Whistleblower protection – what it means and what it entails for businesses.
The draft bill on whistleblower protection has already passed its first reading in parliamentary committees. The deadline for submitting the report has been set for 21 May. The prospect of the bill being passed is therefore becoming increasingly real, and it is worth familiarising yourself with the key assumptions of the draft in order to answer the question: what will whistleblower protection consist of and how might it affect the activities of entrepreneurs?
Who is a whistleblower?
A whistleblower is a person, usually from within an organisation, who, having knowledge of irregularities in the operations of that entity or its individual units, decides to report them. This may involve activities that violate the law, e.g. practices targeting consumers – the weaker party in economic transactions – or posing a threat to the environment. However, they may also target the interests of the business itself, e.g. theft of the business's property by its employees or contractors.
The concept of a whistleblower often has negative connotations in the public perception and is sometimes associated with an informer. However, it should be noted that the concept of reporting irregularities is not solely about informing law enforcement authorities. From the perspective of EU regulations and the draft Polish law, the internal organisational path for investigating irregularities occurring within the entrepreneur's operational activities is equally important.
Irregularities occurring within an organisation are usually difficult to detect. Often, without information from a whistleblower, detecting and investigating such practices would be impossible or very time-consuming.
As whistleblowers are often individuals acting alone against a well-functioning machine, the EU legislator has recognised that protecting whistleblowers from retaliation is crucial to the effective functioning of this institution. Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law aims, on the one hand, to institutionalise the reporting of breaches in key areas of law; on the other hand, to provide effective protection to persons reporting these irregularities in order to encourage them to report practices that have a negative impact on the functioning of the organisation or result in a breach of law.
Scope of whistleblower protection
Whistleblower protection means prohibiting retaliatory measures against whistleblowers, attempts to take such measures, or even threatening whistleblowers with such measures. The proposed definition of retaliatory measures, in accordance with the guidelines set out in the Directive, is very broad. Any direct or indirect action or omission in a work-related context, directed at a whistleblower, caused by the whistleblower's report, which infringes or may infringe the whistleblower's rights or may cause him or her unjustified harm, may be considered retaliatory action.
The following, for example, may be considered retaliatory measures:
- refusal to establish or termination of employment
- omission from promotion
- negative performance appraisal
- reduction in remuneration, or
- omission from selection for training, and even
- exclusion from a specific team or project.
As can be seen from the above examples, from the perspective of the draft whistleblower protection bill, retaliatory actions may affect various aspects of employment. Furthermore, it should be remembered that the list of behaviours considered retaliatory indicated in the draft is open-ended. In practice, therefore, it may turn out that actions of superiors not listed in the whistleblower protection bill may also be considered harassment of the whistleblower due to the irregularities reported by them.
As a rule, the Polish legislator has not provided for a specific procedure for whistleblowers to pursue their claims. In this respect, the relevant provisions of the Labour Code will apply. For example, if a whistleblower's employment contract has been terminated, they will be able to pursue their claims by appealing against the termination on the terms provided for all employees in this respect.
The only, but significant, difference will be that the burden of proof will shift to the employer to demonstrate that the organisational measures taken against the whistleblower were not retaliatory in nature. In a ‘normal’ case of an employee appealing against dismissal, the employer must prove the validity of the reasons for dismissal. The burden of proof rests with the employee only to the extent that he or she claims that the real reason for the termination was different from that indicated in the document handed to him or her. In proceedings initiated by the whistleblower, the entire burden of proof will rest with the employer – the employer will have to prove not only that the reason for the dismissal is true, but also that it does not constitute retaliation.
This is why it is so important for businesses to be prepared organisationally. The processes for handling reports of irregularities should be sufficiently watertight to be able to demonstrate that all organisational decisions relating to whistleblowers were made independently of those reports. In this case, it may be advisable to separate the units handling the reports organisationally or to outsource these processes outside the organisation.
All HR processes related to, for example, employee evaluation, promotion or selection of employees for training should also be tightened up. However, tightening up the process should not only consist of proper planning of the process, but also of reliable compliance with it in practice. Daily practice in this area often does not reflect the picture resulting from the procedures adopted in the organisation. An example of this is the overestimation of employees' performance, which often does not reflect an assessment of their actual competences or commitment. Such conduct may make it difficult in the future to prove that the organisational measures taken against the whistleblower were objective in nature and not directed at the whistleblower because of their role in the ongoing investigation.
In addition, the whistleblower will be entitled to compensation or damages for the harm suffered as a result of the retaliatory measures. In the current version of the draft law, the minimum amount of compensation is set at one times the average salary. This is slightly more than in the case of ‘ordinary’ discrimination against employees or mobbing, where the minimum compensation is one times the minimum wage. This seems to be inconsistent with the regulations currently in force.
It is worth following the fate of the draft in this regard. Originally, the level of minimum compensation proposed by the legislator was to be equivalent to twelve times the average salary. It can therefore be expected that this amount may still evolve in the course of work on the draft.
Who will be covered by the protection?
The protection of whistleblowers begins as soon as they make a report. At that moment, the whistleblower gains full protection under the law. However, this protection is not granted unconditionally. At the time of making the report, the whistleblower must have reasonable grounds to believe that they are reporting a violation of the law and that the information provided is true. If this is not the case, e.g. the ‘whistleblower’ makes a report in bad faith solely to obtain protection against expected dismissal, they will not be granted such protection.
Regulations concerning the protection of employees will also apply accordingly to persons employed in a similar capacity on the basis of civil law contracts (including within the framework of individual business activity). Protection will also cover persons assisting the whistleblower in making the report and persons associated with the whistleblower, and even legal persons or other organisational units assisting or associated with the whistleblower, in particular if they are owned or employed by the whistleblower.
Such a broad scope of protection results from the minimum guarantees provided for in the Directive. However, it may have far-reaching practical consequences. Therefore, it will be essential for businesses to be properly prepared organisationally to implement the new solutions.