Are you preparing for the new Whistleblowing rules?
21 December 2021
Current state of play
The EU Whistleblowing Directive aims to protect whistleblowers when making an extensive range of disclosures on breaches of EU law, including in areas related to public procurement, financial services, the protection of the environment and public health.
The deadline for transposing the Whistleblowing Directive into national law was 17 December 2021.
Belgium (together with the vast majority of EU member states) has not met this deadline. Only a preliminary draft Belgian act has been produced on which the National Labour Council and Central Economic Council have provided their advice. Further governmental discussion is expected to take place in January 2022. At this point, the Belgian act is not expected to enter into force before the summer of 2022. At the same time, smaller companies with more than 50 but fewer than 250 employees would have an additional two years to set up internal reporting channels.
Key takeaways from the Directive
For organisations, the main compliance challenge will be setting up internal reporting channels, or reviewing those already in place to ensure that they meet prescriptive EU standards. This must be done following consultation and in agreement with the social partners, where provided for by national law.
In addition to this internal whistleblowing reporting process, EU Member States must implement an external whistleblowing reporting process where whistleblowers may contact the competent authorities.
All persons who had reasonable grounds to believe that the information they have reported falls within the scope of the Directive and was true at the time of its reporting, are protected against retaliation. A wide range of acts have been classified as retaliation under the Directive. The Directive also reverses the procedural burden of proof in certain circumstances. This will increase the risk of litigation, underlining the need for all decisions affecting whistleblowers to be properly documented and objectively justified.
Strategy and employee information process
In anticipation of national implementation, you can start determining your whistleblowing strategy now. Although finalising your policies and practices will have to wait for the relevant national legislation to be implemented, the minimum requirements are already clear.
Start by using a checklist to diligently work through all necessary requirements.
An important tool will be working out the appropriate documentation, including revisiting and assessing any existing whistleblower policies and related training materials. You can already consider the appropriate reporting channels and procedures for internal reporting and follow-up, and assess your preference for a third-party reporting channel or an in-house system.
You will also need to involve the appropriate employee-representative bodies. You can start setting up and preparing for these discussions now.
You will need to determine the rollout of the system and how to properly inform and train all workers and stakeholders on the new whistleblowing process.
As a final note, you will need to be conscious of the interplay of these requirements with the data protection regulations, and make sure that any processing of personal data is carried out in accordance with GDPR.
Impact on internal investigations
A number of developments have caused Belgian companies to increasingly consider (or forced Belgian companies to consider) internal investigations when compliance issues are reported and the manner in which they should proceed. This trend is clearly going to accelerate following the adoption of the Whistleblowing Directive and its imminent Belgian implementation.
Workplace investigations have become increasingly common in recent years due to a shift in society towards encouraging a professional “speak-up” environment, including the #metoo and #BlackLivesMatter movements. Nowadays, we also see that Belgian companies are actively introducing Environmental, Social and Governance principles into their corporate governance practices, and that ensuring a healthy workplace is also relevant from an employer-branding and investor-attraction perspective.
Accelerated in particular by the imminent legislative protection of whistle-blowers and the increased compliance pressure from a broad range of stakeholders, organisations in all sectors will be expected to set up and implement internal reporting channels in line with the EU prescriptive standards. As a result, they will need to be able to rely on appropriate internal systems to deal with such reporting and improve their compliance programmes accordingly and will be exposed to an increased risk of litigation.
Relevant for all sectors – including the financial sector
Currently, there are already specific whistleblowing regimes that exist for the private sector in Belgium. For example, a whistleblowing regime exists for reporting infringements under the financial laws and regulations supervised by the FSMA. Another example is the Anti-money laundering Act, which imposes a duty on entities such as financial institutions to allow for staff members, agents and distributors to report breaches of the obligations under this Act.
Hence, financial services institutions are already well versed in dealing with whistleblowing regimes.
However, the Directive applies to all entities in the financial sector. This means that these entities could be subject to two separate whistleblowing regimes, with different rules, and possibly different authorities. The National Works Council and the Central Economic Council raised this issue with the legislator when reviewing the preliminary Act, and have underlined the need to further consult the sector.
Please reach out to your Allen & Overy contact if you require assistance.