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Whistleblowers – implementation of the EU directive soon

Polish employees and entrepreneurs have been waiting for the implementation of the EU whistleblower directive for almost 3 years, because by December 17, 2021, Poland, like other European Union countries, was obliged to implement EU regulations into our national legal system. What is the reason for such a long delay? What regulations must employers be prepared to implement?

Who is whistleblower?

Regardless of whether an entity belongs to the public or private sector, cases of abuse of law or illegal activities occur everywhere. These activities often involve, for example, acting to the detriment of an enterprise/institution or corruption. These actions are very dangerous and always have far-reaching consequences. A whistleblower is a person whose role is to report this type of negative activities to a business entity. This is a very broad concept, as it does not mean only an employed employee (regardless of the nature of the concluded contract), but also persons who are not employed but are directly related to the business entity, e.g. a supplier or subcontractor. There is often a misconception in the public space that a whistleblower is a negative figure called an “informer”, while the concept of the whistleblower’s function is completely different. A whistleblower is a person who, in the public interest and in good faith, reports irregularities in a given organization. This attitude should be perceived as socially responsible and aimed at increasing work and business safety.

According to the definition included in the draft act, a whistleblower is a natural person who reports or publicly discloses information about a violation of the law obtained in a work-related context, including: an employee, a temporary employee, a person providing work on a basis other than an employment relationship, including under a civil law contract, proxy, management board member, entrepreneur, shareholder, intern, volunteer or intern.

Whistleblower protection

The regulations in force at both national and EU level before the entry into force of the Whistleblower Protection Directive were quite poor and inconsistent. Therefore, the primary purpose of the directive was to unify these provisions at the level of the entire European Union and to introduce comprehensive regulations regarding the protection of the rights of persons reporting violations. The regulations also provide for specific forms and channels for whistleblowers to transmit information about undesirable effects, ensuring full confidentiality and, above all, introducing a complete ban on any retaliatory actions against persons exposing abuse.

The existing regulations and, in many countries, the complete lack of regulations in this area meant that people with knowledge of irregularities did not report the detected abuses, fearing the consequences of possible repressive actions.

What do the regulations oblige employers to do?

Whistleblower protection regulations impose several basic obligations on the employer:

  • Implementation of appropriate internal procedures specifying the rules, forms and channels for reporting irregularities,
  • Implementation of whistleblower protection measures,
  • Implementation of solutions to prevent possible negative consequences in connection with taking reporting activities,
  • Maintaining a register of notifications and administering this data,
  • Ensuring conditions enabling the effectiveness of the regulations implemented in the organization.

It is therefore important that the regulations introduced ensure, among other things, the availability of reporting channels in a given organization and do not in any way limit the possibility of making such reports. A good solution would also be to provide several possible channels for reporting violations, which will also be adapted to the specificity of the business and communication occurring in a given entity. The basic function that the communication channel implemented by the organization should have is to ensure whistleblowers’ anonymity and, consequently, protect their rights in this regard.

The act also sets out regulations regarding compensation that whistleblowers against whom retaliatory actions have been taken will be able to apply for. Compensation in this respect will be due in an amount not lower than the average monthly salary in the national economy in the previous year. It currently amounts to PLN 7,155.48.

The implementation of whistleblower protection provisions is not voluntary. The obligation to implement the above regulations results directly from the Act, which specifies that companies and other entities for which at least 50 people perform paid work as of January 1 or July 1 of a given year are obliged to implement the Act.

How to determine the number of people employed?

The number of 50 persons performing paid work for a legal entity includes full-time employees or persons providing paid work on a basis other than an employment relationship, if they do not employ other persons for this type of work, regardless of the basis of employment.

The number of 50 employees will not apply to entities operating in the field of financial services, products and markets, counteracting money laundering and terrorism financing, transport safety and environmental protection, covered by the scope of application of European Union legal acts listed in Part I.B and II of the Annex to the Directive 2019/1937. These are primarily:

  • entities granting loans, banks, parabank institutions,
  • insurance companies,
  • entities providing financial services, trading in securities, money market instruments, investment funds,
  • companies providing audit services,
  • accounting offices,
  • entities providing advice to business enterprises in the field of capital structure, industrial strategy and related issues, as well as advice and services regarding mergers and acquisitions of business enterprises.

Current legal status

Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons reporting breaches of Union law was adopted by the EU on 23 October 2019 and entered into force on 16 December 2019. There was enough time for its implementation a lot so far. Unfortunately, these regulations have not been implemented in Poland so far. Due to the above, our country was imposed a fine of EUR 7 million and a periodic penalty for each subsequent day of delay in the amount of EUR 40,000. It is true that the bill has already been submitted to the Sejm and is currently being processed there, but the European Union does not assess the intentions but the solutions actually implemented. The new regulations are to enter into force three months from the date of their publication in the Journal of Laws. It is estimated that they may come into force in the fourth quarter of 2024.

We also wrote more on this topic here.