Directive

EU Whistleblowing Directive at a glance 

by , on Mar 15, 2022 08:00:39 AM

Directive (EU) 2019/1937, also known as the Whistleblowing Directive, requires every company or public body situated in the EU that has 250 or more employers to implement its own internal reporting policy about whistleblowing. 

Whistleblowers are important for maintaining an open and transparent society as they expose misconducts or hidden threats. The Directive, which entered into force on 19th December 2019, requires EU member states to implement it no later than 17th December 2021 as a form of protection to whistleblowers. In their implementation, member states are given the leeway to determine how the reporting channels will be established, provided that there are protections to ensure confidentiality and anonymity.

Goals of the Whisteblowing Directive is:

  • To improve law enforcement by establishing effective, confidential and secure reporting channels to effectively protect whistleblowers out of fear from retaliation;
  • To protect and prevent misconduct and breach of laws and regulations;
  • To protect and enable whistleblowers by helping them to raise concerns without fear of retaliation, by granting them anonymity. 

Scope of the Directive:

The Whistleblower Directive  covers disclosure of EU law violations in the following areas, among others: public procurement, financial services, tax fraud, money laundering, offences related to public procurement, transportation, environmental protection, food and feed safety, protection against radiation and nuclear safety, animal health and welfare, product safety, consumer protection and state aid, public data, protection of privacy and personal data and competition law compliance to the extent that a matter is not mandatorily regulated by sector-specific to EU legislation. It is worth noting that the Union allows member states to extend the scope of application of the Directive under their domestic legislations .

Companies with more than 50 employees, the public sector, institutions, authorities, as well as municipalities with 10,000 or more inhabitants are obliged to set up working internal reporting channels. Firms that have 250 or more employees will be expected to comply within two years after the adoption of the Directive, whereas those with employees varying between 50 and 250 have another two years after the transposition of the Directive to comply with the legal order. 

Whistleblowers should be able to send reports either in writing through an online system, by post, mailbox or orally via a telephone hotline or answering machine system. 

Who is protected?

  • Employees, former employees, self-employed individuals, freelancers, contractors, and subcontractors
  • Members of an administrative, management or supervisory body
  • New employed who have not yet started working
  • Facilitators
  • Shareholders
  • Third persons related to the reporting person
  • Legal entities related to the reporting person
  • Trainees
  • Volunteers
  • Journalists

Sanctions: 

The Directive obliges member states to impose effective and proportionate sanctions on companies and public bodies that do not comply with the reporting system, including failing to maintain the confidentiality of whistleblowers and hindering attempts to report breaches. 

What is next?

The Whistleblower Directive shows that many companies have already proactively set up hotlines and received reports that allowed them to manage their businesses in a more effective and efficient manner. To ensure that employees feel safe to report internally, channels should be open 24/7 in all the relevant languages. They shall also offer anonymity, have comprehensible explanatory texts and present an effective internal communication strategy. In situations when whistleblowers cannot find suitable internal reporting channels, they can contact the relevant authority or publicly share the issue which is the biggest nightmare for companies. This explains the vital importance of the Directive. On the one hand it respects the public image of the company and on the other the safer working environment for individuals. 

 

For further information on the EU Whistleblowing Directive, please do not hesitate to contact us at [email protected] 

 

Author: Stephanie Marinova