McDonald’s UK Standards of Business Conduct

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.

Introduction

 

New Areas of Focus, 2019  ·     McDonald’s Corporation launched training for Human Rights Policy for all staff.  ·     Held in-person training on human rights for McDonald’s Corporation senior leadership.  ·     McDonald’s Corporation partnered with AIM-Progress to deliver optional training on forced and child labour, wages and working hours, and health and safety for suppliers in Brazil  ·     Expanded stakeholder engagement and solicited key stakeholder feedback on supply chain human rights.

This statement is published in accordance with the UK Modern Slavery Act. It outlines the approach and steps we take to prevent modern slavery in our business and supply chains associated with the registered operation in the United Kingdom. Due to the impact of Coronavirus and pressure on resources, the publication of this statement was delayed by a few days in line with the six month extension granted by the UK Government.

McDonald’s Restaurants Limited (“McDonald’s UK” or “Company” or “we”) published its first Modern Slavery statement in July 2017. We continue to build our knowledge and understanding 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 put 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 own people too. 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, structure and supply chains

 

McDonald’s by the Numbers   UK   ·   1,326 restaurants   ·   125,000+ employees   ·    200 franchisees   Global   ·     38,000 restaurants   ·     100+ countries   ·     17 International Operated Markets   ·     >80 Developmental License Markets

 

Our Business

UK

We are proud to have run our business in the UK for over 45 years, having opened our first restaurant in Woolwich in 1974. We are a franchised business and today, we and our franchisees operate over 1,300 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 10% of McDonald’s restaurants in the UK are owned and operated by the Company with around 90% 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.

Global

McDonald’s Corporation is the world’s leading global foodservice retailer, serving 69 million people every day.  McDonald’s harnesses the power of our franchisees, suppliers and employees working together toward our common goal of serving delicious, feel-good moments for everyone. Franchisees bring the spirit of entrepreneurship and commitment to communities; suppliers are dedicated to highest levels of quality and safety; and McDonald’s Corporation facilitates learning and sharing across more than 38,000 McDonald’s restaurants.

McDonald’s Corp. and McDonald’s UK (together, “McDonald’s”) work across all three elements of our business—the Company, the franchisees, and our supplier partners—to use our scale for good for our communities, the environment and our people. Our approach to modern slavery and ensuring human rights is underpinned by this same commitment.

Our supply chains

McDonald’s has a complex global supply chain and works with supply chain partners, which employ millions of workers in over 105 countries.

Suppliers are a critical component of McDonald’s business. We build long-term relationships with our supplier partners, and are proud that many of them have worked with us for decades. These long-term relationships enable us to have open and honest conversations and to share best practices.

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 own people with fairness, respect and dignity, and following practices that protect the health and safety and employment rights for the people working in their facilities.

By working with our supplier partners, we continue to focus on our priority of serving safe, quality, and sustainably sourced food that our customers can trust.

Specifically in the UK, we are proud to support the UK farming community, who supply us with quality ingredients and we seek to source locally wherever possible.

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 and RSPCA Assured, 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 supply chain.

 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.

Every year as part of our Progressive Young Farmers Programme up to nine university students spend 12 months getting to know every part of our supply chain, usually during their placement year. They follow our products from the farms who supply us, through to our restaurants and get the opportunity to work with a number of different suppliers, farmers and stakeholders around the country. As part of their induction, they receive comprehensive training to prepare them to operate safely in and understand the risks associated with the workplace.

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.

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.

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 committed to providing a diverse and fair place to work. Our 2020 Gender Pay report will be published in due course.

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. Our People Services Helpdesk is also available every day of the year for our people to raise any concerns that they may have in relation to any aspect of their working lives.

Feedback from our people is an important way of understanding how they feel about coming to work. We ask for this feedback anonymously throughout the year through our Love to listen survey. This is conducted four times a year to better understand the views and concerns of our people. Each restaurant and head office department receives the feedback from this survey and then develops an action plan which supports continuous improvement to the working environment.

In addition, our global head office functions are asked for feedback anonymously twice a year through a Global pulse survey in addition to specific department global surveys.

