Who doesn’t like to give or receive a gift, especially around holiday times? It is common practice (even expected practice) in some industries to recognize clients or customers with some sort of gift.
With respect to client/customer gifts, a gift of nominal value can be a lovely token of an ongoing mutually beneficial relationship. There is, however, always a risk that a conflict of interest may arise (or be seen to arise) from the acceptance or giving of gifts that are of more than a nominal value. When gifts exceed nominal values, they may, at minimum, make your client or customer feel some obligation or discomfort, or at worst, be perceived as “bribery” or a kick-back.
Some of the issues employers may want to consider with respect to gifts include:
- Place a limit on the value of the gift that may be given or accepted. Instruct employees to refuse any gift valued at more than the limit set.
- Consider whether such limit includes meals, as business meals with clients or suppliers may be more akin to a working business meeting than a “gift.”
- Consider whether gifts received by employees are personal to them or must be pooled and shared with other employees. If gifts are to be pooled and shared, by what means will they be pooled and shared? Raffles and draws may be appropriate (either to determine an ultimate recipient, or as a fund-raiser for charity) or items may be donated to charity or silent auction for charity, if appropriate.
- How will you treat free product samples from suppliers which may have a value but are usually given for valid business purposes?
- Remember that there are personal tax consequences to employees for financial benefits they derive from their employment. Employers should get advice from their accountants regarding any tax treatment of gifts from the employer or from third parties.
- Employers may wish to have a favourite charity selected and suggest it as an alternative recipient of holiday gifts from suppliers, or may wish to make a donation to the charity in lieu of giving gifts to customers or clients.
- Whatever an employer decides is best, it should communicate its policy with its clients or customers, or suppliers, as the case may be, well in advance of the holidays. Strategic communication of any such policy will manage expectations and prevent embarrassment.
Employers should ensure that it has adequate policies to inform and advise employees of the conduct and behaviour that is expected of them in the context of the industry in which the employer operates. Relevant policies include Conduct and Behaviour, Conflict of Interest, and Gifts, Favours and Entertainment. A full discussion of these policies, together with sample statements of such policies is available in the Human Resources PolicyPro® Alberta, British Columbia, Manitoba & Saskatchewan, Ontario, Quebec and Atlantic Editions.
Human Resources PolicyPro
published by First Reference Inc
Human Resources PolicyPro
With The Human Resources PolicyPro all of the researching, writing, and formatting is done for you! This all-in-one policy-building resource offers not only sample policies but also commentary and related precedents to help you understand each policy in the context of relevant legislative requirements.