McDonald’s Restaurants Limited (McDonald’s UK) - Modern Slavery Statement for the 2018 Financial Year

 

At McDonald’s, we take seriously our responsibility to respect and promote human rights and to act with due diligence to avoid infringing on the human rights of others and addressing any impacts on human rights if they occur. We are committed to respecting human rights as set out in the Universal Declaration of Human Rights. Our Human Rights Policy (“Policy”) is also guided by the United Nations Guiding Principles on Business and Human Rights, the International Bill of Human Rights, and the principles set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work. 

We strive to foster safe, inclusive, and respectful workplaces wherever we do business and respect the fundamental rights of McDonald’s employees, which are: freedom from slavery and child labour; freedom to associate (or not associate) and collectively bargain; equal opportunity for everyone; a safe and healthy workplace; and freedom from discrimination and harassment. Where McDonald’s may impact the human rights of particularly vulnerable groups, such as migrant labourers, indigenous peoples, women, or children, we are also guided by other international standards that elaborate on their rights.

McDonald’s Human Rights Policy

Introduction

This statement is published in accordance with the UK Modern Slavery Act. It outlines the approach we take to prevent modern slavery in our business and supply chains associated with the registered operation in the United Kingdom.

McDonald’s Restaurants Limited (“McDonald’s UK” or “Company”) published its first Modern Slavery statement in July 2017. We continue to build our knowledge of the risks of modern slavery and the areas of our business that could face some of these challenges. We work across our business and supply chain to ensure that we have the right practices in place to prevent and respond to any potential risks.

Modern slavery is unacceptable within our business and supply chains. We have a responsibility to respect the rights of people who work for the Company, and to do business with franchisees, suppliers and business partners that respect human rights for their respective employees. We recognise there is no single solution to human rights issues, which is why it is critical that we engage with all of these stakeholders to build awareness and understanding.

Our business, company structure and supply chains

We are proud to have run our business in the UK for 45 years, having opened our first restaurant in Woolwich in 1974. We are a franchised business and today, we and our franchisees operate over 1,280 restaurants in all corners of the UK and employ over 125,000 people. Alongside the restaurants, we have a head office function based across five offices in regions across the country, with our main UK office in East Finchley, London.

Approximately 20% of McDonald’s restaurants in the UK are owned and operated by the Company with around 80% owned and operated by franchisees. From the £1.1 billion we and our franchisees have directly invested in our restaurants since 2014, to the partnerships we collectively hold with national and local groups to support the causes that matter most to local communities, we are passionate about contributing to the areas in which we operate.

As the UK’s largest restaurant company, we know how important it is that our customers trust us to do the right thing by their communities, the environment, and our people. By working across all three elements of our business: the Company, the franchisees, and our supplier partners, we are able to use our scale for good, delivering the positive impact that our customers expect. Our approach to modern slavery and human rights is underpinned by this same commitment.

Our supply chains

We strive to build long-term relationships with our supplier partners, and we are proud that many of our suppliers have worked with us for decades; some have worked with us since we first opened our doors in the UK. These long-term relationships enable us to have open and honest conversations and to share best practice.

By working with our supplier partners, we have been able to continue to meet our priority of serving safe, quality, and sustainably sourced food that our customers can trust. We are therefore very proud of the reputation we have earned as a key supporter of UK agriculture, but are also proud to source items for our menu from trusted suppliers from around the world.

All of the ingredients on our menu are sourced from approved supplier partners who have to adhere to our high quality standards, which are independently audited. Where possible, our supplier partners source ingredients from farms accredited by a recognised farm assurance scheme such as Red Tractor, with regular audits taking place on the farms to ensure that these standards are upheld. In addition, many of our supply chains are vertically integrated, meaning that our supplier partners will often have control and oversight of every step of the production process.

In 2012, McDonald’s UK established Farm Forward, our long-term sustainability programme to support British and Irish farming. Through Farm Forward we aim to help farmers run thriving businesses by investing in programmes and research to develop skills and knowledge, raise standards of animal welfare and make environmental improvements. Through our approach to continuous improvement, we continue to work with our food and farming partners to understand changes in the industry and make sure that our initiatives make a real difference to not only the farmers that supply our menu, but the wider industry too.

