Whistleblower Protection Directive finally implemented
On 20 June 2024, the President signed the Whistleblower Protection Law. After more than two years of work to transpose EU legislation, Poland finally implemented the whistleblower protection standards of EU Directive 2019/1937.
Presented below are the crucial aspects of the whistleblower protection law.
Definition of whistleblower and whistleblower protection
The purpose of the Whistleblower Protection Act is to provide whistleblowers with legal protection against retaliation, thereby ensuring the protection of the public interest. A whistleblower should be understood as an individual who reports or publicly discloses information about a breach of the law obtained in connection with work, broadly defined, for private or public entities.
Whistleblowers may include:
- workers or temporary workers,
- persons providing work on a basis other than a contract of employment, including a civil-law contract, e.g. a contractor,
- proxies,
- members of management or supervisory body of a corporation or an unincorporated organisational unit,
- shareholders or partners,
- persons working under the supervision and direction of contractors, subcontractors and suppliers,
- entrepreneurs, e.g. B2B subcontractors,
- interns, apprentices or volunteers,
- officers of e.g. the Police, Internal Security Agency, Border Guards, Central Anti-Corruption Bureau
- soldiers.
Whistleblower protection consists of a prohibition on retaliation, including threats of retaliation and attempts to retaliate against the whistleblower. Companies will be required to provide protection for whistleblowers and to implement safeguards and procedures to ensure such protection.
The Act provides that the following forms of retaliation against whistleblowers are prohibited (without limitation): refusal to hire, termination of employment, reduction of wages, transfer to a lower level, harassment, discrimination or adverse treatment, passing over for or withholding of promotion, transfer of the whistleblower’s duties to another employee, or suspension from employment or business duties.
In principle, the whistleblower is subject to protection from the moment of making a report or public disclosure. Importantly, the whistleblower may be subject to protection only after certain conditions have been satisfied. Namely, to enjoy the protection, the whistleblower must have reasonable grounds to believe that:
- the information to be reported or publicly disclosed is true at the time of reporting or making the public disclosure and
- it is information about a breach of law.
It should be noted that the protection afforded to whistleblowers also applies to a person before the establishment of an employment or other legal relationship that forms the basis for work or the provision of services or the exercise of functions in or for a legal entity, and even if that relationship has already ended.
Right to compensation and redress
A whistleblower against whom retaliatory measures have been taken is entitled to compensation in an amount not less than the average monthly wage in the national economy in the previous year, as published for pension purposes in the Official Journal of the Republic of Poland (Monitor Polski) by the Head of the Central Statistical Office, or to a remedy.
It is also important that if a whistleblower knowingly reports or publicly discloses false information and someone suffers loss as a result, that person is entitled to compensation or redress from the whistleblower who made such a report or disclosure.
Making reports
A report made by a whistleblower may take the form of:
- an internal report – made in the manner provided for in the internal reporting procedure and addressed to an internal organizational unit or person authorized by a legal entity to receive internal reports;
- an external report – addressed to representatives of external authorities such as the Ombudsman or public authorities;
- a public disclosure – made available to the public through e.g. the press, the Internet or television, provided that this form of report should be made as the last resort.
Companies can also allow whistleblowers to make internal reports anonymously. The procedure for handling information about breaches of law reported anonymously should be adopted internally within the organization.
Subject of reporting
A whistleblower’s report contains information about a breach of law. Information about breaches shall be construed as information, including reasonable suspicion, about actual or potential breaches that have occurred or are very likely to occur in the organization in which the reporting person has been involved in recruitment or other negotiations prior to the conclusion of a contract. This also applies to an organization in which she or he works or has worked, or with which the reporting person is or was in contact through his or her work. A report may also apply to information about attempts to conceal breaches.
A breach means an act or omission which is unlawful or intended to circumvent the law. It should be emphasized that the legislator included a closed list of breaches, in which measures were indicated relating to the following:
- corruption,
- public procurement,
- services, products, financial markets,
- prevention of money laundering and terrorist financing,
- product safety and compliance,
- transport safety,
- protection of the environment,
- radiation protection and nuclear safety,
- food and feed safety,
- animal health and welfare,
- public health,
- consumer protection,
- protection of privacy and personal data,
- security of network and information systems,
- the financial interests of the Treasury of the Republic of Poland, local government units and the European Union,
- the internal market of the European Union, including breaches of Union competition and State aid rules, as well as breaches relating to the rules of corporate tax,
- constitutional freedoms and the human rights and the rights of citizen – occurring in the relations of the individual with public authorities and unrelated to the areas indicated above.
It should be noted that companies may also provide for the possibility of reporting violations of the company’s internal rules or ethical standards through an internal reporting procedure. In this case, the provisions on internal reporting and public disclosure will apply.
Obligations for entrepreneurs
It needs emphasizing that the whistleblower protection procedures need to be mandatorily implemented by companies that employ at least 50 wage earners. This number is established as at 1 January or 1 July each year.
Importantly, the number of 50 people who perform paid work for a legal entity includes:
- full-time employees,
- persons performing paid work on a basis other than employment, if they do not employ other persons to do such work on any basis.
The Act imposes a number of obligations on those entities that are obliged to implement the whistleblowing system, including:
- implementation of internal whistleblowing procedures,
- maintaining the register of reports,
- setting up confidential channels for receiving reports,
- appointing an entity responsible for receiving reports and conducting internal investigations,
- ensuring easy access to information about internal reports.
Internal reporting procedure
Undoubtedly, the major obligation imposed on companies will be to develop an internal reporting procedure. This document lays down the rules for reporting breaches of law and follow-up measures, such as the investigation proceedings.
The procedure should define in particular:
- the manner of reporting breaches,
- the entity responsible for receiving the report,
- the entity authorized to take follow-up measures,
- they way to handle anonymous reports,
- the maximum time limit for providing feedback to a whistleblower.
Importantly, the procedure must be safe and easily accessible. It must also guarantee reliable verification of reports received, and provide for adequate preventive measures.
Sanctions for breaches
Failure to comply with or improper compliance with the obligations imposed by the Act is punishable by a fine, restriction of liberty or imprisonment for up to one, two or even three years, depending on the nature of the offence.
In particular, if the applicable internal reporting procedure is not implemented, a fine may be imposed on the person responsible for its implementation in the organization concerned.
The legislator has also provided guarantees to minimize abuse of the protection by potential whistleblowers – if a whistleblower makes a report or public disclosure knowing that no violation has occurred, he or she will be punished with a fine, restriction of liberty or imprisonment for up to two years.
Implement the new regulations together with Andersen experts
The regulations on whistleblower protection will enter into force 3 months after their publication in the Journal of Laws, except for provisions on external reporting, which will take effect 6 months after their publication. As a result, entrepreneurs do not have a lot of time to implement the planned changes.
The assistance provided by Andersen experts in implementing the whistleblower protection regulations includes:
- Audits – preliminary auditing of the procedures in place and identification of potential risk areas;
- Procedures – preparation of procedures that comply with whistleblower protection regulations and are tailored to the needs of individual Clients;
- Implementation – support in preparation of documents in overseeing the implementation process;
- Internal training – familiarizing staff with the procedures in place and providing separate training for managers.
We encourage you to contact Andersen experts who will support you in the process of adapting to the solutions and assistance in preparation of the relevant procedures.
KONTAKT
E: magdalena.patryas@pl.Andersen.com
T: +48 32 731 68 84
M: +48 502 392 419
