UK: Bribery Act 2010 - What It Means For Employers

Last Updated: 4 August 2010
Article by Sarah Ozanne and Amy Bird

The Government recently announced that The Bribery Act will not now come into force until April 2011, rather than later this year.  This gives employers additional time to prepare – which time should be well spent. The Act introduces rigorous new anti-corruption regulations that will affect all employers.  Employers should therefore review their anti-corruption procedures and ensure that precautions are in place to tackle bribery in the workplace.  This will put them in a strong position to defend any allegations of failing to prevent bribery, and avoid the risk of harsh new penalties.

What does the Act do?

The Act introduces four new bribery offences:

  1. Making a bribe - the promise or giving of an advantage with the intention of inducing or rewarding the improper performance of a relevant function or activity. 
  2. Accepting a bribe - the receipt or acceptance of an advantage for the improper performance of a relevant function or activity.
  3. Bribery of a foreign public official where the intention is to influence an individual in their official capacity in order to win or retain business. 
  4. Failing to prevent bribery - a strict liability corporate offence where a commercial organisation fails to prevent bribery by those performing services on its behalf.

How does the Act affect employers?

Employers will be most affected by the new 'corporate offence', which applies to commercial organisations that fail to prevent acts of bribery committed for the benefit of the organisation.  'Commercial organisation' includes businesses and partnerships which are either incorporated in the UK, or which carry on a business, or part of a business, in the UK.

A commercial organisation is guilty of an offence if it fails to prevent an 'associated person' bribing another with the intention of obtaining or retaining an advantage or business for the organisation.  'Associated persons' have been defined widely to include any person who "performs services" for, or on behalf of, the organisation.  This may be an employee, agent or subsidiary, depending on the circumstances.

Apart from the sanctions under the Act employers may also experience an increase in whistleblowing claims, whether genuine or spurious, whilst the legislation is bedding down and individuals are uncertain about how it will apply.

What should employers do?

As many employees may be vulnerable to bribery, employers should, at least, have clear guidelines in place stating that bribery is unacceptable and how allegations of bribery will be dealt with.

There is a defence to the corporate offence if commercial organisations can show that they have 'adequate procedures' in place to prevent bribery. 
What is 'adequate' for employers will vary according to the size, sector and countries in which the organisation operates.  The employment documentation can assist in this defence.  It may be enough for a small organisation to have a clear set of anti-corruption guidelines, but more is likely to be expected from larger organisations.  Other action might include: 

  • Financial controls to reduce the scope of bribery;
  • An anti-corruption code of conduct which is well-publicised internally; 
  • A statement of values; 
  • Appointing an individual within the organisation to be responsible for bribery and corruption issues;
  • Establishing procedures for assessing the risk of corruption in the business;
  • Employment contracts that give express powers to employers where bribery may be an issue (including the right of suspension, requiring staff to assist in investigations and allow access to relevant communications and records), and set out potential disciplinary sanctions (including dismissal);
  • A gifts and hospitality policy to monitor gifts and entertainment; 
  • Whistleblowing procedures to enable employees to report bribery through a confidential channel;
  • Training for those who have to enforce policies, and to employees on expected standards of behaviour.

Which areas are at risk?

Employers should be particularly aware of the need for action in the following areas:

  • Corporate hospitality and promotional expenditure. The potential for hospitality to slide into bribery is widely acknowledged, but the boundary between the two is not always clear.  Corporate hospitality will only amount to bribery if it can be proved that the person offering the hospitality intended the recipient to be influenced to act improperly.  The Government has indicated that the prosecuting authorities would consider whether the hospitality in question was 'excessive or unreasonable'.  
  • Facilitation payments (small payments to public officials designed to ensure the prompt performance of duties) remain illegal under the new Act.  However, some businesses find it difficult to operate competitively without making such payments and we understand that the prosecution policy will focus on proportionality so that a common sense view is taken.

What are the penalties facing employers?

The penalties facing employers under the Act are severe.  Under the corporate offence employers face an unlimited fine (subject to the scale of the initial offence) and organisations could be banned from bidding for EU public contracts. 

Individuals (including employees, managers and directors) could be subject to a maximum penalty of 10 years' imprisonment and / or an unlimited fine if found guilty of the general bribery offences.

The Employment Team at CMS Cameron McKenna can help with reviewing and drafting anti-corruption policies and procedures and appropriate clauses for employment contracts.  We also advise on investigations, whistleblowing claims and disciplinary procedures for misconduct and allegations of bribery.

For further information on corruption issues please visit our Anti-Corruption Zone by clicking here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 02/08/2010.

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