Whistleblowers – draft directive to protect persons revealing breaches of EU law

The EU institutions are currently working on the adoption of Directive on the protection of persons reporting on breaches of EU law.

It will introduce the rules on the legal protection of whistleblowers or persons reporting illegal activities and abuses of law. The objective of the proposed Directive is to help prevent damage and detect threat or harm to the public interest as a result of the breaches and ensure effective protection of whistleblowers.

Status of the reporting person

Persons working in the private or public sector who acquired information on breaches in a work-related context will have the status of the “reporting person”. This group will include, among others:

• employees,
• self-employed persons,
• shareholders and persons belonging to the governing body of an undertaking,  
• volunteers and trainees,
• any persons working under the supervision and direction of contractors, subcontractors and suppliers.

This status may also be obtained persons whose work-based relationship is yet to begin in cases where information concerning a breach has been acquired during the recruitment process or other pre-contractual negotiation.

Learn more: Changes to the Labour Code will increase the protection of employees

Reporting a breach

Reporting, as a result of which a person obtains special status, will consists in the provision of information relating to a breach which has occurred or is likely to occur. Directive sets out the obligation for EU member states to ensure that legal entities in the private and public sectors establish “internal reporting channels” and “internal procedures for receiving and following-up on reports”.

The legal entities in the private sector to which the Directive will apply are as follows:

• legal entities with 50 or more employees

or

• legal entities with an annual business turnover or annual balance sheet total of
  EUR 10 million or more

Regardless of the above volumes, the rules will also apply to legal entities operating in the area of financial services or vulnerable to money laundering or terrorist financing.

Whistleblower protection

The Directive obliges the member states to introduce protection of reporting persons. It also introduces the concept of ‘retaliation’ and prohibits any forms of retaliation.

In accordance with Directive, „retaliation” means any threatened or actual act or omission prompted by the internal or external reporting which occurs in a work-related context and causes or may cause unjustified detriment to the reporting person.

A reporting person will qualify for protection under Directive provided he or she has reasonable grounds to believe that the information reported was true at the time of reporting and that this information falls within the scope of Directive. Member states will be obliged to take the necessary measures to protect reporting persons and to take measures to prohibit any form of retaliation, whether direct or indirect, against reporting persons.

Reporting persons, being employees, will be particularly protected against:

• termination of contract,
• withholding of promotion,
• change of workplace or working hours,
• reduction in wages, negative performance assessment or employment reference
• imposition or administering of any disciplinary penalty,
• intimidation,
• workplace harassment

Summary

The objective of the proposed Directive is to introduce in the territory of EU members states the harmonized standards as regards the comprehensive protection of whistleblowers (persons revealing breached acquired in a work-related context). Currently, the Polish legislation does not adequately regulate this issue, therefore, new EU regulations should deserve a positive opinion.

According to the intention of the EU legislator, member states should bring into force the laws protecting whistleblowers by 15 May 2021, at the latest. Upon entering into force of the laws implementing the directive, it will be necessary to put in place an effective system of protection of reporting persons and set out detailed rules for following-up on reports.

Sylwia Składzień
Associate, attorney-at-law
TGC Corporate Lawyers

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