Additionally, the McDonald’s Flagship Farmers programme was launched to develop and celebrate a network of farms that demonstrate excellence in the three sustainability areas that underpin a healthy and progressive farm business: economic viability, ethical practices and environmental safeguarding. Under ethical practices, McDonald’s global priority impact areas include human rights.

We know that a large part of the success of the McDonald’s system lies in our trusted relationships with our supplier partners. We expect all suppliers, regardless of the cultural, social and economic context, to meet our expectations of fundamental rights for all people. This means treating their employees with fairness, respect and dignity, and following practices that protect health and safety for the people working in their facilities.

Our global system also provides us the opportunity to use our scale for good across our business and supply chains by sharing knowledge and best practice across borders. It also supports us to raise our awareness of global trends and opportunity areas. Globally, McDonald's is a member of the Sustainable Agriculture Initiative Platform, a body which aims to develop principles and practices for the sustainable production of crops, beef and dairy. By working with a number of organisations through this platform we are focused on continuing to develop our sourcing standards to not only improve animal welfare and the environment but also to safeguard the health and welfare of the people in and around our supply chain.

Our global responsible sourcing strategy focuses on products that carry the greatest sustainability impacts globally and where we have the most potential to create positive change. One of the Priority Impact Areas for the programme is human rights.

Our people

At McDonald’s UK, we are committed to promoting a safe, inclusive, and respectful workplace for all of our people. From our kitchens and dining areas to our head offices, our success would not be possible without the great work of our people, which is why it is so important we respect and invest in them. We believe in developing a culture in which our people are treated with dignity and respect at all times.

Our Gender Pay Report, published in April 2019, showed that our median (middle in a set of figures) pay gap was 0 per cent and our mean (average of a set of figures) pay gap was 4 per cent. This is significantly below the mean national average of 17.1 per cent. These figures are even lower in our restaurants, where both the median pay gap and the mean pay gap is 0 per cent. We are proud of the results, and will continue to push ourselves to ensure that we remain a diverse and fair place to work.

We know that a motivated and engaged team of people in our restaurants is vital when building a great place to work. That is why we are committed to creating an environment of open and honest communication, where everyone has access to the support they may need and the tools they need to have their voices heard.

Another component of a great workplace culture is the ability to speak freely and openly about any concerns or worries, including those relating to ethics and human rights. This includes an anonymous channel, the Business Integrity Line, staffed by a live operator from an independent company 24 hours a day, every day of the year.

Anonymous feedback from our people is an important way of understanding how they feel about coming to work. Our employee survey, Your Viewpoint, is organised every year to better understand the views and concerns of our people. Each restaurant and head office department receives the results of this survey and then develops an action plan to further improve the working environment.

We aim to support our people in speaking freely about their experiences and concerns about their experiences at work. Through our Listening Sessions our people can speak individually or in groups about any issues they may face in the workplace. These sessions follow a process which ensure that any concerns are rectified via an action plan drawn up after the sessions.

Our 24/7 People Services Helpdesk is made up of a team of trained advisers who are on hand to support our people wherever they are in the business. The Helpdesk is able to answer day-to-day questions and escalate any serious issues that are raised.

Additionally, in order to strengthen the support we offer to our people, we recently introduced our Employee Assistance Programme which provides 24/7 access to confidential telephone and on-line guidance and support. This Programme enables our people to contact independent advisers about a range of issues including but not limited to personal finances and mental health.

Policies and due-diligence

We support the goals of the UK Modern Slavery Act and take seriously our responsibility to act with due diligence to avoid infringing on the human rights of others and address any impact on human rights if they occur. We conduct our activities in a manner that respects human rights as set out in the United Nations Declaration of Human Rights, and we are committed to ethical recruitment in our employment practices as a component of our overall human rights approach.

We are committed to ethical recruitment practices. We prohibit direct or indirect fees or costs being charged to those seeking employment with or who are employed by the Company for the services directly related to recruitment for temporary or permanent job placement, unless legally permissible and within the legal limit. This includes where we may use private recruitment services or where we perform recruitment activities directly. Even where such fees or costs are legally permissible and within the legal limit, our policies and practices are designed to ensure that no one is indebted to the Company or to a recruiter in a manner that prohibits the individual from freely leaving their employment.

