In brief

  • The Act on the Protection of Public Interest Whistleblowers came into force on 30 September 2011 and is designed to protect individuals who report violations of the public interest to certain prescribed bodies (eg their employer) against suffering ‘disadvantageous measures’.
  • Disadvantageous measures could include dismissal, disciplinary action or other employment-related detriment taken against a whistleblower. Penalties for invoking disadvantageous measures include criminal sanctions and whistleblowers may be also be entitled to compensation in some cases.

Background

The Act on the Protection of Public Interest Whistleblowers (the Act) offers protection to whistleblowers who report any violation of public interest in both the public and private sector.

A ‘whistleblower’ is defined as any person who reports, petitions, informs, accuses or complains that a violation of the public interest has occurred or is likely to occur to a representative of a company or employer, the administrative or investigative agency concerned, the Anti-Corruption and Civil Rights Commission (ACRC) or other designated person in the Act.

A ‘violation of the public interest’ includes any act that could harm public health and safety, the environment, consumer interests and fair competition or acts that are subject to criminal sanctions or administrative action as prescribed in the Act.

Key features

The Act sets out the method for whistleblowers to submit their allegation of a public interest infringement to a prescribed person in the Act. This is usually in the form of a written report. An examination or investigation will then commence unless the case is clearly deemed to be false or the whistleblower fails to provide prescribed or supplementary information.

Whistleblowers are protected under the Act against suffering ‘disadvantageous measures’ which, in summary, could include:

  • dismissal, removal from office or loss of status,
  • disciplinary action, demotion or other unfavourable personnel action, and/or 
  • discrimination in performance evaluation, payment of wages or bonuses, etc.

In the event that a whistleblower suffers disadvantageous measures he or she may make a request to the ACRC to take ‘protective measures’ which can include, for example, re-instatement, compensation or the cancellation or express prohibition of any disadvantageous measures that have occurred.

The whistleblower can also request that preventive measures should be taken where no disadvantage has yet occurred but where retaliation for whistleblowing activities is highly likely.

Whistleblowers are guaranteed confidentiality and protection of personal safety under the Act where they or their relatives are likely to suffer serious danger.

Implications for employers

Implementation of disadvantageous measures, a breach of confidentiality or a failure to take protective measures in respect of a whistleblower can result in penalties of up to 3 year’s imprisonment or a fine of up to 30 million won.

In some cases, whistleblowers may also be entitled to compensation where they have suffered financial hardship (eg due to loss of salary, medical expenses or litigation costs) as a result of their whistleblowing.

Many multinational employers will already be familiar with whistleblowing protection in a number of other jurisdictions, most notably the Sarbanes-Oxley laws in the US. Employers with operations in Korea should familiarise themselves with the provisions of the new Act and consider whether their existing employee disclosure policies (and any related policy or procedures such as dismissal and disciplinary) need to be updated to take account of the new law.