Search for:

In brief

The European Whistleblowing Directive (WBD) was supposed to be implemented by the European Union’s 27 member states by no later than 17th December 2021, impacting employers with operations in those jurisdictions.

One year on from this deadline, despite the European Commission (EC) commencing infringement procedures against those countries that had failed to implement the WBD in January 2022, we are still waiting for 14 EU member states to do so. Whilst legislation is still awaited in a number of jurisdictions, we are now in a much better position to see the challenges the WBD poses for global employers.

This article looks at what those key challenges are and the unique support we can offer in helping global employers harmonize their global approach to managing whistleblowing reports within the prescriptive requirements of the WBD. For further practical insights into WBD compliance see our white paper “EU Whistleblowing Directive: Act Now to make your Whistleblowing Program compliant“.


Contents

  1. Implementation status and background to the directive 
  2. What key issues are we working with our clients on to address?
  3. How we can help

Implementation status and background to the directive 

Why was the EU WBD introduced?

Prior to the introduction of the WBD, protection of whistleblowers in the EU was fragmented, with some countries having no prior legislation in place. The WBD is intended to address the lack of uniform protection of whistleblowers in the EU, by requiring effective, confidential and secure reporting channels and effectively protecting whistleblowers against retaliation.

The WBD therefore requires member states to establish a framework to protect persons who report breaches of EU Law from retaliation. Member states can gold plate the WBD’s material scope so that it covers, for example, breaches of national law. Notwithstanding the laudable objective of the WBD to protect whistleblowers, the “framework” for doing so has resulted in prescriptive procedural requirements which focus on companies establishing local, entity level, internal reporting and investigation processes.

Current implementation status?

What key issues are we working with our clients on to address?

Internal reporting channels

Article 8(3) of the WBD prescribes that each legal entity in the private sector with 50 or more workers is required to establish channels and procedures for internal reporting. In the expert group minutes, the European Commission explains that there is no exception from this rule for group companies who have historically relied on central reporting channels operated by group functions.

This requirement poses two key challenges to global employers. The first one being, how this requirement can sit alongside a centralized group level reporting system (e.g., through a global “hotline”). Although it is clear that the requirement to establish internal reporting channels doesn’t prevent employers from maintaining and encouraging the use of their central reporting hotline, the requirement remains that a local, entity level, channel must be established for entities with more than 50 workers. This means employers who meet the threshold will need to establish local entity level reporting systems alongside existing global channels.

The second key challenge is, where companies have multiple entities in one jurisdiction, whether one internal reporting channel can be established at a country level or whether the channel must be established in each entity. The implementing legislation in some countries is unclear on this point but, where the requirement is for entity level channels, this raises challenges for companies which have multiple entities within a jurisdiction but only one HR or Legal function which operates across multiple entities.

Confidentiality and sharing group resources

Article 8(6) of the WBD explains that legal entities with 50 to 249 workers may share resources as regards the receipt of reports and any investigation to be carried out.

Article 16 of the WBD requires that the identity of the reporting person is not disclosed to anyone beyond the authorized staff members competent to receive or follow up on reports, without the explicit consent of the reporter. In some of the countries that have implemented the WBD to date, e.g., France, the confidentiality of the accused is also protected.

Whilst the WBD doesn’t explicitly say that companies with 250 or more employees (“large employers“) cannot use group resources for investigating reports, when Articles 8(6) and 16(1) are read together, the implication is that large employers must investigate reports at a local legal entity level (where the report has been filed locally). One reason for this is that the group investigations/compliance function for large employers is not considered “authorized” to receive and investigate reports – only the local entity channel is authorized. This creates risks of complaints of breach of confidentiality by the reporter (if consent is not obtained to escalate to group) and the accused (whose consent will often not be possible or practical to get). The confidentiality requirements of the WBD and the accompanying implementing legislation is generally the area which appears to theoretically attract the most severe sanctions, including criminal sanctions. Until regulators publish guidance or a pattern of enforcement emerges companies will have to pay strict attention to the requirements around confidentiality when implementing a reporting system in compliance with the WBD.

Differences with existing whistleblowing laws

Whilst many global employers will already have established advanced reporting and investigation programs which encourage a culture of “speaking up”, it is unlikely that these will be compliant with the requirements of the WBD. Some of the procedural elements will be relatively easy to build into existing programs – such as acknowledging receipt of a report within seven days and providing feedback to the reporter within three months, but the WBD requirements to establish a local internal reporting channel (and the related confidentiality requirements) go beyond requirements of similar legislation which already exists in the US or the UK. Employers will therefore need to consider whether they want to maintain a global approach to managing reports, which would put in place more onerous obligations in countries outside the EU than required by local laws or, alternatively, deviate from their global practices where necessary at an EU level.

How we can help

We have deep expertise in advising employers across the globe on key employment, privacy and compliance issues that arise when implementing whistleblowing policies, rolling out whistleblowing hotline systems, and handling whistleblowing-related complaints. We provide globally coordinated on-the-ground support, and we can help you benchmark your approach based on our combined experience of working with a wide variety of organizations in implementing whistleblowing regimes. Our support includes the following: 

  • Revising your internal compliance programs (The EU WBD will enhance the culture of crime prevention and detection within companies.)
  • Implementing of whistleblowing hotlines and global HR databases
  • Assessing privacy issues arising from the EU WBD
  • Building or enhancing your investigations protocols
  • Assisting your internal investigations, ensuring evidence is collected lawfully
  • Conducting independent and thorough investigations for serious allegations
  • Providing advice on potential disciplinary measures needed 
  • Training your managers and personnel on handling investigations
  • Litigation support

We can provide your company with a multijurisdictional analysis matrix covering five key areas of WBD compliance at a local level, to help you get started in planning your organization’s whistleblowing regime. For a fixed fee per jurisdiction, we offer jurisdiction-specific data sheets that provide answers to questions about the Directive’s scope and implementation requirements for internal procedures, protection of whistleblowers, and data privacy issues. Our experienced team of lawyers can then assist you with implementing the changes, as well as with training, communications and more.

