The Bribery Act 2010 at Christmas

The Bribery Act 2010 (“the Bribery Act”) became UK law on 1 July 2011. The Act contains two general offences of the giving/promising of a bribe and the receiving/requesting of a bribe (sections 1 and 2 respectively); and two further commercial offences of bribery of a foreign public official and failing to prevent bribery on behalf of a commercial organisation (sections 7 and 6 respectively). A business will be liable under section 7 if one of its employees or agents commits bribery on its behalf, even if it has no knowledge of the conduct.

In the upcoming festive season many businesses will be giving and receiving gifts and hospitality to and from clients and suppliers. In the absence of careful consideration, this could trigger an offence under either section 1 or 2 of the Act for the individuals concerned, and also under section 7 for the employer (or the business of which the individual is an ‘associated person’ – eg. in agency scenarios). The penalties are potentially huge, including unlimited fines and 10 year prison sentences.

In light of the above, Royal Mail have recently issued guidance to its workers proscribing £30 as the maximum value allowed to be accepted as Christmas tips by post workers. This poses the question – when can a Christmas gift constitute bribery?

Guidance issued by the Government highlights the importance of proportionality when giving and receiving corporate hospitality and gifts. The offence of bribing another person, or receiving a bribe, is such where the giving of the ‘gift’ is intended to bring about the improper performance of a relevant function of the receiver. ‘Improper performance’ means performance which breaches an expectation that the receiver will act in good faith and impartially. The test is what a reasonable person would expect in relation to the performance of that function or activity. Any gift should be proportionate in the circumstances; for example giving an extravagant gift to a new contact just before submitting a tender to their business would likely be inappropriate, however giving a bottle of wine to a long-standing business contact is highly unlikely to constitute bribery.

When assessing gifts where bribery is alleged the authorities would look at the value, the way in which it was provided and the level of influence that the receiver of the gift has on the business decision in question.

Therefore it is unlikely that the usual small token gifts often exchanged by businesses at Christmas would trigger an offence under the Bribery Act, although, if an individual or a business feels it necessary to hide or cover up the giving of any gift or hospitality then this would infer questionable status of the gift.

Some guidance for businesses when taking part in the giving and receiving of Christmas gifts in particular may be:

• Ensure transparency in procedures relating to the giving and receiving of gifts and make these clear to all staff and agents.
• Keep a record of gifts given and received to promote transparency.
• Make it clear that any gifts or hospitality should reflect the desire to cement good relations or improve the business image and NOT give the impression to the recipient that they are under any obligation to confer any business advantage.
• Ensure that any gift is appropriate in all the circumstances. Consider the ‘reasonable person’ test.

Where the commercial offence under section 7 is concerned, there is a full defence under the Bribery Act if the business in question had ‘adequate procedures’ in place to prevent bribery. Adequate procedures will be procedures that are proportionate to the business in the circumstances, taking into account the risk of bribery in that particular business or industry. It is therefore important for businesses to ensure that they have formally assessed the risk of bribery and put in place sufficient clear and transparent procedures, and of course ensured that these are communicated to all staff and agents (as Royal Mail have done).

Notably, no prosecution can be made under the Bribery Act in England and Wales unless either the Director of Public Prosecutions or the Director of the Serious Fraud Office is personally satisfied that the prosecution would be in the public’s interest and that a conviction would be more likely than not. The Bribery Act is not intended to prohibit reasonable hospitality and gifts and it is unlikely that a business or individual would unwittingly be caught out.

Stephanie Round
Paralegal
SRound@LawBlacks.com

Changes to Council Tax?

On 31 October 2011, the Department for Communities and Local Government (DCLG) published a consultation document on reforms of the current council tax system. The consultation is seeking views on:

• Extending the discretion over second homes discount. This would allow authorities the power to charge full council tax on second homes.
• Abolishing council tax exemption for  vacant dwellings
• Allowing authorities to charge an “empty homes premium” for properties that have been empty for two years or more, to encourage the properties to be brought back into use.
• Making it a default position that council tax payment by instalments should be over 12 months, rather than ten as is currently the case.
• Changing the existing legislation so that properties that have solar panels installed will be unable to take advantages of business rates. This is to avoid any tax complications associated with schemes where third-party providers take possession of roofs of properties and install solar panels at their own cost, with residents taking advantage of the free electricity generated (known as “rent-a-roof” schemes).

