Special-Themed Newsletter: What do companies have to prepare for regarding the so-called Whistlerblower Directive?

()

The so-called Whistleblower Directive is currently the subject of heated debate in the media – but what is it all about and what do companies have to adapt to?

Cambridge Analytica, Panama Papers, Dieselgate, Luxleaks – in many cases, whistleblowers are the ones that bring illegal business practice to light. Celebrated by the public as heroes, they are usually treated as criminals by the judiciary. In 2018, the European Commission and the European Parliament have therefore launched a proposal for a directive[1] with which they aim to grant a higher level of protection for whistleblowers in the European Union against unjustified criminal prosecution, the deadline for its transformation into national law ends in May 2021. Better protection for whistleblowers will also be anchored in the new German Trade Secrets Act, which will be passed in the current legislative period and for which the EU legislator also set up mandatory requirements[2].

The German government is vehemently opposed to some of the required reforms, so it’s yet unclear which concrete changes will be implemented in German law. However, we strongly recommend all companies that have already implemented a whistleblower system or are planning to do so in the course of necessary compliance measures to consider the new requirements.

The most important new regulations at a glance:

  • Mandatory whistleblowing system

All companies with more than 50 employees or an annual turnover of more than EUR 10 million will be obliged to install an internal procedure for dealing with whistleblowers. State and regional administrations and municipalities with more than 10,000 inhabitants are also obliged to do so.

  • Fixed requirements for whistleblowing systems

In the future, whistleblowers must be granted access to three reporting channels of equal priority: (i) reporting to an internal system; (ii) reporting to the competent authorities if internal channels do not function or are not reasonably appropriate (e.g. if this could jeopardise the effectiveness of investigative measures taken by the competent authorities); (iii) reporting to the public/the media if previous reports were inconclusive or if there is otherwise an immediate or obvious threat to the public interest or a risk of irreparable harm.

The internal reporting procedure must establish clear channels within and outside the organisation to maintain confidentiality for the whistleblower. Any report must be dealt with within a fixed period of three months.

  • Legalisation of whistleblowing

Whistleblowers that act to protect a legitimate interest, such as the general public interest in detecting an illegal act or professional or other misconduct, shall not be liable or punishable, even if they breach a contractual obligation to confidentiality or disclose protected trade secrets.

  • Effective protection against reprisals

Whistleblowers that suffer retaliation or are otherwise disadvantaged, must be granted access to free legal advice and appropriate remedy. A reversal of the burden of proof in favour of the whistleblower is to be introduced. Thus in the future, affected persons or organisations will have an active duty to prove that no inadmissible measures have been taken against the whistleblower on the basis of the report.

In court proceedings, whistleblowers are to be exempted from liability for disclosing protected information.

Would you like to discuss this topic with us or receive further information? We look forward to hearing from you!

Sina Janke
Associate
Commercial/Compliance
T +49 89 3090 556 00
M +49 173 7291 416
E sina.janke@arqis.com

 

[1] COM(2018) 218 final.
[2] In the EU directive 2016/943.

back