We aim to support our people in speaking freely about their experiences and concerns about their working environment. Through our Love to Listen Meet up Sessions, How’s It Going chats and our “always on” approach to listening, our people can speak individually or in groups about any issues they may face in the workplace. In the example of the Love to Listen Meet up, these feedback sessions follow a process which ensure that any concerns are rectified via an action plan drawn up after the sessions.

Our People Relations team have also introduced “creating a respectful workplace” learning materials which were introduced across the business to support our people first culture. This is a great example of continually looking to build and improve on the listening platforms already in place to encourage our people to speak freely about their experiences.

Policies

McDonald’s UK supports the goals of the UK Modern Slavery Act and we 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.

Employment practices

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 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.

When checking someone’s legal right to work for the Company in line with UK Right to Work procedures set down by the Government, we operate document retention practices which ensure that workers maintain control of their identity documents.  Some of our UK right to work checks in restaurants are carried out by a third party company, which also adheres to the same standards and is also subject to our Supplier Code of Conduct.

McDonald’s UK provides any agreements, whether oral or in writing, in a language understood by the person agreeing to be employed or to work in any capacity for McDonald’s UK, 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. If there are any changes to any agreements, such as due to a change in UK legislation or working practices, these are communicated without unreasonable delay to the individual. Further, in 2019, we revised the employment handbook for our hourly paid employees to be fully digital and modern in its language and tone of voice to make it even more accessible for our people.

Human Rights

In 2018, McDonald’s published a 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, including McDonald’s UK.

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

Employees may raise human rights issues, or report potential or actual human rights issues 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 always reviewed and addressed as appropriate.   Equally, employees can raise concerns on any alleged wrongdoing or illegality via the McDonald’s Whistleblowing Policy.  Concerns can be raised anonymously and in confidence and all such concerns are investigated as appropriate.  

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.

Assessing and Mitigating Risk in our Supply Chain

Supplier Code of Conduct & Supply Workplace Accountability Program

The Supplier Code of Conduct applies to McDonald's suppliers globally. It sets out our expectations for suppliers on critical topics including human rights, workplace environment, business integrity and environmental management. We expect supplier self-managed excellence in these four areas through the implementation of their own management systems. McDonald’s provides a Supplier Guidance Document to assist suppliers in meeting the standards. McDonald’s launched the first Supplier Code of Conduct in 1993 and has evolved and strengthened it over time to reflect updated international human rights standards, consultations with external experts, a human rights gap analysis, and dialogue with suppliers.

McDonald’s expects all suppliers and their facilities to meet the standards and promote the principles outlined in the Code. 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. Fundamental to the Code is the expectation of ethical employment practices by suppliers and their supply chain, including subcontractors and third-party labour agencies. The Code prohibits any form of slave, forced, bonded, indentured, or involuntary prison labour. Suppliers and third-party labour agencies are prohibited from retaining employees’ government-issued identification, passports or work permits as a condition of employment.

The Supplier Code of Conduct is the cornerstone of the global Supplier Workplace Accountability (SWA) program, which aims to help suppliers understand McDonald’s expectations, verify compliance with our expectations and work toward continuous improvement. At the end of 2019, we had over 4,000 facilities participating in the SWA program across 98 countries, with 91 supplying McDonald’s UK. The program audits many different types of facilities and products, such as food, packaging, uniforms and Happy Meal Toys.

The SWA program is built on a model of continuous improvement and education. It 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.

The SWA program also includes on-site announced and unannounced audits conducted by third-party auditing firms to assess compliance with the Code. McDonald’s works with third-party auditing firms that have expert knowledge, local insight and an understanding of local languages and cultures. On-site audits are physical inspections of the facility and include visits to housing and cafeterias for workers. Auditors 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.

Understanding and managing risk

An important element of the global human rights due diligence approach is understanding global and national human rights risks and using this information to support the Supplier Workplace Accountability programme. In addition to the audits described above, McDonald’s assesses the potential human rights risks of our supply chains, including modern slavery risks, using desk-based research, supply chain mapping, and stakeholder engagement.

One key indicator of risk is the country of origin from which products or raw materials are sourced for the McDonald’s system. Country-level human rights risk analyses are used to help inform the audit cycles for suppliers. Facilities situated in countries that are considered to be at high risk require more regular on-site audits, regardless of the outcome of previous audits.  

