Christmas gifts and hospitality - how to avoid legal issues

One perennial feature of the festive season is the arrival in the office of gifts from customers and clients keen to show their appreciation of services rendered, or from suppliers, eager to ensure that you continue to use them in the New Year. Similarly, invitations to have a drink or meal, paid for by the client or supplier will be filling up the email inboxes as December rolls on.

However, innocent though these gifts may seem, they have the potential to cause problems for the recipient, especially those which are more valuable than simply a branded pen or a single bottle of wine.

In days gone by, gifts were given, accepted and if they influenced a decision to give more business to the sender, no more was said about it. It was “the way things are done”.

Thankfully, things have moved on and businesses are taking the issue of accountability a lot more seriously, particularly as the Bribery Act 2010 updated the law on bribery and made it easier for the Serious Fraud Office to bring prosecutions against organisations for bribery and corruption offences. Under the Act, convictions can result in potentially unlimited fines and individuals who are convicted could receive prison sentences of up to ten years.

A company can face prosecution for failing to prevent bribery but they can use the defence that they had adequate policies and procedures in place to prevent bribery and corruption.

It’s important that those policies are up to date and fit for purpose, and also vital that they are checked and approved by legal experts, to ensure they don’t get shown up as substandard at the point of a court hearing.

So what should a comprehensive policy on gifts, corporate hospitality and bribery look like?

Firstly, it’s important to remember that the policy needs to apply to everyone in the business. Therefore, any rules drawn up to cover this area will need to be clear, communicated to everyone and steps taken to ensure they are understood.

Guidelines on business gifts and hospitality need to show what the business considers to be acceptable behaviour when it comes to the acceptance of such gifts, including the person to whom such offers should be referred if there is any degree of uncertainty about them. A designated person of sufficient seniority with a clear knowledge of the Bribery Act and other regulations surrounding the receipt and giving of gifts should occupy this position.

Additionally, the policy needs to apply in both directions – not just gifts and hospitality from clients and suppliers but gifts to them from the business as well.

The potential disciplinary action for breaches of the gifts and corporate hospitality policy should also be clearly outlined.

Sector-specific rules

Certain industries or sectors have their own specific rules regarding gifts or hospitality, so if your business is in one of these sectors, you will need to ensure that any policy you draft includes these rules as well.

The influence of Christmas

One of the problems with gift giving and acceptance is that the influence of Christmas will distort what is perceived as acceptable – what might be thought of as extravagant at other times of the year will be brushed off or rationalised as “it’s Christmas”. This factor needs to be taken into account, and not just by employees – no employer wants to be branded a Scrooge but this is a risk if they remind staff of the rules at this time of the year. The tone of the approach, as well as its content should be considered in order not to alienate all parties and thereby reduce co-operation.


Although many of us would like to believe that we would never allow receipt of a gift to influence the way we treat the sender, it is not always so simple and clear-cut. Business revolves around relationships between people and the desire to create strong and mutually beneficial relationships can sometimes overpower better judgement. Employees need to ask themselves – honestly – whether their ability to remain impartial would be affected by gifts and/or hospitality. If the answer is yes, then it may be best to remove the problem altogether and advise clients and suppliers that a no-gift policy is in place, or instruct all employees to refuse any offer that could be counted as a gift.

Depending on the relationship between the business and its suppliers/clients, employees may feel awkward about declining gifts or hospitality for fear of how it may be perceived. A section in the policy should include guidance on how gifts can be respectfully declined, and the manager or director to whom queries and issued can be referred. Once clients and/or suppliers are aware of the policy and that it has the backing of senior leadership, problems will likely disappear.

Gifts to employees

A recent survey has shown that for many staff, an appropriate Christmas gift can be a welcome gesture from their employer; in a significantly more flexible employment market, employers may be keen to retain their staff and may decide that one of the ways to show their appreciation is by a generous Christmas gift. Although creative solutions from gifting providers have proliferated in recent years, traditional gifts such as cash bonuses, vouchers and hampers still dominate and these raise issues of their own that employers need to consider. For example, a hamper that contains foods or drink that can’t be consumed by a particular employee on the grounds of religion, medical reasons or dietary requirements could cause problems, and a survey of employees to ascertain this before a decision is made on a hamper and its contents would be a good idea.

When giving gifts to employees at Christmas, or indeed at any other time of the year, but more so during the festive season, employers need to check that there is no implicit agenda involved with the process – for example, favouritism. That will include ensuring that everything is fair and above board and that all employees are treated equally. Not adopting an inclusive approach to the issue may lead to the possibility of claims for discrimination. It is also important to remember that inappropriate gifts, ones that could cause embarrassment or injury to feelings should be avoided, no matter how tempting it is to “have a laugh” or in the cause of “banter”. Too many employers’ tribunal cases have foundered on that particular rock; better safe than sorry, even if it is seen as “killing the festive mood”.