The Bribery Act 2010 — what employers need to know

The Bribery Act 2010 came into force on 1 July 2011. Below is an overview of the implications for employers with guidance on avoiding liability under the Act.

What is the Bribery Act 2010 about?

The Bribery Act 2010 introduces a number of offences, namely

• Active bribery i.e. to offer, promise, or give a bribe.
• Being bribed i.e. to request, agree to receive, or accept a bribe.
• Bribery of a foreign official i.e. to bribe a foreign public official to obtain or keep business or a business advantage.
• Failing to prevent bribery i.e. failure by a commercial organisation to prevent bribery by an associated person for its benefit.

An associated person is a person who “performs services” for or on behalf of the organisation. It could include employees and agents, volunteers, consultants, agency workers and also subsidiary companies.

It is the last of these four offences, an offence under Section 7 of the Act, which this guide concerns itself with.

The Section 7 offence means that an organisation can be liable for an omission, namely failing to prevent bribery. The penalty for an offence under section 7 could be an unlimited fine and the organisation being prohibited from tendering for public contracts. An organisation will have a defence to such a charge if it can show that it has “adequate procedures” in place to prevent bribery.

Government guidance

The Government has provided guidance to assist organisations to put systems in place to prevent bribery. It is important that organisations review the guidance to ensure that its procedures and systems are sufficient to allow it to be able to put argue that “adequate procedures” are in place, should it ever face a Section 7 charge.

The Guidance sets out 6 key principles:

Principle 1 — Proportionate procedures

An organisation’s procedures “should be proportionate to the bribery risk it faces and to the nature, scale, complexity of the commercial organisation’s activities”. The procedures should be “clear, practical, accessible, effectively implemented and enforced”.

Principle 2 — Top level commitment

To ensure that there is a culture of anti-bribery within the organisation, the message needs to come from the top of an organisation and be part of its culture.

Principle 3 — Risk assessment

The nature and extent of the bribery risk an organisation faces should be assessed regularly on an informed basis and be documented.

Principle 4 — Due diligence

An organisation should apply due diligence in terms of those who perform services on its behalf to reduce identified bribery risks.

Principle 5 — Communication (including training)

An organisation should ensure that the policies and procedures are “embedded and understood” throughout the organisation by way of communication (internal and external) and training which is proportionate to the risks.

Principle 6 — Monitoring and review

The procedures need to be monitored and reviewed with the aim of making improvements as and when necessary.

So what should an employer be doing?

Introduction of an anti-bribery policy

An employer should have an anti-bribery policy or procedure, with commitment from the senior members of the organisation. The policy should be clear and easy to understand. Given that associated persons are not limited to employees, the policy should be briefed as part of an induction process or introduction to the organisation for workers, volunteers and independent consultants, as well as employees.

The briefing should also extend to existing employees and an organisation may wish to consider whether it is appropriate to periodically remind employees of the policy. This will serve as a reminder to all individuals working for it of the organisation’s commitment to the principles of anti-bribery.

The Guidance suggests that how this is communicated and the extent of the policy may vary depending on the size of the organisation and the risks. A much larger organisation may have an extensive procedure that is provided in written form to all employees. A small organisation may have a less extensive procedure which all employees have a copy of but that is also explained when provided to the employee. It is sensible for the employer to obtain an acknowledgement that the policy has been received and read or that training has been provided.

Reviewing supporting documentation

In addition to this an employer should review its existing documentation and consider whether additional policies need to be included or amendments need to be made to existing procedures. Areas to consider in particular are the following:

• Does the disciplinary procedure need to be amended to make clear that breach of the policy is a disciplinary offence which may include gross misconduct?
• Does the Whistleblowers policy need to be updated? If there is no policy then consideration should be given to introducing one. Such a policy will enable employees to know where they can raise a concern if they feel that the Bribery Act 2010 is not being complied with and provide some reassurance that it will be dealt with seriously.

• Are specific terms required to be included in some employees’ contracts e.g. sales persons?

• Are there any changes required to the recruitment procedure? For example, do additional background checks need to be made on some or all employees? Does the organisation have in place sufficient systems to be able to demonstrate that recruitment/promotion decisions are made on an objective basis? Does the induction checklist ensure that new employees are briefed on the policy as a matter of course?

• The introduction of a policy on gifts and corporate hospitality. This should set out clear guidelines on when gifts and/or corporate hospitality is and is not acceptable and any limits, procedures or prior approvals that apply. The policy may also direct employees to a particular person who can deal with any queries on bribery. (The Guidance does not prevent corporate hospitality but is must be reasonable, proportionate and in good faith.)

• Is there a clear expenses policy and are expenses regularly reviewed and audited?

Taking appropriate action

Where a suspected breach of the policy arises, whether as a result of a complaint being made or through the organisation’s management of its procedures, the organisation should take appropriate action. This would involve a proper investigation into the issue by persons who are not involved whether as a witness or otherwise, maintaining appropriate confidentiality and keeping appropriate records. Where evidence substantiates a breach of the policy, then the organisation needs to consider the next steps it should take which are likely to be progressing the matter to a disciplinary hearing. You may wish to contact your HR Rely adviser when carrying out such an investigation.