On April 23rd, the European Commission adopted a proposal for a directive on the protection of whistleblowers reporting breaches of Union Law.[1]

The proposal sets out minimum standards of protection for whistleblowers against retaliation when they report breaches in specific policy areas.  The proposal is premised on the view that the lack of a common, effective approach to whistleblower protection across Member States can impair the enforcement of European law.[2]

Currently whistleblowers do not enjoy an equal level of protection across Member States, with many countries having no dedicated legislation at all.  Similarly at the European level, whistleblower protection is provided only for reports relating to specific areas of law, such as financial services, financial interests of the Union, data protection and protection of the environment.[3]

With the new proposal, the European Commission suggests taking a broader approach, enhancing whistleblower safeguards in a variety of areas both in the public and in the private sector, such as public procurement, anti-money laundering and counter terrorist financing, transport safety and public health.  The proposal will have to be separately discussed by the Parliament and the Council, who will then adopt their respective positions and start the negotiations to agree on a final text.  There is currently no timeline for its adoption.

The Scope of the Proposal

The proposal, titled “Proposal for a Directive of the European Parliament and of the Council on the protection of persons reporting on breaches of Union Law,” seeks to broadens the protection of whistleblowers.  The proposed Directive would prohibit retaliation against any persons who reported information that was acquired “in a work-related context.”  The persons covered by the protection include self-employed workers, volunteers, unpaid trainees, contractors, subcontractors, suppliers and any person working under their supervision.  The reporting protected in the proposal includes potential breaches affecting the financial interests of the Union, product and transport safety, environmental protection, corporate tax law or the rules preventing money laundering and terrorism financing.[4]

The proposed directive would apply to legal entities in the private sector with 50 or more employees or with an annual business turnover or an annual balance sheet of Euro 10 million or more and to private legal entities of any size operating in the area of financial services or vulnerable to money laundering or terrorist financing.  In the public sector, the legal entities covered by the proposal include state administration, regional administration and departments, municipalities with more than 10.000 inhabitants and entities governed by public law.

Finally, the Commission’s proposal covers not only the reporting of acts or omissions contrary to these Union laws, but also of acts or omissions that impair the object or the purpose of the law.

Reporting procedures

The Commission’s proposal contemplates that private and public legal entities would have to implement procedures for reporting and following-up on reports.  Such procedures would include:

  • designated channels able to ensure the confidentiality of the reporting person and allowing written reports in electronic or paper format and/or oral reports through telephone lines;
  • the designation of a person responsible for following up on the reports in a reasonable timeframe (not exceeding three months);
  • clear and easily accessible information on the reporting channels.

The proposal also provides that Member States would have to designate independent and autonomous authorities competent to receive reports.  These authorities would have to put in place specific channels, separate from their standard public complaints systems and dedicated staff, professionally trained to handle and follow up on reports.[5]

Anti-retaliation measures

The Commission’s proposal would offer protection to whistleblowers whenever they have reasonable grounds to believe that the information reported was true at the time of reporting.

The same protection would apply also to persons publicly disclosing information—for example through web platforms, social media or newspapers—after they first reported internally or to the designated public authorities, or they could not reasonably do so due to imminent or manifest danger for the public interest or to the particular circumstances of the case.

Member States would have to protect whistleblowers against any form of retaliation, including dismissal, demotion, discrimination, failure to convert a temporary employment contract into a permanent one, failure to renew or early termination of a temporary employment contract or blacklisting on the basis of a sector or industry-wide informal or formal agreement.  In case of a judicial proceeding, it would be up to the person taking action against a whistleblower to prove that the detriment was based on duly justified grounds.

The proposal also gives to Member States the possibility to introduce further measures to safeguard whistleblowers, such as legal and financial assistance and support in the framework of legal proceedings, other than the ones already provided by Union laws for persons in criminal and cross-border civil proceedings.[6]

[1] Proposal for a Directive of the European Parliament and of the Council on the protection of persons reporting on breaches of Union Law (COM(2018)218), available at https://ec.europa.eu/info/files/proposal-directive-european-parliament-and-council-protection-persons-reporting-breaches-union-law_en.

[2] See the Explanatory Memorandum.

[3] For an overview of the existing European rules on whistleblower protection, see Annex 5 to the Proposal.

[4] For the complete list of areas covered, see Article 1 of the Proposal.

[5] See also the European Commission Fact Sheet, available at http://europa.eu/rapid/press-release_MEMO-18-3442_en.htm.

[6] See Directive (EU) 2016/1919 of the European Parliament and of the Council of 26 October 2016 on legal aid for suspects and accused persons in criminal proceedings and for requested persons in European arrest warrant proceedings and Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters.