Can a Customer Company Reward an Employee of the Service Provider with a Gift Voucher or does tis action violate any corporate policy or laws?
1. The Core Principle
Even a small gift (like a voucher) can raise red flags if it’s given by a customer (the “Principal”) to an employee of the service provider who is in a position to influence decisions, pricing, or contract performance. While a ₹1,000 gift voucher may seem harmless, legally and ethically it can be construed as an 'inducement' or 'gratification' under anti-bribery or anti-corruption frameworks.
2. Legal and Policy Framework
a. Anti-bribery and corruption laws
In India, under the Prevention of Corruption Act, 1988 (as amended), offering or giving any “undue advantage” to another person to influence their conduct in business or performance of public duty can constitute an offence. While this Act primarily targets public officials, many companies voluntarily extend the same standard internally to private-sector dealings through their anti-bribery policies.
Internationally, if either party is a multinational or governed by frameworks like the UK Bribery Act, 2010 or U.S. FCPA, even private-to-private gifts can be prohibited if they could be perceived as infl
b. Corporate Code of Conduct / Supplier Code of Ethics
Most companies’ policies include clauses such as: “Employees shall not accept or offer any gifts, entertainment, or favors that may appear to influence business decisions or create a conflict of interest.”
They often prohibit cash equivalents (including vouchers and gift cards), but may allow token gifts of nominal value (e.g., under ₹500) with prior approval from compliance or HR.
3. Practical Interpretation
Scenario 1 – Without prior disclosure: A gift voucher given directly to a service provider’s employee by the customer company would likely violate both companies’ ethics policies and may be treated as an undue advantage.
Scenario 2 – With transparency and approval: If the service agreement or both companies’ codes permit small gifts and the value is nominal, not linked to business decisions or contract performance, and both organizations’ compliance officers approve or record it, then it may be permissible as a token gesture.
4. Recommended Safe Practice
- Avoid direct gifts to individual employees.
- If appreciation is intended, give it to the organization, not an individual.
- If individual recognition is important, route it formally through the service provider’s HR or management, with full disclosure.
- Keep written documentation of the intent, approval, and value.
In Short
| Aspect | Risk Level | Notes |
|---|---|---|
| Direct voucher to an employee | High | May breach code of conduct / be perceived as inducement |
| Token gift via company with approval | Moderate | Needs disclosure and documentation |
| Organizational appreciation (certificate, thank-you letter) | Low | Best practice |