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A Guide to the EU Whistleblower Directive

A Guide to the EU Whistleblower Directive

A Guide to the EU Whistleblower Directive

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Whistleblowers have long played a crucial role in exposing wrongdoing, corruption, and illegal activities at corporate and even government level.

Think about the groundbreaking actions of individuals like Frank Serpico, the first officer to expose corruption in the US police force, to the more recent efforts of former Theranos employees who uncovered serious deficiencies in the blood-testing startup. No matter which country you are reading this from, it's probable that your nation has witnessed a whistleblower story making front-page news.

So let’s get into it. In some jurisdictions, whistleblowers are protected by specific laws. According to the National Whistleblowers Center, whistleblower regulations have been enacted in at least 59 countries around the world. However, the agency has stated that without national laws, whistleblower protection can fall short.

Amnesty International’s stance on whistleblowers is that those who uncover corruption and human rights violations “must be able to reveal the truth to the public without fear of retribution and criminal sanctions.” In short, and in an ideal world, whistleblowers should not be punished for exposing truths that ultimately benefit us all. Whistleblower law should facilitate for the protection of persons.

To protect these brave individuals or groups, and to encourage transparency, the European Union introduced the EU Whistleblower Directive. The aim of the directive is to create a minimum standard of acceptable protection within EU member states, where previously the strength of regulations may have been considered varied. Let’s dive into the topic more and explore what whistleblowers do and how the EU directive may impact your company.

What Is a Whistleblower?

A whistleblower is an individual who exposes information about or evidence of wrongdoing, misconduct, or illegal activities within an organization, government agency, or private company. In the United Kingdom, the act of whistleblowing or bringing a matter to competent authorities is also referred to as “making a disclosure”.

Whistleblowers play a crucial role in promoting transparency and accountability, as their disclosures often lead to investigations, legal actions, or the correction of unethical practices.

Let’s look at a fictional example. Pauline works as a quality control manager at a pharmaceutical company. She discovers that the company has been cutting corners in its manufacturing processes, resulting in potentially unsafe medications making it to market. Pauline is deeply concerned about the potential harm to patients and the company's unethical behavior. Despite internal pressure to keep quiet, she decides to blow the whistle. She gathers evidence of poor manufacturing practices, such as falsified quality control reports, and reports her concerns to the appropriate regulatory authorities and the media.

Her actions lead to a thorough investigation, legal consequences for the company, and, ultimately, improved safety standards in the pharmaceutical industry. Pauline's courageous decision to blow the whistle helps protect public health and hold the company accountable for its wrongdoing.

Irrespective of the sector, there is a consensus that individuals with valid concerns and evidence of misconduct should be encouraged and even incentivized to come forward. In fact, there are programs in place to reward such actions. For example, in the US, the Internal Revenue Service has a hotline and gives monetary pay packets to whistleblowers in return for certain valuable information.

According to the UK government, to be covered by national whistleblowing protection, the disclosure must be a ‘qualifying disclosure’ such as a criminal offense, a miscarriage of justice, a danger to health, or environmental damage.

The EU Whistleblower Directive

So what is the EU Whistleblower Directive about? The directive, which came into effect in December 2021, provides a legal framework for whistleblowers and obligates organizations to establish mechanisms and channels for reporting anonymously.

It defines a whistleblower as follows: “Persons who work for a public or private organization or are in contact with such an organization in the context of their work-related activities...”

You could say that it is aimed at equalizing the safeguards provided to whistleblowers in EU member states. It effectively establishes a baseline standard for whistleblower protection, ensuring that individuals who come forward with information regarding wrongdoing are granted a fundamental level of support from legal entities. By doing so, it endeavors to create a more equitable and just environment for those brave enough to expose misconduct and corruption.

In order to push through legislation in countries where there had been delays, the European Commission actually referred eight member states to the European Court of Justice for “failing to communicate measures fully transposing the directive.”

Germany was one of the nations to have their knuckles proverbially rapped. However, on July 2, 2023, Germany brought through the Whistleblower Act which carried out the transposition of the EU Whistleblower Directive into national law.

Under the act, which is focused on companies with 50 employees or more and public entities, anyone found in breach of the law can face fines of up to €50,000.

You can keep on top of developments regarding whistleblower law in Europe with this handy EU Whistleblower Monitor.

