EU: Commission proposes law to strengthen whistleblower protection
The proposal presented on April 23 aims to offer protection to whistleblowers who report breaches of European Union law. It obliges companies to implement safe channels for reporting regulatory breaches, illegal practices and other abuses, and will also protect whistleblowers against dismissal, demotion and other forms of retaliation.
Protection for a wide range of EU law breaches. The proposal put forward by the Commission on April 23 seeks to ensure EU-wide protection for blowing the whistle on breaches of EU legislation in the fields of public procurement; financial services, money laundering and terrorist financing; product safety; transport safety; environmental protection; nuclear safety; food and feed safety, animal health and welfare; public health; consumer protection; privacy, data protection and security of network and information systems. It also applies to breaches of EU competition rules, violations and abuse of corporate tax rules and damage to the EU’s financial interests.
Creation of reporting channels within companies. The proposed directive would apply to all state, regional administrations and municipalities with over 10,000 inhabitants, as well as companies with more than 50 employees or with an annual turnover of over €10 million, and all firms operating in the financial services sector. Such entities will be obliged to set up an internal procedure to handle whistleblowers’ reports. At companies, this procedure will need to be subject to a consultation with social partners. Companies will therefore be obliged to establish clear reporting channels, the existence of which must be made clear to workers, ensuring confidentiality. An individual or department must be designated to receive whistleblower reports, with this individual or department obliged to respond and follow-up the report within three months. The company may opt to pass this responsibility on to a third party and the recitals of the draft refer specifically to staff representation bodies.
The company must state under which circumstances a whistleblower report may be referred to an external body. Under the proposals, a whistleblower must be able to transmit information on the abuse or violation in question to competent authorities, through channels that are independent and confidential and when internal channels do not work or could not reasonably be expected to work. Only if the first two tiers of the reporting system do not work (or in particular circumstances that are cited), the whisteblower will also benefit from protection should they decide to divulge information to the public or to the media.
Prevention of retaliation and effective protection. All forms of retaliation are forbidden and should be sanctioned. All company workers are protected, as well as interns, young recruits and managers, but also contractors. Workers at suppliers or subcontractors are also afforded protection under the proposed law. If a whistleblower suffers retaliation, he or she should have access to free advice and adequate remedies, such measures to stop workplace harassment or prevent dismissal. The burden of proof will be reversed in such cases, so that the person or organisation must prove that they are not acting in retaliation against the whistleblower. Whistleblowers will also be protected in judicial proceedings, in particular through an exemption from liability for disclosing the information. To benefit from protection, the whistleblower must have reasonable grounds to believe their claims are well-founded.
The Commission hopes the draft directive can quickly be adopted by the Council of Ministers and the European Parliament.