We do not retain an employee’s identity document such as passports or work permits, as a condition of employment for longer than 24 hours and only do so for legitimate administrative reasons, including for immigration checks. McDonald’s UK provides any agreements, whether oral or in writing, in a language understood by the person agreeing to be employed and expects that any recruiter, labour broker or employment agent will do the same and will be responsible for ensuring that the agreement is understood by the person agreeing to be employed.

We continue to work with external stakeholders to actively review our approach and global policies related to protecting human rights, to give greater transparency and clarity on our commitments and ensure they remain aligned with internationally recognised standards.

Last year, McDonald’s published its new global Human Rights Policy, which reinforces McDonald’s commitment to respect and promote human rights. The Policy was developed with input from expert third parties and is guided by the UN Guiding Principles on Business and Human Rights, the International Bill of Human Rights, and the principles set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work. Where McDonald’s may impact the human rights of particularly vulnerable groups, we are also guided by other international standards that elaborate on their rights. This Policy applies to McDonald’s Corporation and its majority-owned subsidiaries around the world.

Employees may raise human rights issues, or report potential or actual human rights violations through a number of reporting channels, including contacting Human Resources, or the Global Compliance Office. Reports received by the Global Compliance Office of alleged violations of the Standards of Business Conduct or other McDonald’s policies by McDonald’s employees are reviewed and addressed as appropriate.

The introduction of this new Human Rights Policy is part of our continuous effort to assess our practices and improve our approach. The Policy builds on our existing policies, processes and practices, with the aim of strengthening and further demonstrating our commitment to respect human rights.

Our commitment to respect human rights is also set out in our Standards of Business Conduct, which apply to all employees of the Company. We strive to foster safe, inclusive, and respectful workplaces wherever we do business and respect the fundamental rights of McDonald’s employees. Company employees are trained annually on the Standards of Business Conduct and are required to certify their understanding of and commitment to upholding the Standards.

Our Supplier Code of Conduct applies to McDonald's suppliers globally. We launched our first Supplier Code of Conduct in 1993 and have continued to evolve and strengthen it, to reflect updated international human rights standards, consultation with external experts, a human rights gap analysis and dialogue with suppliers. We expect, and provide guidance to assist our suppliers to meet the standards for human rights, workplace environment, business integrity and environmental management contained in the Supplier Code of Conduct. We also expect supplier self-managed excellence in these four areas through the implementation of their own management systems.  

We expect all suppliers and their facilities to meet the standards and promote the principles outlined in the Supplier Code of Conduct. We also expect our suppliers to hold their own supply chain, including subcontractors and third party labour agencies, to the same standards contained in the Supplier Code of Conduct.

The Supplier Code of Conduct is the cornerstone of our global Supplier Workplace Accountability (SWA) programme, which aims to help suppliers understand our expectations, verify compliance with our expectations and work toward continuous improvement. In 2018, we had 4,078 facilities participating in the SWA programme globally, with 79 supplying McDonald’s UK.

Our SWA programme is built on a model of continuous improvement and education. Our SWA programme includes guidance to suppliers on complying with our standards, including our expectation that our suppliers hold their own supply chains to the same high standards. We provide suppliers with training to understand the SWA requirements and how to comply with our standards. Suppliers can also choose to undergo online training to understand the expectations of SWA. Suppliers are required to complete a rigorous self-assessment questionnaire that appraises the supplier’s current practices and management systems. After completing the self-assessment questionnaire, suppliers receive a report indicating areas of opportunity.

Our SWA programme also includes on-site announced and unannounced audits conducted by third-party auditing firms to assess compliance with our Code. We work with a range of third party auditing firms around the world with expert knowledge and local insight, including understanding local languages and cultures. On-site audits are physical inspections of the facility and will include visits to housing and cafeterias for workers. In addition, the monitoring firms also conduct private worker interviews and review facility records and business practices to assess compliance with the Code.

Modern Slavery risks are addressed specifically as part of the audit, including a review of ethical recruitment practices to verify that workers are employed under voluntary conditions and have freedom of movement. This includes verification that workers are not charged illegal fees as a condition of employment, worker contracts are in local language and signed by the worker, and that suppliers do not retain workers’ government-issued identification, passports or work permits.

Effective action

Where a noncompliance is identified, suppliers work with a third party audit firm to complete a corrective and preventative action plan to address this. The plan must provide specific time frames within which corrective action will be taken, root causes analysed, and policies and procedures updated. In addition, the plan must be designed to avoid recurrence of the noncompliance and establish specific accountability. In instances of significant non-compliance, suppliers are subject to a follow-up audit to ensure that the non-compliances have been properly addressed.

