The Bribery Act 2010

What Employers Should Know

On 1 July 2011, the Bribery Act 2010 will come into force creating four offences, that of:

1. Bribing another person
2. Being bribed
3. Bribing a foreign public official
4. Failing to prevent bribery

Both individuals and corporate entities can be held liable for offences 1-3. Offence 4 is a “corporate” offence, triggered where “a person associated with the corporate entity is/would be guilty of [either offence 1 or 3] and the bribery was carried out for the benefit of the corporate entity”. Business operators should note that there is a complete defence to offence 4 that of having “adequate procedures” in place to prevent bribery taking place. Business should immediately review existing policies and procedures to ensure that they can avail themselves of this defence.

Breaches of the Act could result in a jail term of up to 10 years and/or an unlimited fine in respect of individuals. For businesses, the penalties are no less severe, with the prospect of unlimited fines as well as the organisation being prevented from tendering for public contracts.

The “adequate procedures” defence

The following should be noted:

• Only once you have established the potential bribery risks facing your organisation will you be able to identify what policies are needed (the third principle – risk assessment), but they may include:
(i) The acceptance of gifts from clients/business partners
(ii) Corporate hospitality
(iii) Dealings in foreign territories

If you already have some or all of these policies, now is a good time to ensure they will cover the bribery offences.

• Your policies should address the following topics:
(i) Your organisation’s commitment to preventing bribery and how you are going to achieve that aim;
(ii) The procedures to be followed during business transactions;
(iii) How senior management will be involved in the prevention of bribery and corruption and their commitment to the ambition;
(iv) Rules for the giving and receiving of gifts.

• It is not enough to simply have anti corruption and anti-bribery policies; procedures must be put in place to implement policies – how are you going to ensure your staff know about your procedures?

• Other employment policies/documents that you should review include:
(i) Contracts of employment - you may wish to introduce a clause requiring employees to comply with the organisation’s anti-corruption and bribery policies;
(ii) Whistle blowing policy - does this cover the bribery offences?
(iii) Disciplinary procedures - you should ensure they include the bribery offences;
(iv) Expenses policy – you may wish to update your expenses policy to require the submission of further evidence in support of a claim.

As with all employment policies, your anti-bribery and corruption policies should be kept under review. This should be the responsibility of a member of senior management, but, as an organisation, you should decide how often the policies will be reviewed and what key events would trigger an earlier review.

The onus is on the organisation relying on the defence to prove that its processes were adequate to prevent bribery.

You should also consider your trading agreements with customers and suppliers to ensure that appropriate safeguards are put in place regarding the relationship particularly whether the nature of the relationship (for example, due to the territorial scope or the sector) makes it susceptible to corruption.

If you require assistance in drafting and/or reviewing your policies please contact Sally Bird, Head of Employment or one of our employment solicitors on 0161 832 3434.

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