Bribery and corruption

• What have "Bribery and Corruption" got to do with honest to goodness marketing?
• When should the "Bribery and Corruption" alarm bells be ringing?
• What is the effect of offering employees incentivise to commit their employers to purchases?
• What are the penalties for bribery and corruption in an incentive marketing context?
• Assuming a bribery situation is rumbled, what happens to the bribe?
• How does bribery affect any resulting purchase contract?
• Is it possible to legally incentives customers' employees?
• How can employers minimise the risk of their employees getting into bribery and corruption difficulties?

What have "Bribery and Corruption" got to do with honest to goodness marketing?

Potentially quite a lot, particularly in a promotional marketing context. The law is contained in a clutch of Victorian statutes and in the common law applicable to employment contracts.

When should the "Bribery and Corruption" alarm bells be ringing?

Whenever an individual employee is offered a personal benefit as an incentive to commit his or her employer to an expense or other obligation e.g. "Office Managers! place an order for more than 10 SNIBBO office diaries and receive a canteen of OBBINS electroplate cutlery with our compliments".

What is the effect of offering employees incentives to commit their employers to purchases?

For the promoter, making the offer can in itself be an offence, particularly where it is directed to employees of public bodies, when corruption is assumed unless the contrary is proved. For the employee, accepting the offer is potentially an offence under the Prevention of Corruption Acts 1891-93. It may also be a breach of the employee's implied duty of good faith, justifying summary dismissal.

What are the penalties for bribery and corruption in an incentive marketing context?

They can be quite stiff. Apart from the likely summary dismissal of the employee concerned, there can be fines and/or terms of imprisonment for both officers of the bribing company and the bribed employee.

Assuming a bribery situation is rumbled, what happens to the bribe?

Any goods, presents, money or other incentives that have come into the hands of the guilty employee belong to the employer even if they were received in bad faith in the first instance. See Reading v Attorney General [1951] PC507 where a sergeant unsuccessfully sued his former employers, the British Army, for the return of thousands of pounds of bribes which he had accepted (and the Army later requisitioned) to persuade him to accompany illicit liquor through customs. The legal analysis was that an implied promise was to be imputed to the sergeant, flowing from his relationship with the Army, that he would account to his master for any monies he might receive by the use of his position as his master's servant. This was no less applicable if the profits arose out of corrupt transactions.

How does bribery affect any resulting purchase contract?

The contract is unenforceable, which means that if the products have been supplied by the time the bribery is found out, the company that has purchased them is allowed to retain them without having any obligation to pay for them.

Is it possible to legally incentivise customers' employees?

Yes it is, by making it clear in the promotional material that no application submitted by an individual employee for any incentives offered will be processed unless it carries the counter-signature of the employee's Managing Director or other Senior Executive Officer confirming that he or she is content for the individual employee apply for the goodies. So far as employees of public bodies are concerned, because of the presumption of corruption that applies, it would be good policy to simply exclude them altogether from incentives of this kind.

How can employers minimise the risk of their employees getting into bribery and corruption difficulties?

They can do this by introducing rules on accepting and giving gifts and incorporating such rules in contracts of employment by reference, perhaps presenting it as the employer's "Corporate Ethics Policy". In the pharmaceutical arena, for instance, sales staff working for such companies are bound by the Association of British Pharmaceutical Industry Code of Conduct. This severely restricts the offering or accepting of gifts and financial inducements to members of the medical profession for promotional marketing purposes other than articles designed as promotional aids which are "inexpensive and relevant to the practice of medicine or pharmacy". Sales staff are also restricted in the kind of entertainment that they are permitted to offer. It must be secondary to the meeting and it should be modest and offered only to members of the medical profession, not spouses or relatives.