On 25 February 2021, the Danish Ministry of Justice tabled a bill on whistleblower protection with a view to implementing the so-called EU Whistleblower Directive (Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019).
The Directive lays down requirements for the establishment of whistleblower schemes by a wide range of employers, see our newsletter of 4 November 2019.
Bill proposing protective measures for whistleblowers has been submitted for public hearing until 24 March 2021 and is expected to be tabled before the Danish Parliament in April 2021 with a view to implementing it into Danish law on 17 December 2021.
If the Bill is passed in its present form, all public and private employers with a staff of 50 persons or more must establish an internal whistleblower scheme.
Scope of the Act
Apparently, the Act will apply not only to the reporting of non-compliance with specific areas and issues within EU law that are subject to the underlying EU Directive, but also to "other types of serious breaches or other serious matters".
The subject EU legislative acts relate to public tender procedures, financial services, products and markets, the prevention of money laundering and financing of terrorism, etc.
Further to the reporting of non-compliance with EU law, the Act will also – as stated above – apply to "other types of serious breaches or other serious matters". According to the explanatory notes to the Bill, other serious matters include cases of sexual harassment and other serious interpersonal conflicts in the workplace, including serious harassment. Consequently, it will be possible to report serious sexual harassment or other serious harassment taking place in the workplace.
Reporting on the whistleblower's personal employment relationship will generally be outside the scope of the Act unless the whistleblower's report specifically concerns a serious breach of law or another type of serious matter.
It will also be possible to report matters that predate the effective date of the Act, hence reports on matters that occurred prior to 17 December 2021 may, as a general rule, not be dismissed as long as they are within the scope of the Act.
The requirement to establish a whistleblower scheme
On 17 December 2021, when the Act comes into effect, all employers with a staff exceeding 249 employees must make an internal whistleblower scheme available to employees thus enabling the latter to disclose breaches. However, for employers in the private sector with a staff of 50 to 249 persons, the obligation to set up a whistleblower scheme does not commence until 17 December 2023.
An internal whistleblower scheme is to be made available only to the employer's own staff, but the scheme may also be made available to external partners, such as suppliers, volunteers, trainees or former staff.
It must be possible for whistleblowers to raise concerns, reporting either orally or in writing through the whistleblower scheme. The whistleblower scheme or reporting channels must be operated and administered internally by an impartial person or department, that is, a whistleblower unit, designated for that purpose, which includes receiving reports and being in contact with the whistleblower. The employer must also produce written evidence of the establishment as well as the reporting procedure of its scheme.
The Bill proposes the option of outsourcing the whistleblower scheme in full or in part to a third party, such as a law firm, provided such party meets the statutory requirement of impartiality.
As a result of the Bill, the Danish Data Protection Agency will set up an impartial and independent external whistleblower scheme to process breaches as defined above.
The structure of a whistleblower scheme
Pursuant to the Bill, the whistleblower unit must receive reports and be in contact with the whistleblower, which means that the whistleblower must receive acknowledgment of receipt of his or her report within seven days.
Next, the whistleblower unit must carefully follow up on the report and give the whistleblower feedback without delay and within three months of acknowledging receipt of the report.
The whistleblower will thus be entitled to receive information on the contemplated or implemented initiatives caused by his or her report.
Protection of the whistleblower
In so far as the Bill is adopted in its original form, a special duty of confidentiality will apply to the content of the report, including the identity of the whistleblower, and, generally, the whistleblower will not incur any liability for breach of statutory duty of confidentiality.
The Act introduces protection against retaliatory measures taken vis-à-vis whistleblowers, who in good faith of the accuracy of the information given, submit a report.
Retaliatory measures are defined as any form of disadvantageous or unfair treatment of the whistleblower as a result of the reporting.
Sanctions on breaches of the Bill
Should the whistleblower be exposed to retaliatory measures as a consequence of the reporting, the Bill provides that the whistleblower is entitled to compensation, which, according to the explanatory notes to the Bill, must be fixed in accordance with the level of compensation under the Danish Consolidation Act on Equal Treatment of Men and Women as regards Employment and Maternity Leave (ligebehandlingsloven). In the event that an employee is dismissed contrary to applicable rules, the employee may claim re-employment.
It is for the employee to decide whether he or she wants to claim re-employment or whether he or she wants to claim compensation instead.
The intention is also for the rules on reversed burden of proof to be applied. This entails – if a whistleblower has reported his or her concern pursuant to the Bill – the employer being responsible for proving that the detriment suffered by the whistleblower did not constitute a retaliatory measure caused by the reporting.
However, if a whistleblower has knowingly reported wrong or misleading information, or if a person, deliberately or with gross negligence, has breached his or her duty of confidentiality under the Bill, he or she may be punished by fines. The employer may similarly be punished by fines for failure to comply with its legal obligations under the Bill.
Comments by Bech-Bruun
The Bill offers a balancing of protective measures that introduce new fronts in terms of employment law, in particular with regard to the protection of whistleblowers as opposed to the legal certainty for the reported person(s).
For example, the "feedback" feature is quite new in Danish law; that is, the fact that the whistleblower is to receive information on contemplated or implemented initiatives.
It is expected that, while the Bill is subject to public hearing, it will be considered whether such rules make it necessary to amend applicable rules on confidentiality and personal data protection, including the existing rules on the right of access since – as a prevailing general rule – they do not allow the disclosure of employment related sanctions to a whistleblower as a result of his or her reporting.
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. Accordingly, clients may outsource the administration and management of their whistleblower schemes to Bech-Bruun. We will be at the receiving end of the reporting channels and – based on an assessment of the reports filed – our experienced specialists will take whatever steps are necessary.
If you have any queries 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.