How the New Bribery Act will Affect Employers
Written by Geoff Newman on 08/07/2010
The update of the law covering acts of bribery will mean the inclusion of new offences that employers will need to prepare for.
The Act, set to come into force later this year (presumably in October), is due to include the new “Corporate offence” under section 7, in which a commercial organisation that fails to prevent its employees from committing bribery could be subject to criminal sanctions including fines. In that, if the employee bribes another person with the intention of obtaining or retaining business for the company, or with the intention of obtaining or retaining an advantage in the company’s business conduct, the company will be liable. This bribery can also be committed either in the UK or overseas.
Bribery in the past has caused companies to face fines exceeding £100 million, and the law governing acts of bribery prior to this new act was pieced together, in some places including law over 100 years old, so the change was not unexpected. It will, however, have a severe impact on the behaviour of companies and employers.
The act does have one defence, in section 7(2), in which businesses can avoid liability. To do so they must be able to demonstrate that they had “adequate procedures” in place to inhibit cases of bribery. So the question then becomes for employers: what constitutes “adequate procedures”?
The government is obliged to issue guidance about what these procedures may be, but as yet nothing has been produced, nor is there any sign of a possible date of release. As such, there are concerns that guidance will be issued too late for some companies to be able to absorb the information, review their policies and make the appropriate changes.
However, a letter in December from Lord Bach, former Parliamentary Under-Secretary of State, included a list of suggestions for what these “adequate procedures” may include:
Employers can still prepare for the implementation of the Act later this year then in spite of the lack of guidance by reviewing their existing procedures, financial controls and decision-making processes, and attempt to fulfill as many of the suggestions above as possible.
The Act will have no effect on the disciplinary process for investigating alleged acts of corruption before sanctions are imposed, and so companies should still follow either their own procedure, or the ACAS code on disciplinary and grievance procedures.