Introduction
Law application
Comment
In Portugal, it is not uncommon to have laws that are completely dissociated from the reality they are intended to regulate. It seems that the same problems are now being faced with regard to an EU instrument.
The EU Whistle-blower Protection Directive(1) was published on 23 October 2019. The transposition process in Portugal(2) culminated in the publication of Law 93/2021 of 20 December (the Law), which establishes the general legal framework for the protection of whistle-blowers. The Law came into force on 18 June 2022.
The Law does not deviate significantly(3) from what was already set out in the EU Whistle-blower Protection Directive. Among other things, it establishes the obligation for all legal persons to have internal whistle-blowing channels. This includes:
- the state;
- other legal persons governed by public law who employ 50 or more employees;(4) and
- all entities included in the scope of the EU acts referred to in part i.B and ii of the Annex to the EU Whistle-blower Protection Directive.
The problems of practical applicability of these rules start to emerge when looking at the solution established regarding the possibility of sharing resources by the companies in terms of the handling of reports addressed to them.
The Law expressly states: "Obliged entities not governed by public law that employ between 50 and 249 employees can share resources with regard to receive reports and follow up on them."(5)
The EU Whistle-blower Protection Directive states:
Legal entities in the private sector with 50 to 249 workers may share resources as regards the receipt of reports and any investigation to be carried out. This shall be without prejudice to the obligations imposed upon such entities by this Directive to maintain confidentiality, to give feedback, and to address the reported breach.(6)
It seems clear, therefore, that legal persons under private law employing no more than 249 employees may, if they wish, share resources for receiving reports and for the investigation to be carried out. The question arises as to the "follow-up", which is much broader than the mere "investigation" of the report – it includes, for example, communications to be made to the whistle-blower. Can the follow-up be shared? Under Portuguese law, apparently it can.(7) However, under the EU Whistle-blower Protection Directive, not necessarily. Maintaining confidentiality, giving feedback and addressing the reported breach remain the individual responsibilities of each of the obliged entities.
Moreover, the initial assumption regarding the receiving of reports may not be correct. Indeed, to compound the problem, the minutes of the meetings of the Commission expert group on the EU Whistle-blower Protection Directive state that:
national transposition laws that would allow corporate groups to only establish reporting channels in a centralised manner at group level would constitute an incorrect transposition of the Directive(8) . . . . Based on Article 8(6), it can be compatible with the Directive that medium-sized subsidiary companies in a corporate group benefit from the investigative capacity of the parent company. This applies only provided that . . . reporting channels remain available at subsidiary's level.(9)
According to this expert group, reporting channels are not included in the definition of "receipt of reports" and, therefore, each entity is obliged to have its own reporting channels. When considering the actual circumstances of any group of companies, however, this solution does not make any sense.(10) The most natural, feasible and pragmatic approach would be to allow a common channel, as a rule, operated by departments connected to the parent company and/or shared by the group.
As can be seen in the minutes of the meetings mentioned above,(11) the rationale of this sharing of resources is to ensure "the reporting channels' efficiency, including by ensuring their proximity to the whistleblower".
But this relationship of proximity may even be contrary to the intended purposes, for example, in a small department and the atmosphere created by this much sought-after proximity. Moreover, in a company or group of considerable size (remembering that companies with more than 250 employees cannot share resources), this close relationship may be non-existent or absolutely irrelevant to the whistle-blower. On the contrary, the proliferation of reporting channels (one for each company) may make things more complex and dissuade people from using something that should be simple and efficient.
In short, perhaps instead of regulating the details of the practical compliance of legal solutions, should the emphasis instead be placed on making sure that they are effective and that, instead of being yet another level of bureaucracy that companies are forced to comply with, they are in fact measures that have a positive impact on everyone's lives? Even if less perfect or complete, the law in action is always more necessary than an extensive and detailed law in books. In this respect, Portuguese law seems to be surpassing the EU Whistle-blower Protection Directive.
For further information on this topic please contact Paulo Farinha Alvesor or Dirce Rente at PLMJ by telephone (+351 213 197 300) or email ([email protected] or [email protected]). The PLMJ website can be accessed at www.plmj.com.
Endnotes
(1) Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law.
(2) The process began in May 2021 with Draft Law 91/XIV/2, which was issued at the Government's initiative. Despite the joint debate with more than two dozen pieces of legislation, only two of which expressly addressed the issue of whistle-blowers, the text of the law follows the government's proposal.
(3) Of note is the fact that Portuguese law extends the scope of protection to whistle-blowers who submit reports regarding violent, especially violent and highly organised crime, as well as the crimes set out in article 1(1) of Law 5/2002 of 11 January, which establishes measures to combat organised and economic-financial crime.
(4) Including branches located in Portugal of legal persons with registered offices abroad.
(7) The general principle to interpret the national law in the light of the wording and the purpose of the directives meets some limits. For instance, the interpretation cannot be contra legem, it cannot imply an aggravation of the criminal liability relating to the violation of the rules set and it cannot violate the general principle of legal certainty, which seems to be the case (see Marleasing (case No. C-106/89), Wagner Miret (case No. C-334/92), Pretore di Salò/X (case No. 14/86, No. 18), Kolpinghuis (case No. 80/86, No. 13 and 14) and Arcaro (case No. C-168/95, No. 37)).
(8) Minutes of the fifth meeting of the Commission expert group on Directive (EU) 2019/1937 (videoconference) 14 June 2021.
(10) It does not seem to have been incorporated by the national law, which, instead of the word "receipt", uses the word "receive".