragmented oversight, and varying regulation and rules across Australian jurisdictions. These rules are defined by a patchwork of laws, varying between states and territories, that govern migration schemes, labour hire providers, local council regulations on housing, work health and safety laws, and the Fair Work Act 2009 (Cth) in terms of permitted employee deductions. While extensive in coverage, these various regulations are not always supported by onsite monitoring and follow up.

We have developed clear guidelines outlining minimum standards for accommodation in the Australian horticulture and meat processing supply chains. These guidelines are informed by insights gathered through onsite visits, remediation efforts, third-party audits and grievance mechanisms. In developing the Accommodation Standard we engaged a broad range of stakeholders, including workers, accommodation providers, suppliers, industry representatives, government agencies, retailers, and audit firms, to support a practical, inclusive, and effective approach.

Worker Accommodation Standard

The Accommodation StandardWorker Accommodation Standard, View PDF, file size 167KB represents Coles’ commitment to collaborative progress and establishing a consistent standard that workers can depend on.

The Standard has been commissioned by Coles in partnership with the Australian Workers Union, Shop, Distributive, and Allied Employees Association, and the Transport Workers Union, with research and drafting led by Be Slavery Free. It was developed in consideration of existing standards, including the PALM Scheme Guidelines, Labour Hire Authority Guidelines, Sedex Members Ethical Trade Audit Manual, and Fair Farms Standard. The Standard can be used by stakeholders, including workers, suppliers, labour hire providers, other retailers, and auditors, as a tool to assess accommodation.

The Standard comprises of four key requirements:

1. Rent costs must be fair and provide good value for money;
2. Accommodation must provide adequate living space, kitchen facilities, and sanitation provisions;
3. Accommodation must meet a reasonable standard that is clean, safe, secure, and in good working order;
4. Accommodation providers must ensure their facilities meet the Standard and take responsibility for addressing any identified issues.

The Standard will be assessed through site visits, accommodation reviews, tracking accommodation-related findings in audits, and engagement with suppliers. We expect suppliers, sites and accommodation providers to maintain transparency about accommodation provided to workers, whether directly or through third parties such as labour hire providers. In addition, we recommend suppliers and sites perform regular checks of provided accommodation to facilitate upholding of the Standard.

Workers are encouraged to raise concerns about accommodation standards through Coles’ grievance channels. Further information is available in our grievance mechanisms and remediation section.

According to the International Labour Organisation (ILO), a living wage is a ‘wage level that is necessary to afford a decent standard of living for workers and their families, accounting for country circumstances and calculated for the work performed during the normal hours of work’. While there has been a positive long-term global trend in average wages, many workers worldwide, particularly in developing countries, continue to earn very low wages and live in poverty.

Living wage is one of our salient human rights issues. Promoting a living wage is an important aspect of decent work and can help support workers, families and communities to live in dignity. Workers who may be at higher risk of low wages include migrant and contracted workers in our extended supply chains overseas.

In FY25, working with an external sustainability advisory group, we initiated a pilot living wage gap analysis in selected supplier sites in a high-risk sourcing country. This work is helping us understand wage gaps, the factors that contribute to them and opportunities to address systemic underpayment in key supply chains. We plan to use learnings from this work to support the development of a living wage framework by the end of FY27, including an income adequacy assessment for high-risk countries.

We seek to ensure fair and sustainable relationships with our suppliers. We deeply value our supplier relationships and work hard to interact in a fair, honest, and transparent manner. We recognise that purchasing practices can influence working conditions and wages in supply chains. This includes the importance of accounting for production and labour costs, providing appropriate payment terms, supporting accurate volume forecasting and allowing adequate lead times.

Policies related to supplier engagements and payment terms are available on our supplier portals. This includes our Cost Price Alteration Policy which guides how suppliers can request an amendment to trading terms due to increased business costs and how we assess those requests. It also includes our Payment Policy and Procedure which outlines our process for paying suppliers on time and in line with agreed timeframes.

Working with an external sustainability advisory group, we are assessing purchasing practices in selected supply chains to inform our work on living wage. The assessment draws from the Ethical Trade Initiative Common Framework for responsible purchasing practices in the food sector and includes consultation with internal buying and procurement teams as well as suppliers. Following this work, we plan to extend this assessment across additional commercial units and suppliers, deepening our understanding of factors influencing purchasing practices. These findings will inform the continued development of a Responsible Purchasing Policy that strengthens the integration of human rights considerations into purchasing decision making across the business.

We understand that the recruitment and supply of temporary, contract and seasonal labour is an area of risk within our supply chain. Our Ethical Sourcing Policy embeds the Employer Pays Principle ‘No worker should pay for a job – the cost of recruitment should be borne by the employer’.  Suppliers are required to take steps to recruit responsibly, including paying for the full cost of recruitment for each worker.

Where recruitment fees or costs are identified and have been paid by workers in our supply chain, we will work with suppliers to determine appropriate remediation requirements, which may include repayment to workers. Our approach for remediation is outlined in our Ethical Sourcing Policy and Forced/Bonded Labour Remediation Requirements.

We monitor our in-scope suppliers’ audit findings through our Ethical Sourcing Program, including any findings related to recruitment fees. Audits include document reviews and worker interviews to assess whether suppliers have systems in place to support responsible recruitment and whether workers have paid recruitment fees or related costs.

In FY23, ethical audits at several supplier sites in Thailand and Malaysia identified potential concerns relating to recruitment fees. We commissioned independent third-party investigations, to verify and understand these concerns.  The investigations used two different methods:  one involved a number of worker interviews, and engagement with the suppliers’ management, while the other included a worker survey and supplementary worker interviews. These approaches helped us better understand the challenges associated with recruitment fees and engage suppliers on appropriate remediation. For example, one supplier was able to repay workers and close out the recruitment fee finding in their next audit.

To help prevent recruitment fees being charged to workers, we partnered with a specialist consultancy to deliver capability-building webinar with relevant suppliers. This included responsible recruitment standards, Employer Pays Principle, effective management systems, pre-departure training and best practice remediation strategies. You can read more on our work in this area in our Modern Slavery Statements.

Third-party labour hire providers deliver important services to Coles’ suppliers. However, the use of labour hire can also introduce human rights and workplace compliance risks into these supply chains. In Australia, state-based labour hire licensing schemes can assist suppliers to minimise their recruitment and staffing industry risk. Coles has developed Third-Party Labour Hire Provider GuidanceThird-Party Labour Hire Provider Guidance, View PDF, file size 247KB for our suppliers. This guidance provides practical advice on managing labour hire and outlines examples of good and best practice to support continuous improvement.

Labour hire intermediaries may operate at tier three, or below, of our supply chain, which can limit our visibility of the providers involved. In FY22, we introduced labour hire reporting requirements for all in-scope Australian fresh produce suppliers. This includes a questionnaire on the processes suppliers have in place to monitor labour hire providers, as well as details such as business name, business number and labour hire licence number where relevant. We require suppliers to establish monitoring processes under our Ethical Sourcing Program to support oversight of labour hire provider practices. Information collected through the questionnaire has also enabled us to begin mapping labour hire providers used in our extended supply chain and further assess potential human rights risks. To further increase our oversight of labour hire in the fresh produce sector, we plan to collect additional information on labour hire providers used and associated monitoring systems for our sites audited under the Coles funded Third-Party Audit Program.