Civil Fraud Quarterly Round-Up: Q1 2021
The Bribery Act has been in force for almost a year. So far we have not had as many high profile cases and convictions as widely anticipated, although there are investigations and cases taking place, for example involving co-operation between the authorities in the US and here. Employers, and their directors, senior managers, HR, in-house legal and compliance departments, should not be complacent. A year is not a long time in the grand scheme of things, and complex fraud investigations take time.
For many employment lawyers, there is a suspicion that the Bribery Act is not really within our remit. I would argue that is a misconception. The legal risks for employers under the Bribery Act are extremely serious. They will typically materialise in practice where there is wrongdoing in the form of bribery on the part of employees, agents, consultants and the like, combined with a corporate failure to take all reasonable steps to prevent the bribery. The onus is firmly on employers to maintain adequate procedures designed to prevent bribery by those who perform services for or on behalf of them. If they do not, they face potentially unlimited fines, whilst the individuals at fault risk imprisonment for up to ten years.
Granted, these risks arise under the criminal law. But commercial, well rounded employment lawyers need to be able to advise their clients on the implementation and maintenance of adequate anti-bribery and corruption (“ABC”) procedures. This involves reviewing documents which we are familiar with, and may have drafted, such as HR policies and procedures, as well as contractual documents such as service agreements, employment contracts and consultancy agreements. It is not just the obvious documents that need to be considered, such as the ABC, whistleblowing, disciplinary, gifts, hospitality and expenses policies, but potentially others also: for example, commission and discretionary bonus schemes (to avoid inadvertently encouraging employees to ignore or give insufficient attention to bribery and corruption risks) and equal opportunities policies (an issue that can arise in practice is discrimination complaints by members of certain nationalities or racial groups that they have been racially stereotyped and targeted within an employer’s ABC programme).
Further, one of the key aspects of a successful ABC programme is on-going training. This will often form part of an employer’s general training programme, under the supervision of the HR department, who tend to turn to their employment lawyers as the first port of call when legal queries arise.
Other employment law related issues that can arise in relation to bribery and corruption include:
Nonetheless, it is important to keep a sense of perspective and proportion, which is very much recognised by the Ministry of Justice’s Guidance on procedures that commercial organisations can implement to prevent bribery. Not every employer operates in high risk sectors or countries. I fear the importance of the Bribery Act was overshadowed last year by sensationalist press comment to the effect that all sorts of normal commercial hospitality, entertainment and the like was going to become illegal.
Finally, typically we find that larger employers with substantial resources at their disposal are more keenly aware of the risks in this area, and better able to manage them. SMEs by contrast are at particular risk. Often they will not have easy access to the resources and know-how necessary to protect themselves, and in this respect Transparency International’s Guidance for SMEs is particularly useful.
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