With the EU Whistleblowing Directive the topic of whistleblowing is becoming important for companies. This article contains everything you need to know.
With the EU Whistleblowing Directive the topic of whistleblowing is becoming increasingly important for companies. Companies across the EU are being required to provide whistleblowing channels and protections for whistleblowers are increasing. Within this context, we go through everything companies need to know.
What is Whistleblowing?
Whistleblowing is when an individual reports wrongdoing in an organisation, for example financial misconduct or discrimination. This person is often an employee but can also be a third-party such as a supplier or customer.
Internal whistleblowing is when someone makes a report within an organisation. Often companies implement whistleblowing channels for this purpose so that employees and other stakeholders can speak up if they become aware of misconduct. Employees can also report to their line manager.
External whistleblowing is when a person blows the whistle publicly, either to the media, police or via social media channels. People often opt to blow the whistle publicly if they have little faith in their organisation’s investigation or reporting procedure, have tried speaking up internally with no result or if there is no whistleblowing system in place.
Whistleblowing complaints focus on conduct prohibited by a specific law such as a criminal offence, discrimination or evidence of a cover up. Speak up policies may however cover a broader range of issues related to compliance and ethics.
Whistleblowing is different to raising a workplace grievance. A grievance is a matter of personal interest and does not impact on the wider public, whereas a whistleblowing report relates to more serious and widespread concerns as outlined above.
Why is Whistleblowing Currently a Hot Topic?
Several recent scandals and events have raised the profile of whistleblowing. The global financial crisis 2007-2008 revealed widespread corporate mismanagementin financial institutions and the Volkswagen Dieselgate scandal in 2015 saw the car manufacturer illegally cheating emissions tests in the USA. Both of these events cost corporations billions of dollars and are viewed as exactly the kind of events that effective internal whistleblowing policies and channelsmight have helped prevent.
Whistleblowers more prominent in 2017 when the #metoo movement saw Hollywood stars blowing the whistle on the widespread sexual-abuse allegations against Harvey Weinstein. This movement also supposedly led to an increase in companies putting stronger safeguards and structures in place for staff seeking to flag illegal or concerning behaviour.
The EU introduced the Whistleblowing Directive in 2019 as a response to more recent scandals such as Luxleaks, Panama Papers and Cambridge Analytica. Once EU countries implement the directive, all companies with more than 50 employees will be required to establish a whistleblowing policy and system and legal protection is afforded to those individuals seeking to expose wrongdoing.
When can Whistleblowers be Prosecuted?
The issue of whistleblowers exposing wrongdoing publicly has started a debate about the need for government secrecy versus the public’s right to know. The US Espionage Act, for example, has been usedseveral times to charge federal employees for leaking sensitive information. In summary, whistleblowing can often be illegal if the exposed information threatens national security.
Why is Whistleblowing Currently in the News?
In June 2020, Watson.ch reported that in Switzerland the government whistleblowing reporting office, located at the Swiss Federal Audit Office (SFAO), is seeing increasing numbers of reports year-on-year. Interestingly the majority of these reports this year came from outsiders such as suppliers, contractors or subsidy recipients rather than employees. 148 reports were anonymous, which makes up almost 80 percent of cases.
In October 2020, the UK Financial Conduct Authority reported a 61% jump in the number of complaints about the whistleblowing procedures at financial services companies. This rise has been attributed to greater awareness of whistleblowing protection and procedures and employees finding harder to find out how to access their companies’ internal whistleblowing channels during the COVID-19 pandemic.
Whistleblowing has also become an important subject in times of Corona. The Süddeutsche Zeitung that Stephan Kohn, an employee in the German Federal Ministry of the Interior, had publicly labelled the Government’s Corona measures as a “false alarm”. Disciplinary proceedings have been opened against Kohn, and it is currently being clarified whether Kohn is guilty of official misconduct.