On 7 October 2019, the EU Council of Ministers adopted the Whistleblower Directive (the Directive on the Protection of Persons who Report Breaches of Union Law) imposing, among other things, a duty for employers in the private sector with 50 employees or more to set up a whistleblower scheme. The Whistleblower Directive is based on a bill proposed by the European Commission. The Member States must within two years adopt national rules implementing the Whistleblower Directive.
The object of the new Whistleblower Directive is to strengthen the enforcement of EU legislation within specific areas by, for example, making it mandatory for several legal entities within the private and public sectors to set up whistleblower schemes. In addition, the Whistleblower Directive must enhance the protection of whistleblowers who report violations of specific EU legislation.
Duty to set up a whistleblower scheme
It follows from the Whistleblower Directive that private undertakings with 50 employees or more must set up a whistleblower scheme, enabling employees to report violations subject to the scope of the Whistleblower Directive. However, this minimum number of employees does not apply if a duty to set up a whistleblower scheme follows from special legislation, e.g. financial regulation or anti-money laundering rules.
All public authorities must also as a general rule set up an internal whistleblower scheme. The Member States may, however, in connection with the implementation of the Directive, choose to exempt:
- municipalities with less than 10,000 inhabitants or less than 50 employees; and
- other public authorities with less than 50 employees.
When setting up of the whistleblower scheme, nothing in the Whistleblower Directive prevents the whistleblower scheme from being designed in such a way that external business partners will also be able to report violations.
Internal whistleblower scheme requirements
The Whistleblower Directive also lays down several requirements as to procedure in respect of the internal whistleblower schemes, including that:
- the confidentiality of whistleblower's identity is ensured
- receipt of the report is confirmed vis-à-vis the whistleblower within seven days as from the report
- an impartial person or department is appointed, competent to follow up on any reporting on violations.
As for the reporting procedure itself, the whistleblower scheme must allow the following ways of reporting:
- Written reports and/or
- Oral reports over the telephone or via a voice mail system.
If requested by the whistleblower, a physical meeting must be held with the said person within a reasonable time.
The whistleblower scheme may either be administered internally by a person or department appointed for such purpose or by an external third party.
What may the report relate to?
The Whistleblower Directive lists several areas in which reporting on violations of EU law will be subject to the scope of the Whistleblower Directive. This list includes, among other things, violations of EU legislation on:
- Public tender procedures
- Financial services
- Money laundering prevention
- Environmental protection
- Financing of terrorism
- Product safety
- Consumer and data protection
- Public health
In connection with the implementation of the Whistleblower Directive, the Member States may extend the scope as to what reports may relate to.
Protection against retaliatory measures
The fact that a whistleblower may be exposed to different retaliatory measures may ultimately result in any whistleblower being deterred from filing a report.
Consequently, the Whistleblower Directive imposes a duty on Member States to prohibit any form of retaliatory measures towards whistleblowers, including in particular in the form of:
- Demotion or failure of promotion
- Transfer of tasks, displacements, pay reductions, changed working hours
- Duress, intimidation, harassment or exclusion from the workplace.
In cases commenced by a whistleblower who was, for example, terminated after having filed a report under the whistleblower scheme, a presumption will exist that the termination was caused by the report filed. In such events, it will consequently be up to the employer to prove that the termination was not caused by the report filed.
For a whistleblower to enjoy protection under the Whistleblower Directive, it is, however, a requirement that the person in question had reasonable cause to assume that the information reported was correct at the time of filing the report and that the information was subject to the scope of application of the Whistleblower Directive.
Comments by Bech-Bruun
The Whistleblower Directive lays down minimum standards of protection within the area. When implementing the Directive into Danish law, it will therefore be possible to implement provisions which go beyond the Whistleblower Directive.
In that connection, it cannot be ruled out that at least the provisions on what the report may relate to will be extended to the extent that the Danish whistleblower rules will not only include violations of EU law. Presently, discussions are ongoing between the Danish Ministry of Justice and the Danish labour market parties concerning the implementation of the Whistleblower Directive into Danish law. Bech-Bruun will follow such discussions closely.
Bech-Bruun's administration of whistleblower schemes
Bech-Bruun is highly experienced in setting up and continuously administering whistleblower schemes for private undertakings as well as public authorities, just as we are able to assist in handling the technical aspects of setting up a whistleblower platform.
It is possible – both in and outside the scope of the Whistleblower Directive – to let an external supplier, such as Bech-Bruun, take over the administration of the whistleblower scheme. In such case, Bech-Bruun will receive the reports filed and initiate the required efforts on the basis of an assessment made by our experienced specialists.
If you have any queries as to the Whistleblower Directive, whistleblower schemes or if you are considering setting up a whistleblower scheme, please contact one of our specialists within the field of expertise. You may also get in touch with your usual Bech-Bruun contact.