EU Whistleblowing Directive - 2023 Update

What is the EU Whistleblowing Directive?

The European Union (EU) Whistleblowing Directive is a legislative act that aims to promote transparency, integrity, and accountability in both public and private sectors across EU Member States.

The Directive provides a framework for the protection of whistleblowers, which is essential in facilitating the disclosure of information on illegal activities, corruption, and other wrongdoing.

The EU Commission classifies a whistleblower as “a persons who reports (within the organisation concerned or to an outside authority) or discloses (to the public) information on a wrongdoing obtained in a work-related context, helping prevent damage and detecting threat or harm to the public interest that may otherwise remain hidden.”

Here are some of the most recent updates about the EU Whistleblowing Directive.

What does the Directive mandate?

Scope of Protection

The EU Whistleblowing Directive expands the scope of protection for whistleblowers beyond the public sector to include private companies with 50 or more employees, as well as non-governmental organisations (NGOs), and others. The Directive also protects whistleblowers who report breaches of EU law, such as those related to financial services, environmental protection, consumer protection, and public health, among others.

Reporting Channels

The Directive requires that organisations establish internal reporting channels to allow employees to report wrongdoing within their workplace. These reporting channels should be easily accessible and guarantee confidentiality and protection against retaliation. Employees must be able to access a telephone hotline to report concerns. Organisations must also appoint a person or department responsible for receiving and handling reports of wrongdoing.

Protection Against Retaliation

One of the most significant aspects of the EU Whistleblowing Directive is the protection it provides against retaliation. Employers are prohibited from retaliating against whistleblowers in any form, including dismissal, demotion, and harassment. Whistleblowers are also entitled to remedies, such as reinstatement, compensation, and access to legal assistance.

Reporting to Competent Authorities

If internal reporting channels fail or are not appropriate, whistleblowers are entitled to report directly to competent authorities. Competent authorities are defined in the Directive as those with the power to investigate and remedy the reported breach. The Directive requires Member States to designate competent authorities and establish procedures for the receipt and handling of reports.

Who has implemented the Directive?

As of March 2023, all EU member states have implemented the EU Whistleblowing Directive. However, some countries, such as Hungary, have been slower in transposing the directive into national law, while others, such as France and Ireland, have gone beyond the minimum requirements of the directive and implemented additional protections for whistleblowers.

In some countries, such as Germany and the Netherlands, whistleblowing protections already existed before the adoption of the directive, and the new legislation was used to further strengthen these protections. Other countries, such as Spain and Poland, have faced criticism for the weakness of their whistleblower protections, even after implementing the directive.

Overall:

• 1 EU Member State has taken no or minimal implementation action
• 7 EU Member States are in the process of legislating for implementation of the Directive
• 19 EU Member States have passed implementing legislation

The EU Whistleblowing Directive represents a significant step forward in protecting whistleblowers and promoting transparency and accountability. However, it remains to be seen how effectively the directive will be enforced and whether it will lead to greater reporting of breaches of EU law.

How could this impact UK businesses?

The Directive establishes that these regulations apply to employers who “operate” in the EU. This is true of many UK-headquartered businesses. This means that even if the business is not ‘based’ in an EU member state, it could find itself within scope of the directive due to it having workers or offices in states under the Directive’s jurisdiction. Such businesses must seek guidance on the extent to which the Directive will impact them and take the appropriate steps to be compliant.

Being compliant with UK legislation does not mean a business is covered for their EU operations. The EU Whistleblowing Directive has more comprehensive regulations than UK legislation in some areas, notably regarding internal reporting channels.

Although the UK has not yet announced intentions to revamp their own whistleblower protections, a new ‘Protection for Whistleblowing Bill’ was introduced for reading into the House of Lords in 2022. The future of the bill and whether or not it will progress to the House of Commons is yet to be confirmed.

Get Compliant

Implement an independent whistleblowing hotline

Protecting whistleblowers begins at the point of making a report. The Directive mandates that relevant parties are able to make disclosures confidentially. Safecall, as an independent whistleblowing service providers, ensures  employees have a secure avenue to report wrongdoing.

Utilise competent and and impartial providers

The Directive now insists that firms utilise an ‘impartial and competent’ party to facilitate the whistleblowing process. Case management and investigation services, offered by specialised external providers, ensure competence and impartiality.

Similarly, if investigations are to be handled internally, training for managers is essential. Whistleblowing is a unique situation. Whistleblowing reporting managers who have not received training can feel overwhelmed or out of their depth when a whistleblowing case arises. Arranging training sessions for your workers, created bespoke for your business, can help avoid the fallout of non-compliance with the new regulatory measures.

Train employees; raise awareness

Workers must be aware of their employer’s whistleblowing policy. They must know how to make a disclosure. Educating your workers on your whistleblowing policy and their rights in making a disclosure helps to develop a culture of openness, transparency, and integrity.

Whistleblowing training for employees is necessary to prevent and mitigate wrongdoing in the workplace, and for regulatory compliance.