Anti-Corruption Tools

Employment Terms

Organisations are at risk of incurring criminal and/or civil liability for corruption through the actions of their officers and employees. Similarly, officers and employees may, in the course of their employment, be required or encouraged by their employers to engage in corrupt transactions in order to win business or secure greater profit, or may be placed in circumstances where they are confronted with corruption. Involvement in corruption may involve criminal and civil penalty for both the organisation and the individual. It may also result in irreparable damage to the reputation and respective business and employment prospects of the organisation or employee. It is, therefore, important that both organisations and individual officers and employees ensure that they carry out proper enquiries before entering into an employment contract, and that their employment contracts contain terms which will help to protect them from involvement in corruption and mitigate any loss or damage they may suffer as a result of such involvement. The inclusion of such terms in the employment contract will also help both parties focus on the importance of the issue.

The following recommendations relate to any officer or employee who may, in the course of employment, be exposed or vulnerable to corruption.

Prior to entering into an employment contract:

• The potential employer should make enquiries to establish the integrity of the prospective employee, including inquiries relating to any criminal investigation or record, the reputation of previous employers, and suspected corrupt activity in previous employment.
• The potential employee should make enquiries relating to any criminal investigation or conviction, or suspected corrupt activity, involving the potential employer.
  

The employment contract should contain the following provisions:

1. A definition of corruption: This should include bribery, extortion, fraud, deception, collusion, cartels, abuse of power, embezzlement, trading in influence, money-laundering and similar criminal activity.
2. Undertakings from the employee: The employee should provide undertakings that, during the course of employment:
   
   
   1. he/she will take all reasonable steps not to become involved in any corruption;
   2. he/she will comply with the employer's reasonable anti-corruption rules issued from time to time.
3. Undertakings from the employer: The employer should provide undertakings that:
   
   
   1. it will take all reasonable steps not to become involved in any corruption;
   2. it will not require the employee to undertake any corrupt activity on behalf of the employer;
   3. it will operate a procedure for reporting corruption and the employee will have access to the facilities and protections set out in that procedure. [A copy of the procedure to be operated should be attached to the employment contract or otherwise identified.]
   4. it will take all reasonable steps to assist the employee should he/she be the subject of extortion or wrongful prosecution concerning corruption in the course of or as a result of his/her employment.
4. Remuneration: Payment of unreasonably low remuneration can lead to corruption by an employee in order to supplement the low income. Consequently, the contract should provide for payment of a reasonable remuneration to the employee at reasonable and specified intervals.
5. Performance bonuses: Some types of performance bonuses can encourage corruption. For example, a bonus arrangement related to the winning of a contract or to the number or value of contracts placed may encourage an employee to pay bribes to win contracts or to turn a blind eye to corruption in relation to the contracts placed. Consequently, if an employer wishes to provide bonuses or incentives which relate to performance:
   
   
   1. The employer should avoid or deal carefully with arrangements which could encourage the employee to engage in corrupt activities with a view to enhancing a bonus or receiving an incentive;
      
   2. The employer should introduce a factor into the bonus or incentive arrangements which rewards the employee for ethical activity such as avoiding corrupt contracts.
6. Termination: There should be provision for an option to terminate the contract in the following circumstances:
   
   
   1. the employer should have an option to terminate the contract if the employee is convicted of corruption;
   2. the employee should have an option to terminate the contract if the employer is convicted of corruption.
7. Compensation: There should be provision for each of the employer and the employee to be compensated for loss or damage suffered as a result of corruption by the other party.
   
   
   

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Other Resources

If you have published guidance which is relevant to the above recommendations, and if you are willing to provide a link to your website, please send details to GIACC for listing on this page.  Only services and tools which are available free of charge will be listed.

Page updated on 1st May 2008

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