The European Union (EU) Whistleblowing Directive is a significant legislative initiative aimed at bolstering transparency, integrity, and accountability in both the public and private sectors across EU Member States.
At its core, this Directive provides a comprehensive framework for safeguarding whistleblowers, recognising their pivotal role in unveiling illegal activities, corruption, and various other forms of wrongdoing.
The EU Commission defines a whistleblower as an individual who reports or discloses information related to misconduct within their organisation or to external authorities, with the intention of preventing harm to the public interest that might otherwise go unnoticed.
The scope of protection
The EU Directive extends protection to a wide array of individuals, including current and former employees, directors, temporary and contract workers, freelancers, suppliers, shareholders, and even job applicants. It covers a broad spectrum of relationships, ranging from pre-contractual negotiations to those who have left their positions.
One of the Directive’s pivotal advancements is the expansion of whistleblower protection beyond the public sector. It now includes private companies with 50 or more employees, non-governmental organisations (NGOs), and others. Moreover, it protects those who report breaches of EU law, spanning areas such as financial services, environmental protection, consumer protection, and public health.
Influencing Best Practices
The EU Whistleblowing Directive has had a profound impact on best practices in the workplace. Employers in the EU are advised to proactively prepare for whistleblowing compliance. Key steps include monitoring the progress of Directive implementation in each EU country, reviewing or establishing whistleblowing arrangements, and streamlining processes globally to ensure consistency and transparency.
Key recommended actions include:
- Monitor the progress of Directive implementation in each EU country where the company operates, noting areas for differentiation.
- Review or establish whistleblowing arrangements to provide clear reporting channels, covering aspects like external reporting, broad reportable matters, and extended reporter categories.
- Consider consolidating multiple hotlines into a central clearing house for comprehensive reporting data.
- Configure telephone/automated hotlines to meet jurisdictional requirements and language considerations.
- Continuously monitor and maintain records of relationships with individuals who make reports, even after resolving their matters.
- Streamline processes globally, with minor variations, to facilitate metrics tracking and process consistency.
Transposing the law: how have countries fared?
In January 2022, the European Commission issued formal notices to 24 member states for their inadequate transposition and communication of measures regarding the directive. By July 2022, reasoned opinions were sent to 15 member states, with four more receiving them in September 2022 due to incomplete transposition. This unsatisfactory response from eight member states prompted the Commission to escalate the matter by referring these cases to the Court of Justice of the European Union.
In February 2023, the European Commission took decisive action against eight EU member states (Czechia, Germany, Estonia, Poland, Spain, Italy, Luxembourg, and Hungary) for their failure to transpose the EU Whistleblowing Directive (Directive EU 2019/1937) into national law. Despite the December 17, 2021, deadline for compliance, some nations lagged behind. While some countries have embraced the directive with praise and criticism, others have faced challenges in meeting its provisions.
As of September 2023, all EU member states, with the exception of two, have adopted legislation aligning with the EU Whistleblowing Directive (Poland and Estonia have encountered delays in transposing this legislation into their national laws, but Estonia has recently made progress on its draft.).
The European Commission has demonstrated its commitment to repercussions for states who do not comply with the new legislation. This has prompted decisive action being made and the pushing through of compliant whistleblowing legislation into law. This has seen varying levels of success across the member states, with many of these laws – despite being technically compliant – receiving further scrutiny upon adoption.
Case studies
Spain’s Whistleblowing Law:
Spain’s law, enacted in February 2023, garnered both praise and controversy. While Article 7.3 allows for anonymous reporting through internal channels, ensuring whistleblower protection, certain provisions have raised concerns. The three-month complaint resolution timeframe may prove inadequate for complex cases, potentially hindering thorough investigations. Furthermore, the mandate for immediate reporting to the Public Prosecutor’s Office has been criticised for potentially infringing on individuals’ rights and turning whistleblower channels into conduits for prosecutors.
Praises for the Spanish Whistleblowing Law:
- Protection for Anonymous Reporting: The law ensures whistleblowers’ safety through anonymous reporting.
- Transparency and Accountability: It encourages reporting to combat corruption, promoting transparency.
- Immediate Reporting to Prosecutors: Mandating prompt reporting of potential criminal activity enhances legal enforcement.
Criticisms for the Spanish Whistleblowing Law:
- Short Resolution Timeframe: Complex cases may require more time than allowed.
- Potential Privacy Concerns: Reporting requirements could infringe on the right to remain silent.
- Prosecutor’s Role: Critics see it as a means for prosecutors to access potentially incriminating information.
Ireland’s Whistleblowing Law:
Ireland enacted new whistleblower protection laws in 2022, earning both praise and criticism. These laws align with EU standards, ensuring clarity, stronger safeguards, and better follow-up procedures.
Praises:
- Compliance with EU Directive: Demonstrates Ireland’s commitment to EU whistleblower protection standards.
- Internal and External Reporting Channels: Provides options for whistleblowers to maintain anonymity.
- Criminal Offences: Introduction of penalties aligns with EU requirements, emphasising enforcement.
- Transparency: Prescribed persons must provide clear information about their role, enhancing transparency.
Criticisms:
- Chilling Effect: Criminalising false reports may discourage whistleblowers.
- Delay in Implementation: Enacted over a year after the deadline, leaving whistleblowers unprotected.
- Weakening of Protections: Concerns about the laws indirectly weakening statutory provisions.
Poland’s Whistleblowing Law:
Poland’s law aligns with the EU Whistleblower Directive, providing a comprehensive legal framework but has faced criticism for potential ambiguities and deficiencies.
Praise:
- Alignment with EU Directive: Comprehensive legal framework aligned with EU standards.
- Expanded Scope: Covers breaches of national law and various categories of employees.
- Protection for Whistleblowers: Offers protections for whistleblowers reporting information concerning the public interest.
Criticisms:
- Scope Ambiguity: Some criticise the material scope for not covering all violations of law.
- Vague Criteria: Concerns about the “concerns public interest” criterion being subjective.
- Lack of Interim Relief: No dedicated interim relief for whistleblowers during legal proceedings.
France’s Whistleblowing Law:
France’s new whistleblowing laws received mixed reviews, with commendation for the enhanced role of the Defender of Rights but concerns about the lengthy opinion deadline and lack of sanctions for non-compliance.
Praises:
- Enhanced Role of Defender of Rights: Clear guidance provided to whistleblowers.
- Formal Certification: Offers legal recognition and protection to whistleblowers.
- Support for Whistleblowers: Creation of Deputy Responsible for Supporting Whistleblowers addresses resource constraints.
- Acknowledgment of Information and Advice: Comprehensive support provided.
Criticisms:
- Lengthy Opinion Deadline: Concerns raised about the six-month waiting period.
- Lack of Sanctions: Absence of penalties for organisations not establishing internal reporting systems may undermine effectiveness.
Conclusion
The transposition of the EU Whistleblowing Directive into national law has been met with a range of responses across EU member states. While some have taken steps towards fostering transparency and whistleblower protection, others face challenges and controversies. Balancing the need for transparency, accountability, and protection for whistleblowers with concerns about potential abuses and chilling effects remains a complex task that requires ongoing evaluation and scrutiny. The journey towards robust whistleblower protection and ethical cultures in organisations continues across Europe.