The consultation closes on 29 December 2011 and responses should be e-mailed to: counciltax.consultations@communities.gsi.gov.uk.

Whilst this is just a consultation we would expect the majority of these proposals to be implemented by April 2012.

 

Glen Salt
Partner
GSalt@LawBlacks.com

Stamp Duty Land Tax (SDLT) exemption

On 25th March 2012 first time buyers will no longer benefit from the Stamp Duty Land Tax (SDLT) exemption whereby, provided both buyers have never owned a property before, no SDLT is payable up to the property value of £250,000.

Unless the coalition makes any interim changes, after 24th March, first time buyers will pay the same SDLT on their property purchases as other buyers, namely, 1% between £125,000 and £250,000.

HMRC provisions states that in order to benefit from the exemption, the buyer(s) must:

• intend to live in the property as their only or main home
• not have previously owned property or land either in the UK or anywhere else in the world – including property bought with anyone else

As many property transactions take several weeks to reach completion (handover of keys), for prospective buyers to benefit from the current exemption, they will need to instruct their solicitors (after having found a property of course!) as soon as possible. If any first-, second- or multi-time buyers have any questions about the ins and outs of property purchases or SDLT, please do contact any member of our residential conveyancing team.

Johanna Robinson
Solicitor
Residential Conveyancing
JRobinson@LawBlacks.com

New Child Maintenance Proposals Published

The government hopes that most separated couples will in future be able to agree child maintenance directly between them but there will always be cases when that is not possible. Proposals for the new statutory child maintenance scheme have therefore just been published which attempt to address failings with the current system.

The new scheme is intended as a fall-back option for parents who cannot agree and is intended to be quicker in terms of making assessments, fairer to parents and less costly to operate to the tax payer. It will also include measures which make assessments less reliant upon what non-resident parents disclose about their incomes as payments will be assessed on their latest tax year income, with that information provided directly by HMRC. It is hoped that this will speed up the assessment process and avoid delays associated with non-resident parents providing information about their income.

Unlike the previous scheme the level of maintenance payments will be reviewed every year to ensure that they remain fair and correct. Likewise parents who share the care of their children exactly equally will no longer be required to pay maintenance to the other. At the present time the parent not in receipt of the child benefits is still expected to pay something, albeit a significantly reduced amount.

Finally, there will be an on-line service which will enable parents using the scheme to see a detailed history of their case, to check the progress of their application and to make payments.

We feel that the new proposals will help address the inherent problems with the existing system but only time will tell if these measures will be regarded as a success. Many separated parents however have little faith in the existing scheme and will welcome the government’s efforts to improve the system.

Paul Lancaster
Partner
Family Law Department
Email: PLancaster@LawBlacks.com

2012: A Vintage Year for Employment Law?

The legislative weather forecast for 2012 augers well for a vintage harvest!

Successive governments, including the current coalition government, have promised to ease the burden of changes in employment law by minimising the number of changes and by making legislative changes only twice a year.  However, Vince Cable’s latest speech on the subject, and the accompanying BIS press release, points to a bumper harvest for 2012.  Vince Cable will no doubt justify this by claiming that it’s all good news for employers.  Will the reality match the hype?

