Employers Must Protect Whistleblowers Under ‘Ambitious’ New EU Laws

New EU laws will strengthen employers’ duties regarding the protection of whistleblowers across EU member states, including the UK.

The new directive announced by the European Commission aims to strengthen protections for employees who report company wrongdoing, and will require large UK employers to install a three-tier reporting system for staff, including internal channels, a process for reporting to regulators and, in cases of overriding public interest, reporting to the media.

Under the new legislation, the rights of employees who expose internal wrongdoing will be safeguarded, with clear guidelines offered regarding protocol and legal rights when voicing their concerns.

Meanwhile, employers will be strictly required to provide staff with clear channels for reporting and will carry the burden of proof in proving that any action taken against informants is not retaliatory and thus illegal discrimination.

Individuals will be legally protected in reporting wrongdoing across ten key areas of company practice, including any violations of EU law regarding tax evasion, public procurement, consumer protection and data security.

Speaking in favour of the changes, Nicholas Aiossa of the Transparency International EU anti-corruption campaign group, says the new directive for whistleblower protections is “an ambitious text” that marks “a big day” for employment rights in this area.

UK companies must provide internal channels of reporting

Britain currently has one of the most advanced legal protection systems for employee whistleblowers in Europe, with detailed advice for employees seeking to expose professional wrongdoing published by the government.

At the moment however, as noted by the European Commission, UK law only recommends that employers implement internal whistleblowing channels rather than insisting upon it.

The new EU law will leave employers with no ‘wiggle room’ in providing staff with defined channels and procedures for reporting any untoward activity within the company.

Employees will first be directed to address concerns internally with employers before approaching authorities.

However, in cases where it is reasonable to suspect that internal resolution systems would fail or that there is collusion between the company and the regulatory authority, then the new law will advise employees to go directly to outside authorities or in extreme cases, the media.

Free legal advice and temporary relief will be mandated for individuals who face discriminatory employment action on the basis of their claims.

‘Game changer’ reform creates uniform laws for all employers in Europe

The bill comes in the wake of the Volkswagen ‘dieselgate’ emissions scandal and the Cambridge Analytica data privacy scandal – the latter of which came to light from employee reporting – and is described by EU justice commissioner Vera Jourová, who led the effort to put together the proposed law, as “a game changer.”

Europe-wide whistleblower protections currently vary widely, with Ireland ranking first in the EU for safeguarding informing employees and only 10 of the 28 member states offering any specific legislative protections.

Now, all European companies with over 50 employees or an annual turnover exceeding $10m will be subject to the same, stringent laws under which whistleblowers are afforded a protected legal status.

Suelette Dreyfus of advocacy group Blueprint for Free Speech says the reform represents a “bold step forward with global ripple effects for compliance. So many companies have tendrils in Europe now.”

In some senses, the measures will act to widen the power of EU law itself, by using whistleblowers as individual watchdogs to ensure that companies are internally adhering to EU law.

European Commission vice president Frans Timmermans echoed this sentiment, stating of the new directive:

“We need to make sure our laws are worth the paper they are written on. Protecting whistleblowers who report suspected breaches of EU law is one way of doing this.”

Despite Brexit, the UK is likely to comply with the new measures as part of an exit deal, in order to ensure regulatory alignment with the single market.

Public authorities covering over 10,000 residents will also be affected, with public companies having a legal duty to respond to internal reports of wrongdoing within three months.

Issues relating to national security will not be covered by the new laws, per the EU’s agreement to leave matters of national security to the domestic constitutions.

Expert employment law advice for employers

Our employment law experts provide advice on the employment aspects of all major business decisions including redundancies, tribunal claims, TUPE, contracts and policies, and international legal management services. For advice, please call our experienced lawyers on 03456 381381 or email your details to employment@ibblaw.co.uk.