For further information please send an email to EMEAEUWhistleblowingDirective@bakermckenzie.com

Click here to subscribe to our EU Whistleblowing Directive mailing list for more updates.

Author

Nicolai is a partner in the Dispute Resolution group of Baker McKenzie, a member of the Global Investigations, Compliance and Ethics Steering Committee and co-heads the Investigations, Compliance and Ethics practice in Germany. Nicolai is a regular speaker and author on compliance, white collar crime, innovation and legal tech topics. He is the inventor of the automated risk assessment and risk monitoring platform Compliance Cockpit and the founder of Global Compliance News. Nicolai is the editor of the knowledge platforms Compliance Lexikon and Litigation Lexikon.

Author

Margarita Fernández is a partner in Baker McKenzie's Madrid office. Marta has been with the Firm for 20 years, having joined the labor department of the Madrid office in 2002. As a member of the Employment Practice Group, Margarita specializes in employment-related matters. In September 2016, Margarita was seconded to a multinational company, where she provided assistance with the management of global employment matters and the implementation of global best practices to the group management team. Before joining Baker McKenzie, Margarita rendered services at the legal department of Grupo Generali. Margarita is an associate professor at University Carlos III, where she gives classes on international employment counselling. Margarita is a member of the Labor Lawyers Forum (FORELAB). Her keen interest in diversity and inclusion is reflected in the fact that she is also a member of the Women in a Legal World network, to promote female leadership in the legal world; a co-director of the SayAbility Working Group of FIDE, which focuses on the inclusion of people with disabilities in law firms; and part of the CEO for Diversity (CEO por la diversidad) alliance.

Author

Katja Häferer joined the Munich office of Baker McKenzie in January 2009. She is a member of the Firm’s European and Global Labor Law practice groups. She advises domestic and multinational companies on employment law matters, including outsourcing and other transactions. Katja frequently speaks at in-house and external seminars, and conducts training on a wide range of employment matters. She also practiced in the Firm’s San Francisco and Palo Alto offices.

Author

Ester Maza is a partner in Baker McKenzie's Madrid office, where she practices in employment law. Prior to joining the Firm in 2000, she worked as a legal adviser to Kronsa Internacional S.A. She has served as associate professor of employment law at Carlos III University Law School in Madrid since 2005. She also regularly lectures in several executive and post-graduate masters programs at different prestigious institutions. Ms. Maza has participated in the drafting and updating of various employment-related Ediciones Francis Lefèbvre publications. She also regularly contributes articles to specialized employment and HR-related journals.

Author

Christoph Kurth heads the Investigations, Compliance & Ethics practice of the Swiss offices. Further, he is a member of the EMEA Steering Committee Compliance & Investigations and co-leads the EMEA Financial Institutions Industry Group. He has been recognized by Legal 500 as a leading individual for compliance, regulatory and investigation matters. Before joining the Firm, Christoph was global head of Litigation & Investigations and general counsel in Asia for a large Swiss bank. For over 10 years, he has led complex regulatory and criminal investigations as well as high stakes litigation across the US, Europe and Asia, and has advised on transformational regulatory developments and wealth management products and services across Switzerland and Asia. In his roles, Christoph has worked closely with business leaders, government authorities and the media, navigating businesses through regulatory and other challenges. Prior to this, Christoph was a litigator in leading practices in Switzerland and the US. Christoph also teaches post-graduate courses in 'Crisis Management' and 'Risk Governance' at the Europa Institute at the University of Zurich.

Author

Monica Kurnatowska is a partner in the Firm's London office. She is a leading employment lawyer who is recognised by The Legal 500 and Chambers UK as a "highly respected, extremely impressive and an exceptional legal mind; she has a tremendous appreciation of the details." Monica is a member of the Consultation Board of PLC Employment Online and is a regular speaker at internal and external seminars and workshops.

Author

Julia Wilson is a partner in Baker McKenzie's Employment & Compensation team in London and co-chair of the Firm's Workforce Redesign client solution. Julia also leads the employment data privacy practice in London. Julia advises multinational organisations on a wide range of employment and data protection matters. She is highly regarded by clients, who describe her as a “standout” performer who "knows how we think." A member of the Firm's Pro Bono Committee, she plays a lead role in the Firm's pro bono relationship with Save the Children International. She also collaborates with Law Works to deliver employment law training to solicitors who provide pro bono advice to individuals. Julia regularly presents and moderates panels on podcasts, webinars and in-person events, is often quoted in mainstream media, and authors articles and precedents for a range of industry and other publications.

Author

Annabel Mackay has extensive experience of advising employers and employees on a range of complex employment issues. She has been ranked in Legal 500 and Chambers & Partners since 2015. Chambers & Partners 2019 report that clients describe Annabel as: "supremely impressive and technically brilliant while also being commercially astute and incredibly bright."

Author

Polly Mainds is an Associate in Baker McKenzie London office.

Write A Comment