At Blacks, we have spotted at least 12 legislative or procedural changes proposed for 2012 which will either definitely be introduced, or may be introduced depending upon the outcome of consultation with interested parties.  The proposed changes which have grabbed the headlines are as follows:

• Though this change has already been trailed in earlier speeches by David Cameron, there will be definitely be an increase to two years (104 weeks) in the qualifying period for unfair dismissal.  Employers with a few grey hairs will remember that we have been here before.  It seems the idea is to reduce (or, at least, postpone) the risk of an unfair dismissal claim and so persuade employers, in these recessionary times, to take on more employees and slow the inexorable increase in unemployment.  The tactic may well work and will, no doubt, be welcomed by most employers.  However, compared with the time when 104 weeks last represented the qualifying period for unfair dismissal, employees now have significantly more rights which are not dependent upon any qualifying period at all.  So it seems likely that the restriction in the opportunity to make an unfair dismissal claim will prompt some employees to be rather more inventive in seeking to raise those claims (notably, discrimination-based) for which there is no qualifying period at all.
• It seems that Tribunal claims will have to go to mediation with ACAS either before they are issued or, at least, before they are listed for hearing.  The aim is laudable to the extent that it offers parties some saving in costs – though not, we forecast, as much as Vince Cable might have us believe.  The practice difficulty is that ACAS is already over-stretched in its current conciliation role.  Unless the government is prepared to commit the necessary resources, compulsory mediation seems likely only to delay claims whilst the parties wait for an ACAS mediation officer to become available.
• There have been a number of cases recently where employers have misunderstood the “without prejudice” rule and have presented startled employees with draft compromise agreements marked “without prejudice” – under the misapprehension that the employee cannot refer to either the draft agreement or the conversation with the employer in any subsequent Employment Tribunal proceedings.  The practical problem is that a discussion is only privileged from later disclosure (in other words “without prejudice”) if it constitutes a genuine attempt to compromise a dispute.  If the first inkling which an employee has about his departure comes when a draft compromise agreement is dropped on the table in front of him, then, plainly, there was no dispute (before that moment) in respect of which the draft compromise agreement could claim privilege.  The gist of the latest announcement is that, in practical terms, an employer will be able to initiate a conversation with an employee either about performance or, indeed, that employee’s dismissal, on the basis that it is a “protected conversation” – even where there was no pre-existing dispute between the employer and the employee.  In the past, some employers have successfully kept discussions away from the Employment Tribunal by agreeing with the employee that they should be held “off the record”, but the formalisation of this procedure under the label “protected conversation” is probably only a good thing.  However, it has already been made clear that the protection which is to be offered to these discussions will not cover discriminatory acts.  In other words, the change in the law will not protect the employer who is determined to make remarks which, under current legislation, would be discriminatory on the grounds of, for example, sex, race, disability and so on.
• Currently, where an employer proposes to dismiss 20 or more employees or 100 or more employees then, before those redundancies are implemented, the employer must consult for, respectively, 30 days or 90 days.  The government proposes to consult on reducing the 90 days period to 60, 45, or even 30 days.
• There are circumstances in which a party to Employment Tribunal proceedings can be ordered to pay costs (usually for bad behaviour) or a claimant with a weak case can be required to pay a deposit as a condition of being allowed to proceed.  Few orders for costs are made and deposits are rarely required.  The outgoing President of the Employment Appeal Tribunal, Underhill J, is to carry out a review of the current rules – presumably with a view to increasing the frequency with which costs are awarded and deposits are ordered to be made.
• In an Employment Tribunal the Employment Judge (a qualified lawyer) will be accompanied by two lay members, one a representative of business and one (usually) a current or former trade union officer.  Depending on your political viewpoint, the composition of this “industrial jury” will lead to:
• balance bias, or a hung jury
• There may be a modicum of justification in each of these three views.  However, it is a fact that where cases overrun and additional hearing dates need to allocated the challenge of matching the diaries of the three Tribunal members with those of the lawyers and the witnesses is likely to introduce depressing periods of delay.  The proposal, therefore, is that unfair dismissal cases may well be heard by an Employment Judge sitting alone.  Employment lawyers with very long memories will recall that modern employment legislation introduced in the late ‘60s has always been linked with the “industrial jury” and the aim of resolving employment disputes in a (relatively) informal, non-legalistic, way.  Certainly, Tribunals have become increasingly legalistic, and at the same time their administration has moved from the business wing of the government to the Ministry of Justice, the home of “conventional” courts.  If lay members disappear from Employment Tribunals will they become courts by any other name?

2012 will be another busy year for employment lawyers.

Richard Parr
Partner  -  Employment Department
RParr@LawBlacks.com