Basic elements of the Compliance policy in the workplace. Part 2 Whistleblowing

This article is a continuation of the article on Compliance in the workplace, published on April 21, 2021 (link: https://www.dudkowiak.pl/blog/prawo-pracy-podstawowe-elementy-polityki-compliance-w-miejscu-pracy.html ) and aims to introduce the issue of Whistleblowing. One of the elements of a well-constructed Compliance policy is the protection of the so-called whistleblowers. Whistleblowers are employees or persons cooperating with the employer who decide to react to the found violation after discovering or learning about irregularities in a given workplace.

1. Whistleblowing

Whistleblowing is not officially defined yet, but the term is used to report or disclose information about any misconduct or abuse that occurs in the workplace. Whistleblowers may make reports or disclosures both within the workplace (e.g. by informing the employer or the relevant employer’s department about the breach) and outside the workplace (e.g. by reporting the breach to the competent authority) or the public. Whistleblowing is one of the most effective „tools” in exposing irregularities in the workplace, and therefore there is an increasing demand to protect whistleblowers.

This attempt was made by the European Parliament and the Council of the European Union, which on October 23, 2019 adopted the Directive on the protection of persons reporting breaches of EU law (2019/1937). This directive is primarily aimed at ensuring the proper application of EU law, showing what issues should be considered in the above-mentioned context, and also ensuring protection for persons reporting violations, including in particular eliminating the possibility of the so-called retaliation by the employer or other employees, which may take the form of termination of the contract, discrimination, degradation, suspension of promotion, reduction of salary, change of working hours or mobbing. Importantly, in the event of a whistleblower filing an action for compensation for damage he suffered as a result of retaliatory actions, the burden of proof that the damage did not arise is transferred to the defendant, i.e. the person who retaliated (e.g. an employer or another employee).

To sum up, the abovementioned directive determines a certain minimum standard of protection which the member countries should apply, which does not prevent from setting of a higher standard of protection. Moreover, the aforementioned legal act also contains guidelines that should be followed by entrepreneurs when creating an appropriate procedure for reporting irregularities or violations of the law. Thanks to a well-prepared procedure, the entrepreneur can avoid disclosing information outside, which can undoubtedly protect him from loss of reputation and the related to this – financial losses. An important element of such procedure is directing employees to use internal reporting channels in the first place, and not to go to the appropriate authorities immediately, which gives the employer the opportunity to investigate the matter on their own and take appropriate remedial actions at an early stage. Therefore, introducing a properly structured reporting procedure for reporting irregularities or violations of the law in the workplace is worth considering.

A properly prepared procedure should include, inter alia, provisions on:

1. whistleblowers protection;
2. protection of personal data of the whistleblowers and the persons accused of breaching and maintaining confidentiality in the event of revealing the identity of the abovementioned persons;
3. the content of the notifications;
4. ways of receiving notifications that will protect the identity of whistleblowers;
5. methods of handling received notifications, with particular emphasis on issues related to the clarification of the case, informing the whistleblower about each stage of the proceedings, eventually also provisions concerning the appointment of an internal unit / body responsible for handling the case;
6. type and nature of follow-up activities;
7. informing whistleblowers about the follow-up activities taken;
8. appointing and determining the scope of duties of a person responsible for supervision over the entire process;
9. information on the possibility of submitting notifications “outside the workplace” to the competent authorities or institutions;
10. general issues applicable to internal documents, such as the date of entry into force, period of validity, amendment procedure, method of informing employees about the implementation of the procedure (the employer should inform employees about the procedure being adopted in a clear and easily accessible manner, generally accepted in the workplace).

2. Whistleblowing in Polish regulations.

Currently in Poland, the only act that directly regulates the problem of Whistleblowing is the Act of July 13, 2018 on counteracting money laundering and financing of terrorism (hereinafter: the AML), however, this act deals with the abovementioned issue only in the context of money laundering and the financing of terrorism. According to the AML provisions, entrepreneurs who are so-called obligated institutions within the meaning of the above mentioned act (e.g. brokerage houses, financial institutions, accounting offices, tax advisors) are obliged to create and implement a procedure for anonymous reporting actual and potential violations in the area of counteracting money laundering and financing of terrorism.

It should be emphasized that the greatest “weakness” of AML in the context of the Whistleblowing issue is its subjective scope, as it imposes obligations only on those entities that meet the definition of obliged entities, and not on all entities. It should be also added that there are new bills that try to regulate issues related to Whistleblowing, although there is a clear lack of legislation which would comprehensively solve the above issues, taking into account all entrepreneurs.

3. Summary

Whistleblowing, although not yet officially defined, is becoming an increasingly popular phenomenon, and the protection of so-called whistleblowers is gaining in importance, as evidenced, for example, by the Directive introduced by the European Union or actions taken by the Polish legislator. Therefore, every rational employer should take care to implement appropriate solutions in the field of reporting irregularities or violations of the law, which will undoubtedly contribute to improving working conditions and increasing employee confidence, and may also protect the employer from possible losses.