In April 2019, the European Parliament adopted a new Whistleblower Directive. The Directive will – when finally approved - require employers to implement whistleblower schemes.

The aim of the Directive

In April 2018, the European Commission presented a proposal for a Directive aimed at protecting persons reporting violations of European law. Following the adoption of the Whistleblower Directive in the Council of Ministers – which is expected in the autumn of 2019 – the Member States will have a two-year deadline to implement the Directive into national rules.

The Directive will require both the private and public sectors to establish systems (whistleblower schemes) that are available to all employees and which enable individual employees to report confidentially. A whistleblower scheme can be administered either by the company itself or by an external third party. With the Whistleblower Directive, many more employers are therefore required to establish a whistleblower scheme than today. The report will therefore no longer be limited to violations of the Money Laundering Act, the Financial Business Act or other special legislation.

The Directive sets number of minimum standards in order to ensure effective protection against retaliation, including disciplinary sanctions against whistleblowers in a number of specific areas. These are in particular areas where violations can potentially cause serious harm to the public interest - including money laundering, public procurement, financial services, product and transport security, public health and consumer and data protection.

Private companies will only be covered by the Directive if the company has at least 50 employees, unless otherwise provided by other EU legislation. The Directive also allows Member States to lay down rules that the Directive's rules should apply to companies with fewer than 50 employees. The whistleblower scheme allows employees to choose to report via the company's own whistleblower scheme or directly to a competent authority. The protection against employer retaliation applies regardless of whether the employee reports through the company's whistleblower scheme and / or (directly) to a competent authority.

We are now awaiting a final decision from the EU Council of Ministers who together with the European Parliament constitutes the legislative power of the EU.

Bird & Bird Comments

The definition of a Whistleblower according to the Directive is broad and thus companies will need to handle reports from not only employees but also shareholders, interns, volunteers and the self-employed. If the proposal is approved in its current form by the Council of Ministers, the directive will require all sectors - both private with more than 50 employees and public - to establish whistleblower schemes.

For the Furthermore, all Member States must entitle competent authorities capable of handling employee reports. The Whistleblower Directive protects not only the employee making the report, but also the employee's relatives and the reporting employee's colleagues.