Whilst Data Protection has dominated many jurisdictions’ reviews over the past 12 months (thanks largely to GDPR), a number of whistleblowing-specific legislation changes have also been proposed and passed.

Most notably, the EU has released a proposed whistleblowing protection directive. It is anticipated that this will have a significant effect on Member States’ whistleblowing legislation in the coming years.

The EU Directive

The Directive would require companies to provide a whistleblowing/reporting mechanism and provision for the protection of those who use such systems.

Under the new proposal, which would apply to all Member States, relevant employers would not be able to discriminate against someone who reports “relevant misconduct” on the provision that the disclosure was made in good faith.

The Directive is at proposal stage and subject to change, but the intention of the provision is clear: that the EU supports the protection and promotion of whistleblowing.

If approved, the passing of this Directive will also prompt Member States to review their current provisions on whistleblowing to ensure compliance.

Discover how you can begin preparing for the Directive

Recently-introduced legislation

Europe

Although several EU countries have proposed changes to their whistleblowing provisions in recent months, only Italy has passed its proposals into law since our last update.

Italy – Law 179/2017 – Provisions for the protection of persons sending communications of crimes or irregularities of which they have become aware within the ambit of an employment relationship in the public or private sector (Whistleblowing Law)

Having been in various draft forms for several years, Italy passed legislation aimed at protecting whistleblowers in the public and private sectors in December 2017.

At its core, the new legislation requires companies to have a reporting mechanism in place and provisions for the protection of those utilising that mechanism.

The provisions differ slightly for the public and private sector.

Public Sector

For the public sector, any sort of wrongdoing can be reported not only to the employer, but also the Italian Anticorruption Authority.

The new law extends existing protections for those in the public sector to include publicly owned private companies, and employees of private companies that supply services to public entities.

The negative reprisals from which a reporter is protected have extended to include any direct or indirect change which has any negative effect on their working condition. This is a very broad provision so would likely cover demotion, dismissal and significant change in administration or organisation of their role.

Private Sector

The Law requires companies following Model 231 to implement a reporting mechanism, with one or more communication channels, to allow employees and managers to report unlawful conduct or violations of the Model 231 that they have been made aware of in the course of their employment.

The content of a company’s Code of Ethics constitutes a fundamental part of the Model. As such, a breach of the code could potentially be covered by this provision, meaning the scope of issues that can be reported could be quite broad and dictated, to some extent, by the company.

As in the public sector, the same provisions regarding discrimination against whistleblowers is extended to include discriminatory redundancies, changes in role or any discriminatory measures.

For private sector companies that do not follow Model 231, provisions surrounding whistleblowing hotlines remain unchanged by the new legislation. There are obligation requirements under the Anti-Corruption Act 2015 to establish internal compliance reporting systems but the provisions around the scope of such mechanisms are not specifically restrictive.

Rest of the World

An uptake in anti-corruption legislation across the board has also led to an increase in consideration for whistleblowing outside of Europe.

Many countries have stated their intention to incorporate some form of legislative protection for those that report misconduct, especially financial crime or corruption.

The following countries have now passed the relevant legislation.

Brazil – Law 13,608 (11/1/18)

Published on 11th of January 2018, Federal Law 13,608 includes provisions for Public and State companies to establish whistleblowing hotlines to assist with investigation of crimes or administrative offences.

The law does not strictly prohibit anonymity and references the ability to choose whether to be identified, indicating that it would be permitted. Confidentiality of reporters is also a fundamental cornerstone of the new provision.

Whilst not a strict requirement, there is provision within the new law for entities to offer a reward for reporting should they chose.

The offering of a reward for information resulting in successful investigation of a crime is a feature in the whistleblowing legislation of several countries, mainly those modelling their provisions on the US Dodd-Frank law. It is often seen as an added incentive to encourage reporters to fully disclose all relevant indiscretions to facilitate their investigations.

The provision to allow for rewards can mean that companies are more restrictive in the categories of reports covered by their policy. However, given that this is not strictly mandated by the legislation and there are no specific restrictions on what cannot be reported, it will be necessary to monitor legal commentary on this point.

South Africa – Act No. 5 of 201 – Protected Disclosures Amendment Act 2017

Intended to extend the existing whistleblower protection, the amendments mainly serve to extend the types of “disclosures” which are protected.

Under the amendment, both current and former employees/workers can now make a report. The new amendment has also extended what constitutes an “occupational detriment”, strengthening the protection from retribution, and in turn encouraging more people to report.

The change specifically prevents companies from seeking a civil claim against reporters. Legal commentary indicates that the intention of this addition is to prevent companies writing anti-whistleblowing provisions within their employee contracts which would allow them to sue the reporter for breach of contract.

There is also an obligation for companies to acknowledge receipt of a report within specified timeframes. This provision does not apply to reports made anonymously or where the provision of feedback may jeopardise investigation of a criminal offence.

Proposed legislation

The following countries have drafted or proposed legislation specifically related to whistleblowing, or have expressed an intention to introduce it soon. This suggests changes to the global legislative landscape will gather significant pace in the next 12 months.

  • Australia
  • Bulgaria
  • Croatia
  • Latvia
  • Nigeria
  • Poland
  • Russia
  • Spain
  • Switzerland
  • Turkey
  • Ukraine

The EU countries with draft provisions may now adapt or delay in passing their legislation whilst the Directive is still under discussion – or it may incentivise them to pass their proposals more quickly.

Spain – Organic Law Project on Data Protection

Of particular interest are the draft changes to the Organic Law on Data Protection in Spain.

Whilst not whistleblowing-specific legislation, the new data protection provision has direct implications on how whistleblowing reports can be processed in Spain.

The previous position, following guidance from the data protection authority (Agencia Española de Protección de Datos (AEPD)), did not permit reports to be submitted anonymously.

The new proposal does not explicitly override this provision but it does allow for “specific treatment” of data processed as part of an internal complaints system in the private sector, even if submitted anonymously. The provision states that this data should be protected and access to such data limited to those who manage or oversee the reporting process.

The provisions have not yet been passed into law but, if passed in its current form, it may encourage an increase in whistleblowing in Spain.

Australia – The Treasury Laws Amendment (Whistleblowers) Bill 2017

After much commentary on the point, a Bill has been introduced to Australia’s Senate to govern whistleblowing at a national level.

Australia currently has state-specific provisions which vary as to the scope of a permitted report. A key discrepancy relates around the acceptance of anonymous reports.

The Bill would apply a uniform approach to whistleblowing across the country and indications are that the new law will broaden the categories of those who can make a report, and that anonymous reports would be required across all states.

Poland

There are strong indications that Poland’s Act on Transparency of Public Life will be passed by the end of 2018.

Currently awaiting debate in Parliament, the draft focuses on the establishment of reporting mechanisms and the protection of those considered “whistleblowers”.

Latvia

Latvia’s Government have approved a draft whistleblower protection law which is now awaiting approval by the Parliament.

The provisions centre around the protection of whistleblowers reporting, in good faith, violations which affect the public interest that they have observed in the course of their employment.