When is a gift just a gift?

It’s coming up to that time of year again, when ‘transition’ is the word of the moment and new experiences beckon on the horizon: the end of the (academic) year. Whether moving up to big school, moving rooms at nursery or simply going away for a summer holiday, this time of year is usually full of goodbyes and, increasingly, ‘goodbye’ or ‘thank you’ gifts.

Settings frequently call us about accepting gifts from parents – primarily at Christmas and the end of term – to see what’s allowed.

Gifts, if given appropriately, are a mark of thanks, friendship or appreciation. They should be given without expectation of anything in return. They may even be given in appreciation of a favour done or to be done in future – though care should be taken that this doesn’t stray into intent to achieve improper influence. Or, in other words, act as a bribe.

The challenge for organisations in designing anti-bribery controls is to know where to draw the line, given the widely varying circumstances in which gifts can be given.

When accepting gifts, organisations and their employees need to bear in mind:

1. When is a gift appropriate or inappropriate?

2. When is a gift a bribe? (i.e. given to influence your decision)

A gift policy – and ensuring all employees and trustees are familiar with said policy – is highly recommended for settings. It should contain information to build understanding of the requirements for disclosing offers and acceptance of gifts and notifying the appropriate person if you suspect that you have been offered a gift with ill intent.

The acceptance of gifts can leave an organisation vulnerable to accusations of unfairness, partiality, or deceit. This can put at risk an organisation’s reputation for ‘doing business ethically’.

The UK Bribery Act (2010) has made the giving and accepting of gifts a real concern for businesses and their employees. It recognises that gifts play an important part in business, thus provides guidance for organisations regarding what’s considered appropriate and what may be construed as a bribe when giving or accepting gifts.

Under Section One of the act, ‘intent to induce improper conduct’ is a test of whether gifts can be interpreted as a bribe. Offers of gifts must be made in ‘good faith’ and are not considered legitimate if the intention behind the offer is to advantage the individual making the offer.

Another test the Act applies is the principle of ‘proportionality’. Gifts are less likely to be construed as a bribe where they are proportionate to the nature of an organisation’s business activities.

A gift policy is highly recommended for settings

Organisations can help prevent their employees giving or accepting inappropriate gifts by providing guidance, usually in the company code of ethics or gifts policy. The code will outline the company’s position on gifts and set out good practice for employees.

A gifts policy needs to be consistent with all other aspects of an organisation’s ethics programme in encouraging exacting standards of honesty and integrity in decision making and behaviour.

A gifts policy typically sets out:

■ clear definitions of what constitutes ‘gift giving’

■ what type of gift can and cannot be given or accepted

■ the financial value of gifts that can be given or accepted without disclosure

■ how and where gifts should be recorded on a register when given or accepted how       employees can refuse gifts without causing offence

■ guidance on for what can and cannot be given or accepted.

There are principles for organisations to consider when developing guidance for employees on giving and accepting gifts. Though no principle alone is sufficient to decide whether the gift is legitimate, each principle can be used to help identify ‘red flags’.

One principle to consider when deciding whether a gift is not a gift is whether there’s an expectation that the relationship will be influenced; if so, this is a bribe, not a gift.

Some organisations adopt a ‘no to all’ gifts approach. Others put a monetary limit on the value of gifts that can be accepted. Gifts offered to an employee above the stated value will usually need approval before it can be accepted.

This can be difficult to judge, so here’s a set of tests that can help guide you:

1. Bona fide - Made for the right reason: if a gift, it should be given clearly as an act of appreciation.

2. No obligation - The activity will not create any obligation or expectation on the recipient.

3. No undue influence - The expenditure will not be seen as intended for, or capable of, achieving undue influence. 

4. Made openly - It will not be performed in secret and be undocumented – if it is, then the purpose becomes questionable.

5. Proportionate - The value and nature of the expenditure is not disproportionate to the occasion.

6. Documented - The expense will be fully documented including purpose, approvals given, and value.

All Alliance members can contact the team at Law-Call for legal advice. You can find their contact details in the members’ area of our website at portal.eyalliance.org.uk.