knowledge | 26 April 2018 |
Whistleblower Protection to Strengthen Across the EU
In the wake of recent scandals such as Dieselgate, the Panama Papers and Cambridge Analytica, all brought to light by whistleblowers, the European Commission has proposed new laws to strengthen whistleblower protection across the EU.
Currently, the protection of whistleblowers is fragmented and inconsistent across the EU. Only ten of the EU Member States offer comprehensive whistleblower protection. These ten include Ireland. At EU level, there is limited whistleblower protection, focussed predominately on the areas of financial services, transport safety and environmental protection.
The European Commission considers that this lack of cohesion needs to be addressed as insufficient whistleblower protection can impact negatively not only on the functioning of EU policies in one Member State, but also in other Member States and the EU as a whole. Whistleblower protection can also make it easier to detect, prevent and deter fraud, corruption and other illegal activities affecting the financial interests of the Union.
In light of these concerns, the Commission’s proposal envisages EU-wide protection for whistleblowers who report breaches of EU law in the areas of public procurement; financial services, money laundering and terrorist financing; product safety; transport safety; environmental protection; nuclear safety; food and feed safety, animal health and welfare; public health; consumer protection; privacy, data protection and security of network and information systems. Whistleblowers who report breaches of EU competition rules, abuse of corporate tax rules and damage to the EU's financial interests will also be protected. These will be minimum EU-wide protections aimed at whistleblowing genuinely intended to safeguard the public interest. The individual Member States will be encouraged to go beyond these minimum standards by legislating for comprehensive whistleblower protection based on the EU principles.
Under the proposed changes, as a general rule, businesses with more than 50 employees or with an annual turnover of over €10 million will be obliged to have internal procedures in place to address whistleblower reports. Certain public administrative bodies will also need to comply with the new requirements which include:
• Clear and confidential reporting channels;
• Employer feedback and follow-up within prescribed time limits;
• Measures preventing retaliation and offering effective protection and remedies to whistleblowers.
There will be certain exemptions for smaller businesses, with the exception of those operating in financial services or which are vulnerable to anti-money laundering or counter terrorist financing. Whistleblowers should also have access to external reporting channels and protection, as necessary.
In addition, whistleblowers will be offered procedural and other protections in court proceedings. This will include an exclusion of liability for disclosing the information, for example, in proceedings for breach of confidentiality or defamation.
Under the Commission's proposal, whistleblower protection will extend not only to employees but also the self-employed, freelancers, consultants, contractors, suppliers, volunteers, unpaid trainees and job applicants.
However, from an employer perspective, safeguards will also be put in place to discourage malicious or abusive reporting and unfounded reputational damage. Member States will have to introduce effective, proportionate and dissuasive penalties for those who act in this way. Those affected by a whistleblower’s report will also enjoy the presumption of innocence, the right to a fair trial and an effective remedy.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.