A comprehensive legal regulation of whistleblower protection is being introduced in Croatia with the recently enacted Whistleblower Protection Act ("Act"), which will enter into force on 1 July 2019. The Act is expected to level up Croatia's efforts in establishing the proper functioning of the internal legal order in comparison to the current system in which the relevant regulation was scarce and incorporated in numerous other laws.

Under the Act, a whistleblower is defined as a person who exposes corruption, violations of law, and malpractice in the management of public goods and assets. The wide statutory definition comprises not only persons employed in the private or public sector, but also persons outside of typical working relationships, such as volunteers, students and job applicants who are still in the hiring process.

The Act introduces various obligations for employers with 50 or more employees, and is aimed at supporting, protecting and encouraging the reporting of irregularities. These include, among others, the adoption of a system of internal reporting, appointment of a reporting officer, protection of sensitive data and introduction of appropriate measures for the elimination of irregularities.

The whistleblowing mechanism set out in the Act distinguishes between three levels of reporting. The first level is internal reporting to the internal reporting officer (internal report). In this way employers are given the opportunity to investigate the allegations themselves and take measures to eliminate potential irregularities. In cases of urgency or if the internal report is ignored by an employer, reports are submitted to the ombudsman (external report). In very exceptional cases which pose a threat to human lives or public security, a whistleblower is encouraged to make the reporting known to the general public (public disclosure).

The Act also establishes a protection mechanism for the whistleblowers from negative consequences. Under no condition should the whistleblowers be put in a disadvantaged position by the employer merely based on the fact that they drew attention to potential irregularities. The Act strictly forbids employers from using revengeful tactics, such as termination of the employment contract, non-payment of wages, transfer to another work place, prevention of promotion, harassment and other unlawful behaviour and measures. In case whistleblowers do need to seek protection against such acts before courts, they are exempt from paying court fees and the employer bears the burden of proof that its act is based on reasons other than retaliation against the reporting of irregularities.

In case employers fail to establish the reporting system, or fail to act upon it, monetary fines may be imposed ranging from EUR 1,300 – EUR 6,600 for employers (which are legal entities), and EUR 130 – EUR 4,000 for the responsible private individuals in the company.

This piece of regulation is expected to provide a more thorough protection to whistleblowers and to give employers more opportunity to oversee their businesses more thoroughly and ensure their compliance with the law.