Key points on whistleblower rights, company obligations and next steps.
Protective Measures for Whistleblowers Are the Focus of the EU Directive
The core feature of this directive is protection for whistleblowers. The essential points are:
- Protection not only exists for employees who report their concerns, but also for job applicants, former employees, supporters of the whistleblower and journalists.
- These persons are protected from dismissal, degradation and other discrimination.
- Protection applies only to reports of wrongdoing relating to EU law, such as tax fraud, money laundering or public procurement offences, product and road safety, environmental protection, public health and consumer and data protection (the EU is encouraging national legislators to extend this to also covering wrongdoing relating to national laws).
- The whistleblower can initially choose whether to report a concern internally within the company or directly to the competent supervisory authority. If nothing happens in response to such a report, or if the whistleblower has reason to believe that it is in the public interest, they can also go directly to the public. They are protected in both cases.
With these safeguards the EU is signaling to whistleblowers that they have nothing to fear while encouraging individuals to report on company infringements.
While the Directive clearly benefits whistleblowers we also believe there are significant benefits for organizations. Most importantly, by ensuring that effective whistleblowing arrangements are in place, employees and other stakeholders are encouraged to raise concerns internally. By doing so, organizations have an opportunity to identify and manage risk at an early stage, helping to avoid or limit financial and reputational damage.
Next Steps & Tips
The Whistleblower Protection Directive entered into force on December 16, 2019. This marks the start of the two-year period during which EU member states must transpose the requirements into their own national legislation. First companies with more than 250 employees must fulfill their obligations and two years later this will also apply to companies with 50 to 250 employees.
Companies are advised not to wait until the last minute and to take action at an early stage
The Whistleblowing Report 2019 shows that many companies have already proactively set up hotlines and received reports that have enabled them to better manage risk within their organizations.
Implement internal whistleblowing systems and set up processes
The freedom of choice aspect for whistleblowers is something companies need to note in particular. If the whistleblower cannot find suitable internal reporting channels, he or she can contact the relevant authority or even go public – the worst outcome for companies. It is therefore essential that suitable internal reporting channels are available and known about within the company. To ensure that employees feel comfortable reporting internally, the channels should be available 24/7, offer anonymity, be available in the relevant languages, have comprehensible explanatory texts and be accompanied by an effective internal communication strategy.