McDonald’s works hard to continuously improve how we source our ingredients in a way that allows people, animals and the planet to thrive. We want to ensure that our sustainable sourcing programs drive lasting, meaningful outcomes on critical issues for people, animals, the environment and our business. McDonald’s defines sustainable sourcing through what we call the three “E”s—ethical practices, environmental protection and long-term economic viability— and we’ve identified seven priority impact areas to support them. Although our long-term goal is to source all of our food and packaging sustainability, we have focused on six priority products that were identified through independent analysis by the World Wildlife Fund (WWF) as the products that carry the greatest sustainability impacts and where we have the most potential to create positive change. Part of our sustainable sourcing for these six priority products requires our suppliers to purchase sustainably certified products where such certifications exist, several of which audit for social compliance at farm-level.

Effective action

Since the SWA Program began, McDonald’s has provided optional training, and engaged with thousands of suppliers and facilities. Over time, suppliers have taken on increased ownership over compliance processes—there are nine supplier-led compliance and reporting programs—and we have been pleased to see an improvement in compliance overall.

Where a noncompliance is identified through an on-site audit, suppliers work with a third-party audit firm to complete a corrective and preventative action plan to address the noncompliance. 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.

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

In addition to training, auditing, and other aspects of the SWA program, McDonald’s requires that suppliers provide their own internal reporting mechanisms to ensure their people have a confidential, safe, and timely way to report workplace concerns without the fear of retaliation. The Code stipulates that suppliers create internal grievance mechanisms and programmes for handling reports of workplace grievances, including anonymous reports. The 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.

In addition, McDonald's Business Integrity Line and an email address are open to third parties, including suppliers and their people, to raise concerns with breaches of the Supplier Code of Conduct.

Training on modern slavery and human rights

To help employees understand human rights a mandatory training for staff on the Human Rights Policy was released in 2019. Available in 15 languages, the training has a section on forced labour that identifies particularly vulnerable groups and outlines McDonald’s commitments surrounding ethical recruitment. McDonald’s UK staff employees are also trained regularly on the Standards of Business Conduct and are required to annually certify their understanding of and commitment to upholding the Standards. In 2019, McDonald’s Corporation’s senior leadership also received in-person training in partnership with an external human rights consultancy.

Given their important role in working with suppliers, McDonald’s supply chain procurement employees undergo in-person and webinar trainings on supporting suppliers in meeting their expectations under the Supplier Code of Conduct and SWA program. In 2020, McDonald’s is developing a new online training module for procurement employees to enhance their understanding of human rights issues in global supply chains.

For suppliers, the global SWA programme includes an online training platform where they 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.

Partnering to improve standards and identify emerging issues

McDonald’s UK is committed to engaging with stakeholders to continue to advance our approach to human rights.

McDonald’s UK engages with stakeholders in our system in a variety of ways. For example, within the Company, McDonald’s employees provide feedback via multiple reporting mechanisms, including via people managers, human resources and through participation in surveys. Within our supply chain chains, external monitoring firms conduct on-site audits of supplier facilities through the SWA program include on-site interviews.

McDonald’s Corp. seeks feedback from human rights experts and advocates. In 2019, McDonald’s convened a multi-stakeholder roundtable of human rights experts and advocates on the sidelines of the UN Forum on Business and Human Rights. The group included stakeholders from civil society, academia, the public sector, peer companies and international organisations. The group received an update on McDonald’s supply chain human rights activities and provided feedback and advice on how to advance the program.

We believe that real, systemic change throughout the supply chain requires partnership with industry. That’s why McDonald’s joined the ICTI Care Program for Happy Meals toys in 2016, bringing together industry partners to support a sustainable supply chain for the toy and entertainment industry. To ensure our supplier program addresses emerging human rights issues and risks, we also participate in initiatives such as AIM-PROGRESS, a business initiative focused on 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 of more than 40 companies.

Looking forward

We know that there is no single solution to the challenges of modern slavery and human trafficking, and we must therefore continue to learn and understand the associated risks and warning signs. By working across all elements of our business and supply chain, 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

This statement is made pursuant to section 54(1) of the Modern Slavery Act 2015 and constitutes our slavery and human trafficking statement for the financial year ending 31 December 2019.  The Board of McDonald’s Restaurants Limited approved this statement on 7 July 2020.

Paul Pomroy

Chief Executive Officer, McDonald’s UK