Statutory Guidance - Addressing Fair Work Practices, including the Living Wage, in Procurement
This section will link to the statutory guidance when published. The first piece of statutory guidance is:
Guidance on the Selection of Tenderers and Award of Contracts
Addressing Fair Work Practices, including the Living Wage, in Procurement
The Scottish Government believes that employers whose staff are treated fairly, who are well-rewarded, well-motivated, well-led, have access to appropriate opportunities for training and skills development, and who are a diverse workforce are likely to deliver a higher quality of service. Furthermore, we hold that good relationships between the employer and their workforce contribute to productivity and ultimately sustainable economic growth.
The Statutory Guidance for Addressing Fair Work Practices, including the Living Wage, in Procurement can be found here. This is the first element of a range of statutory guidance that we will deliver under the Procurement Reform (Scotland) 2014 Act.
Public bodies must now consider, before undertaking a procurement exercise, for regulated procurements and EU-regulated procurements (i.e. Routes 2 and 3 of the Procurement Journey) whether it is relevant and proportionate to include a question on fair work practices as part of the competition. Please note, although not covered in the scope of this statutory guidance it is good practice to have regard to fair work practices where relevant to the particular contract and proportionate to do so for Route 1 procurements.
Suppliers to the Scottish public sector, including sub-contractors, should be able to demonstrate they adopt a range of fair work practices for all workers engaged in the delivery of a contract. This would include adopting policies which adhere to relevant employment, equality and health and safety law, human rights standards and adhere to collective agreements.
The Scottish Government has obtained clarification from the European Commission that organisations are unable to make payment of the Living Wage a mandatory requirement, as part of a competitive procurement process, where the Living Wage is greater than any minimum wage set by or in accordance with law (in the UK, this is the National Minimum Wage). It is therefore not possible to reserve any element of the overall tender score specifically to the payment of the Living Wage.
However, whilst this means that it is not possible to mandate payment of the Living Wage as part of a procurement process, we can encourage public bodies to promote the Living Wage for those who work on public contracts. The guidance makes clear that the Scottish Government considers payment of the Living Wage to be a significant indicator of an employer’s commitment to fair work practices and that the payment of the Living Wage is one of the clearest ways that an employer can demonstrate that it takes a positive approach to its workforce.
The guidance emphasises that whilst failure to pay the Living Wage would be a strong negative indicator it does not mean that the employer’s approach automatically fails to meet fair work standards.
It is important to carefully consider the fair work policies and working practices implemented, as they must be relevant and proportionate to the contract, based on the nature, scope, size and place of the performance of the contract. Organisations must treat all contract bids equally, recognising that fair work practices may be delivered in a variety of ways.