McDonald’s SWA programme is designed to support suppliers in meeting our standards. However, there are circumstances under which McDonald's UK will remove a supplier from the supply chain to address instances of significant noncompliance with McDonald's Supplier Code of Conduct.

Fundamental to our Supplier Code of Conduct is also the expectation of ethical employment practices by our suppliers and their supply chain, including subcontractors and third-party labour agencies. Our Code prohibits any form of slave, forced, bonded, indentured, or involuntary prison labour and prohibits suppliers and third-party labour agencies from retaining employees’ government-issued identification, passports or work permits as a condition of employment.

We also expect our suppliers to provide their own internal reporting mechanisms, to ensure their employees have a safe and timely way to report workplace concerns without the fear of retaliation. Our Code indicates that we expect suppliers to create internal grievance mechanisms and programmes for handling reports of workplace grievances, including anonymous reports. Our Supplier Guidance Document provides a step by step best practice process to help suppliers establish an effective grievance mechanism, guided by the UN Guiding Principles on Business and Human Rights. While we require suppliers to provide their workers with their own internal procedures to raise issues, our Business Integrity Line and an email to reach the SWA global management team are open to third parties, including suppliers and their employees, if they are concerned with breaches to our Code. Our Code explicitly states that the suppliers’ reporting programs must protect the worker’s confidentiality and must prohibit retaliation in response to reporting issues.

Understanding and managing risk

An important element of our human rights due diligence approach is understanding global and national human rights risks and using this information to support the SWA programme. We assess the potential human rights risks of our supply chains, including modern slavery risks, through desk-based research, supply chain mapping and audits, and stakeholder engagement.

A key indicator of risk we use is the country of origin where we are sourcing products or raw materials from. For example, we use analyses of country level human rights risks to help inform the audit cycles for our suppliers. Facilities situated in countries that are considered to be at high risk of such practices require more regular on-site audits regardless of the outcome of previous audits.

We have taken steps to better identify and assess human rights risk within our global supply chain. In 2018 we conducted a human rights impact assessment of our key commodity supply chains. Through this, we aim to strengthen our risk management procedures, develop appropriate improvement plans, and increase awareness of these issues within our business and amongst our suppliers.

As beef sustainability is one of our global priorities, we have undertaken human rights assessments on a number of beef farms in the UK and Ireland to better understand the challenges they face in safeguarding the people that work in their businesses.

Identifying emerging issues and partnering to improve standards

To continue to ensure our supplier programme addresses emerging modern slavery and human rights issues and risks, at a global level McDonald’s participates in initiatives such as AIM-PROGRESS, which supports responsible sourcing, and Business for Social Responsibility’s Human Rights Working Group (HRWG), which supports implementation of the UN Guiding Principles on Business and Human Rights in a shared-learning forum.

We also believe that real, systemic change throughout the supply chain requires partnership with industry. That is why we continue our global involvement in the ICTI Care Program for our Happy Meals toys, bringing together industry partners to support a sustainable supply chain for the toy and entertainment industry.

Training on modern slavery and human rights

Our global SWA programme includes an online training platform where suppliers can access materials that provide guidance on preventing modern slavery. Training modules include, Ensuring Eligibility to Work, Protecting the Rights of Migrant Labour, and Implementing Grievance Mechanisms. For example, the Migrant Labour training aims to educate suppliers on the risks related to modern slavery when sourcing migrant labour and some key actions they can take to ensure they are protecting the rights of migrant workers in their facilities.

Looking forward

We know that there is no single solution to the challenges we all face from modern slavery and human trafficking, and we must therefore continue to learn and understand the associated risks and warning signs. Following the launch of our new Human Rights Policy, we will also be supporting our office and Company restaurant managers to access training related to the Policy.

By working across all elements of our business and supply chains we can continue to build our knowledge of these issues and take steps to improve our collective awareness. We will engage these different elements of our organisation, as well as expert third parties, to identify areas for improvement.

Statement approval

The Board of McDonald’s Restaurants Limited approved this statement on 28 June 2019.

Paul Pomroy’s Signature

Paul Pomroy
Chief Executive Officer, McDonald’s UK