The Government has now published its long awaited guidance on the Bribery Act. The legislation has been delayed by the guidance, and will now come into force on 1st July 2011, leaving organisations with 3 months to implement any appropriate policies and procedures.
The Act creates specific offences of ‘offering’ or making a bribe, of ‘requesting’ or ‘accepting’ a bribe and a specific offence for commercial organisations of ‘failing to prevent’ persons acting on their behalf from committing an act of bribery. This corporate offence is not just in relation to the employees of an organisation, but any person acting on its behalf and would therefore include in many cases agency workers and contractors. There is a potential defence available if an organisation can show that it has taken adequate steps to prevent the bribery. The guidance is specifically intended to assist organisations in ensuring that adequate and appropriate steps are taken and refers to 6 specific principles that must be applied. The principles are proportionate procedures, top level commitment, risk assessment, due diligence, communication and training, and monitoring and review.
The commentary surrounding the Bribery Act and the guidance is mainly concerned about the difficulty for organisations to determine what could be considered to be a bribe.
A bribe can be any “inducement or reward for improper exercise of a function in the course of business, employment, on behalf of a body of persons or a public function, by a person who is expected to act in good faith, impartially or is in a position of trust”.
Serious or extreme bribery actions are clearly going to be caught under the Bribery Act. The problems arise with much smaller or low-value actions or expenditure and whether these will constitute a bribe. There is also a lot of concern within the recruitment industry that bribery could include client entertainment, hospitality and certain referral schemes. The guidance does indicate that the Bribery Act is not intended to stop “genuine hospitality or similar business expenditure that is reasonable and proportionate”. Generally the point made is that organisations are to look at the individual facts and circumstances of the action or expenditure.
With reference to referral fees, if we look at for example recruiters offering candidates a reward for referring other candidates to them, this type of reward is unlikely to be seen as a bribe because it is not a reward to induce someone to improperly perform a function. In contrast, other types of referral fees, such as where umbrella companies offer a financial reward to recruitment consultants who refer candidates to them, do seem to have the potential to be caught under the Bribery Act perhaps because of the usual lack of transparency and intention behind the offer of such rewards. There are clearly going to be grey areas and recruiters and umbrella companies will need to apply careful consideration to the offer or receipt of such financial rewards.
The guidance emphasises that the way organisations deal with bribery does not require complex procedures and acknowledges that many organisations face little or no risk of bribery, especially if they only operate in the UK market. In the same breath, it is clear that doing nothing is not an option. Organisations that assess their risk and take action to mitigate those risks proportionately by putting in place policies, monitoring and training in accordance with the 6 principles should be able to rely on a defence to the offence of failing to prevent bribery by showing that adequate procedures are in place. The guidance does give commentary in relation to each principle and also some practical examples are included.
Recruiters may find that the Bribery Act is something that will now be addressed within client contracts and tenders, in particular that questions may be asked and steps required to show what organisations are doing to prevent bribery.
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