In July 2021, Ethical Consumer viewed Waterstones’ website for information on how the company managed workers' rights in its supply chain. A ‘Modern Slavery Statement for financial year ending 24 April 2021’ was found.

Supply chain policy (poor)
A strong policy would include the following commitments: no use of forced labour, permission of freedom of association, payment of a living wage, the restriction of working hours to 48 hours plus 12 overtime (without exception), no use of a child labour (under 15 or 14 if ILO exempt), no discrimination by race, sex or for any other reason.
The company attempted to provide policy related to forced labour, but only stated that it operated “zero tolerance to slavery and human trafficking within our business. We expect all those in our supply chains to comply with our values.” The company also stated that its “Suppliers of physical goods are required to comply with our Supplier Manual, which requires information to be submitted for initial supplier set up and due diligence purposes and incorporates our standard terms and conditions of purchase.” Ethical Consumer could not find the Supplier Manual. The company also stated that it expected “suppliers to have suitable anti-slavery and human trafficking policies and processes in place. We also expect, at the very least, the adoption of ‘one up/down’ due diligence”. The company stated that its anti-slavery policy applied to its entire supply chain, but it was unclear whether this extended to other forms of forced labour.
Regarding discrimination, the company reported that “Our Dignity at Work policy demonstrates our ambition for our staff to enjoy a working environment that is free from discrimination”. However this did not appear to apply to its supply chain.
The company failed to provide adequate policy regarding child labour, freedom of association or limits on the working week.
The company did not have a policy on the living wage, and Ethical Consumer viewed an article in the Guardian from 2020 titled “Waterstones defends minimum wage in year of record profits” which detailed that the company does not give even its direct employees a living wage.
Overall, as it met no criteria in this section, its Supply Chain Policy was considered poor.

Stakeholder engagement (poor)
Ethical Consumer deemed it necessary for companies to demonstrate stakeholder engagement, such as through membership of the Ethical Trade Initiative, Fair Labour Association or Social Accountability International. Companies were also expected to engage with Trade Unions, NGOs and/or not-for-profit organisations which could systematically verify the company's labour standards, and for workers to have access to an anonymous complaints system, free of charge and in their own language.
Waterstones did not provide any policies related to stakeholder engagement and therefore the company received a poor score for this section.

Auditing and Reporting (poor)
Ethical Consumer deemed it necessary for companies to have an auditing and reporting system. Results of audits should be publicly reported and quantitatively analysed. The company should have a scheduled and transparent audit plan that applies to their whole supply chain, including some second tier suppliers. The company should also have a staged policy for non-compliance. The costs of the audit should be borne by the company.
The company did not appear to have any of these things and therefore received a poor score under auditing and reporting.

Difficult issues (poor)
Ethical Consumer also deemed it necessary for companies to address other difficult issues in their supply chains. This would include ongoing training for agents, or rewards for suppliers meeting labour standards, or preference for long term suppliers. It would also include acknowledgement of audit fraud and unannounced audits, and measures taken to address the issue of living wages, particularly among outworkers, and illegal freedom of association.
No such information was found and therefore Waterstones received a poor score for its approach to difficult issues.

Overall, as Waterstones received a poor score for supply chain policy and had no information or policies relating to stakeholder engagement, auditing and reporting or an approach to difficult issues it therefore received Ethical Consumer's worst rating for Supply Chain Management and lost a whole mark in this category.

Reference:

Modern Slavery Statement 2021 (10 August 2021)

In September 2021, Ethical Consumer viewed The Guardian website and found an article dated 08 April 2019 titled "Waterstones staff deliver petition for living wage to firm's HQ".

The article stated that "About 1,900 of the company’s 3,100 workers are paid below the real living wage" and that in April 2019 Waterstones staff from across the UK handed over a 9,300-signature petition to the company's managing director, James Daunt. The article brought to attention the unpaid work of some employees, including one story of an employee who "was never compensated for the hours spent organising store events and reading widely to keep her job". The petition was given alongside a self-published book containing employee's testimonies of their endemic financial worries among booksellers at all levels, with some feeling the required expertise to do the job well has gone unrecognised.

The managing director responded in the article that he was aiming for “a progressing pay structure based on a floor of the real living wage”, but that "the chain could not yet afford the estimated £5m cost of raising wages, two years after returning to profit".

Waterstones lost half a mark under Worker's Rights.

Reference:

Petition to Waterstones to pay living wage (April 2019)