On 23 April 2018 the European Commission proposed a new Directive to strengthen whistleblower protection across the European Union (link to EU proposals here).
The proposal reflects the fact that only ten EU countries (including France, Netherlands, Italy, UK) currently have comprehensive laws protecting whistleblowers. Others (including Germany, Spain, Portugal, Belgium) have only partial “coverage” - which includes certain coverage in the financial services sector but leaves gaps in protection across other sectors.
The Commission is concerned that this uneven and fragmented approach undermines whistleblower confidence and EU legal and policy interests. Focus has been heightened by recent scandals including the ongoing Cambridge Analytica issues.
Key points to note
The proposed Directive provides for:
- Protection for disclosures on issues including: public procurement; financial services, anti-money laundering and counter terrorist financing; product safety; environmental protection; consumer protection; protection of privacy and personal data and security of network and information systems; breaches of EU competition rules; and specific breaches of tax regulations.
- Requirements re: reporting, escalation and response including:
- obligation on private companies with more than 50 employees or annual turnover in excess of €10m to implement internal reporting channels, including a designated party or department who will receive and follow up on disclosures and feedback to the person who raised them within a three month period, and
- a set escalation chain - internal channels, then external authorities, with possible public/ press disclosure as a last resort.
- Protection for individuals working in the private/public sector who have acquired information on breaches in a work-related context - including (but not limited to) workers, the self-employed, shareholders, persons in the management body of an undertaking including non-executive members, and contractors, subcontractors and suppliers.
- Rights for whistleblowers including access to free independent advice on procedures and remedies, access to interim relief, reversal of the burden of proof, specific rights to confidentiality and penalties for action which is retaliatory, hinders reporting or breaches whistleblower confidentiality.
The draft Directive expressly provides that whistleblowers will not be considered to have breached any contractual or statutory non-disclosure obligation by making a relevant disclosure. The new law will also offer a defence in wider defamation, breach of copyright or secrecy claims.
The proposals do not include provision for financial bounties for whistleblowers.
The proposed Directive remains subject to review and approval by the European Parliament and the European Council, so is still some way away from becoming law. However firms may want to take the opportunity to review what arrangements they have in place across their European operations (ahead of any more detailed compliance audit if the proposals are implemented).
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.