At the end of February 2021, the Danish Ministry of Justice introduced a bill on the protection of whistleblowers. Today, the bill was enacted. This means that several public and private undertakings with 50 or more employees shortly will be obliged to set up an internal whistleblower scheme.
The enacted bill implements the so-called whistleblower directive (Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019), which dictates undertakings to protect persons who report breaches of EU law. In addition to breaches of EU law, the Act also applies to reports that otherwise pertain to "serious violations of the law or other serious offences". We commented on this in our newsletter of 26 February 2021, click here for newsletter.
As for undertakings in the private sector having more than 249 employees, the rules will enter into force on 17 December 2021, whereas the effective date for undertakings having 50-249 employees is 17 December 2023.
As for public authorities, the Act will enter into force on 17 December 2021.
The enacted bill as compared to the previous draft
The enacted bill corresponds to the bill that was put out to consultation at the end of February; however, including an innovative feature in the form of a provision enabling that "shared" whistleblower schemes may be set up, also by undertakings with more than 250 employees. In addition, shareholders have been included in the list of persons who may obtain protection as whistleblowers against retaliatory measures, and the concept of feedback laid down in s. 3 of the Act has been adjusted. It has furthermore been emphasised that the whistleblower schemes must also ensure confidentiality as to the identity of the person(s) whose name(s) may potentially be mentioned in any report.
The enacted bill also includes provisions stating that, in addition to the Danish Data Protection Agency, the police and the Danish Defence Intelligence Service must set up an autonomous and independent whistleblower scheme. Last but not least, statutory basis has been provided to the effect that also legal entities may incur criminal liability under the law.
Setting up an internal whistleblower scheme
Upon enactment of the bill, employers with 50 or more employees will now become subject to an obligation to set up an internal whistleblower scheme. Such a whistleblower scheme must make it possible for whistleblowers to make reportings either orally or in writing. Under the Act, the requirement is only that the scheme must apply to the employer's employees, but the undertakings may opt to extend the whistleblower scheme to also include external persons making reportings.
Shared whistleblower schemes may be set up irrespective of the size of the undertakings. It appears from the travaux preparatoires that it is recognised that this is probably not in accordance with the Directive, and statutory authority has thus been incorporated into the Act for the Danish Minister for Justice to suspend the provision if upon expiry of the implementation deadline (in this case, on 17 December 2021) it becomes evident that the scheme is contrary to the Directive.
The employer must appoint an impartial person or department (a so-called whistleblower unit) to administer the whistleblower scheme, which includes receiving reports and being in contact with the whistleblower. It will, however, be possible to outsource the whistleblower unit in whole or in part to a third party, such as a law firm, provided that such third party complies with the requirement of impartiality.
Employers must in a clear and easily accessible manner make information on the procedure for making reportings available to their employees. Any kind of retaliatory measures against a whistleblower, who makes reportings in good faith will be prohibited.
External whistleblower schemes
External whistleblower units will be set up under the auspices of, for instance, the Danish Data Protection Agency. Whistleblowers may opt to contact such units directly instead of using the internal scheme.
Matters to be reported
Breaches within specific areas of EU law and other serious violations of the law as well as other serious offences may be reported.
The subject EU legislative acts relate to public tender procedures, financial services, products and the prevention of money laundering and financing of terrorism, etc.
As for other serious offences, reference is made in the explanatory notes to, for example, serious sexual offences or other serious harassment, including harassment due to race, political or religious beliefs, taking place in the workplace.
Reportings on the whistleblower's personal employment relationship will generally fall outside the scope of the Act, unless the whistleblower's report concerns a serious breach of law or another type of serious matter.
Contents of the whistleblower scheme
The task of the whistleblower unit is to keep contact with the whistleblower, including confirmation of receipt of the reporting within seven days, and to ensure that the whistleblower receives feedback as soon as possible and no later than three months after confirmation of receipt of the report.
The whistleblower has a right to receive information on any follow-up action on the report and on the reasons for such follow-up action to which the report gives rise. This differs from the previous draft bill in which the whistleblower had a right to receive information on any contemplated measures or any measures taken.
It follows from the explanatory notes to the bill that such feedback to the whistleblower must be given subject to observance of any other applicable law, including in particular the Danish Public Administration Act (forvaltningsloven) and the Danish Data Protection Act (databeskyttelsesloven).
Sanctions on breaches
The penal provisions of the enacted bill have not been changed as compared to the bill that was put out to consultation. Any whistleblower met by retaliatory measures as a consequence of a reporting is consequently entitled to compensation or, in the event that the employee has been terminated, to be reinstated if the employee so wishes. Any reinstatement may, however, not be demanded if, based on a specific deliberation, it is obviously unfair to demand that the employment be maintained or restored.
If a whistleblower proves to have made a reporting and suffered damage, the other party is the one to prove that the retaliatory measures were not a consequence of the reporting.
As a new feature of the enacted bill, also legal entities may incur criminal liability according to the rules laid down in Part 5 of the Danish Penal Code (straffeloven) if the legal obligations under the law are not observed.
Effective date of the Act
The deadline within which employers having more than 249 employees must set up an internal whistleblower scheme is, as mentioned, 17 December 2021. As for medium-sized undertakings with 50-249 employees, the deadline within which an internal whistleblower scheme must be set up is, however, postponed to the effect that the obligation will not come into force until on 17 December 2023.
Administration of whistleblower schemes by Bech-Bruun
At Bech-Bruun, we are highly experienced in setting up and 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 thus possible to leave the administration of the whistleblower scheme to Bech-Bruun, who will then receive reportings and take the necessary steps on the basis of an assessment made by our skilled experts.
If you have any questions or want to learn more about our whistleblower scheme, Safe2Whistle, please contact one of our designated specialists. You may also get in touch with your usual Bech-Bruun contact.