On February 15, 2023, the Czech Republic, Germany, Estonia, Spain, Italy, Luxembourg, Hungary, and Poland were referred to the European Court of Justice for failure to comply with the EU directive.

Let’s look into the main talking points of the EU Whistleblower Directive, and how flair has embraced this directive by creating an anonymous reporting feature for managers and employees alike.

The Directive’s Impact on Companies

The EU Whistleblower Directive potentially has significant implications for companies operating within EU law. Failing to comply with the directive's requirements can result in penalties and legal consequences. Here is how the regulation may broadly affect your business:

  1. Compliance Obligations:
  • Companies must develop and implement internal whistleblowing procedures that meet the directive's standards.
  • Compliance includes ensuring the protection of whistleblowers, preserving their anonymity, and establishing effective internal reporting channels.
  • Organizations should give clear instructions to potential whistleblowers on how to report issues externally and to the right authorities.

2. Anti-Retaliation Measures:

  • Employers must create and communicate clear policies against retaliation, making it explicit that whistleblowers are protected from adverse consequences like dismissal.

3. Reporting Infrastructure:

  • Companies should invest in secure, confidential reporting systems to facilitate the reporting of breaches and protect whistleblowers.
  • According to the directive, each organization, whether private or public, can choose how people can report breaches or disclosures. They should allow reports in writing, through mail, or online. People can also report by talking on the phone. If someone wants to meet in person to report, the organization should make that possible within a reasonable timeframe.

Whistleblower Protection With flair

In light of the EU Whistleblower Directive and the increasing emphasis on whistleblower protection in Europe and around the world, flair offers a valuable feature to support organizations in complying with new regulations. In addition to being GDPR compliant, we know how important it is to enable whistleblowing reports in accordance with the law.

flair as well as being GDPR compliant benefits from robust Salesforce data protection. Your data is stored in the country where your company's headquarters is located. For example, if your organization is based in the UK, your Salesforce instance will also be hosted there.

The whistleblower protection tool is part of our ticketing software, also known as the HR Helpdesk. This feature arrives as an important EU Whistleblower Directive deadline looms.

As of December 17, 2023, EU countries must ensure that private companies with 50 to 249 employees set up internal reporting channels for their workers. With flair’s HR Helpdesk, employees, managers and HR teams benefit from a structured support framework.

This ticketing software provides a centralized, internal channel that enables organizations to efficiently manage and track HR requests, inquiries, issues, and tasks submitted by employees and other stakeholders. These requests are typically organized into tickets for easier monitoring and resolution. When an employee or manager submits a ticket internally, they receive an email receipt of the report or ticket and its completion status.

The HR Helpdesk makes it easier to highlight HR requests and promotes collaboration among HR team members. For example, complex issues can be assigned to a group of experts who can work together to provide comprehensive solutions. This collaborative approach ensures that even the most challenging HR problems are addressed effectively.

As well as providing whistleblower protection, the HR Helpdesk is centralized, accountable, and reliable. Store all internal HR queries and responses on a single platform. Tag ownership of important HR tasks. As your workforce grows, ticketing scales with demand

Within the HR Helpdesk is an important whistleblower function, which allows companies to set up an internal procedure that complies with the EU directive. Under a Safety & Compliance field, the reporting person can choose to anonymize their work-related tickets or comments they send to management. It’s a function for the protection of privacy. Teams or individuals working with flair ticketing software can safely report any issue, whether in the private sector or public sector, knowing that flair allows them to comply with the whistleblower directive.

Directive Evaluation 2025

To conclude, the harmonization of protections across the European Union strengthens the rights of whistleblowers on paper. But the true impact of the EU Whistleblower Directive will become clearer in years to come.

Its success is likely to depend not only on the legislative framework but also on the commitment of member states and organizations to effectively implement and enforce these protections. The directive has the potential to be a crucial tool in promoting transparency and accountability, but its full realization will require ongoing vigilance and evaluation.

In December 2025, the European Commission plans to compile a follow-up report to evaluate how the directive has worked and consider whether additional public interest measures are required.

As an end-to-end HR platform, we're always working to create innovative solutions that help make HR smart and compliant for your company, no matter the industry. For a glimpse of what we're working on, or to make a neat suggestion, visit our Product Roadmap.


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