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Entrepreneurs and businesses are waiting for the guidelines on implementing internal procedures to protect whistleblowers. How will they be finalised?
The deadline for transposing the provisions of the EU Directive on the protection of persons who report breaches of Union law into national law passed on December 17, 2021, but work on the Polish bill is still in progress. In practice, does this mean that whistleblowers can already count on the protections?
What are the facts about the disclosure of malpractice by whistleblowers?
The scale of economic malpractice in enterprises is growing year over year, and this is a trend observed not only in Poland but worldwide. The role of whistleblowers can be invaluable because information provided by them can minimise financial losses resulting from malpractice and protect the reputation of an organisation.
What is the current legal status?
Directive 2019/1937 of the EU Parliament and of the Council of October 23, 2019 on the protection of persons who report breaches of Union law entered into force on December 17, 2019 thereby imposing an obligation on member states to introduce minimum requirements for the protection of whistleblowers. By setting minimum conditions, the Directive establishes common standards to ensure a high level of protection for whistleblowers and thus provides the opportunity for individual EU countries to set requirements stricter than those set out in EU law.
Nearly two years after the adoption of the Directive, the long-awaited draft of the Polish regulation is now on the legislative track. The draft act to a large extent covers the requirements set out in the Directive, but in effect extends them by introducing, inter alia, the ineffectiveness of termination of an agreement with a whistleblower and new definitions, such as: a person associated with a whistleblower, a central authority or a public authority.
What is the result of the project?
The draft sets out a catalogue of areas within which the occurrence of irregularities entitles a person - whistleblower - to submit a report with employers left with the right to expand it.
The draft also assumes the necessity to establish an internal procedure regulating, inter alia, the submission and processing of reports. However, the adoption of such a regulation should be preceded by consultations with trade union organisations or employee representatives.
It is important to note that a whistleblower will be subject to legal protection only if he/she acts in good faith, i.e. has reasonable grounds to believe that the information he/she provides is credible and concerns a violation of law. Retaliatory actions against the whistleblower, the associated person and the person supporting the report’s submission are prohibited.
The project gives businesses the opportunity to set up group reporting channels; employers with up to 249 employees, among others, can take advantage of this possibility.
The proposed regulation also provides guidance for penalties. Persons obstructing reporting, taking retaliatory action, breaching confidentiality obligations, submitting false reports and those responsible for failing to implement awhistleblowing system face fines, restrictions of freedom or imprisonment of up to three years.
What are the legal consequences of non-implementation of the Directive?
While some legal issues are relatively clear, due to the lack of implementation of the Directive, others issues are left uncertain and often vague.
Undoubtedly, entrepreneurs can rest assured for the time being that it is not possible to be held criminally liable for failing to implement an internal procedure for reporting violations of law and taking follow-up action, or more broadly for obstructing a report, retaliating against a whistleblower, or breaching the whistleblower's confidentiality. These solutions are envisaged only by the Polish draft implementation act, not the Directive itself.
As far as other issues are concerned, the situation is not so clear. As a rule, directives are not directly binding in member states, and therefore require implementation, i.e. a local law transposing the solutions provided for in the directive. At the same time, the CJEU jurisprudence is consistent with the view that the direct application of directives is permissible if a member state has missed the deadline for implementation (or has implemented it incorrectly), and the rights of individuals require protection. At the same time, for a directive to be directly applicable, its provisions must be unconditional, sufficiently clear and precise.
At least some of the Directive's provisions can be considered to meet the above criteria and be suitable for direct application. In any case, this direct application can only have a vertical effect, i.e. it will allow citizens to invoke the Directive against Poland, but not against other individuals, legal entities or organisational units (in which case there would be a horizontal effect).
In practice, this most likely means that:
- whistleblowers will not be able to effectively invoke the provisions of the Directive in disputes with employers;
- public entities may be obliged to accept external reports from whistleblowers despite the lack of implementation of the Directive;
- possible claims for the lack of implementation of the Directive (e.g. in connection with the lack of legal protection for whistleblowers) should be directed against the Polish State.
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