In some countries it is almost impossible to do business without becoming embroiled in bribery of some description. A survey of 100 FTSE companies found that many still trade without anti-bribery strategies in place. Although less common in the UK, the potential for bribes can arise in any business; employers should be aware of how to minimise risk, protect employees and maintain ethical business practice.

Bribery can be described as the offering, promising, giving, accepting or soliciting of an advantage as an inducement for an action which is illegal, or a breach of trust. Although we may think of bribery purely in monetary terms it can include anything of advantage such as extravagant hospitality or over generous gifts.

The Bribery Act 2010 should come into force in April 2011, however, with the delay in the publication of the adequate procedures guidance, the date for coming into force of the Act will be similarly delayed. Although concerns have been raised that British businesses could be at a disadvantage against competitors who operate in countries not subject to this legislation, it seems likely that the Act will come into force regardless of political allegiance and commercial concerns.

The Act introduces four offences: bribing another person; requesting, accepting or receiving a bribe; bribing a foreign public official; and failure by a commercial organisation to prevent bribery by a person who provides services to it.

Employers should be particularly aware of the fourth offence of failure to prevent bribery because a commercial organisation would commit an offence if a person associated with it uses bribery to obtain or retain business or gain a business advantage for the organisation. Under the new Act offences can be committed either in the UK or overseas if the bribery is instigated by a British national who is ordinarily resident in the UK, or an employee of an organisation incorporated in the UK, or a Scottish partnership.

In law, the commercial organisation carries full responsibility. It will be deemed to have committed the offence, even though the employee or worker or a person performing services on behalf of the organisation has carried out the bribe. The organisation also commits an offence where one of its senior officers or someone purporting to be a senior officer knew or connived with the person performing the bribe.

The organisation will have a defence only if it can show that it had in place adequate procedures to prevent bribery. Currently, there is no guidance as to what "adequate procedures" means, although the government has indicated that it will issue guidance three months before the new law becomes effective. Employers should, therefore, take a proportionate risk based approach such as implementing anti bribery policies and putting in place procedures for employees to report suspicious activities. It is also recommended that employers perform regular audits to ensure bribery is not taking place, especially in regard to entertaining clients and receiving gifts. Employers should also include making or receiving a bribe in their list of disciplinary offences.

When one considers that, if found guilty, a company could face unlimited fines and directors could be imprisoned for up to ten years, the new law may seem draconian. However, in effect it is only reinforcing an ethical code of conduct which many employers follow already. Sensible procedures and policies will avoid doubt and provide a defence should the worst happen.

For more information on any aspect of employment law, contact Reggie Lloyd at Birkett Long LLP on 01206 217347.