EU set to propose legislation to protect whistleblowers

Author: Barry Walsh, Siobhán Lafferty

April 30, 2018

Whistleblowing and cases under the Protected Disclosures Act 2014 continue to raise important issues. Amid a backdrop of regulatory scandals, the European Commission is set to propose legislation intended to protect whistleblowers.

The Directive would create EU wide protection for whistleblowing on breaches of legislation in a variety of different fields including financial services, product safety, environmental protection and privacy and data protection. Those companies who have more than 50 employees, or an annual turnover of over €10 million, will have to set up internal processes to deal with whistleblowers’ reports.

Irish law already covers a number of issues for whistleblowers which are outlined in the Directive.  However, the proposed legislation would give those reporting on breaches access to legal aid and the reversal of the burden of proof whereby the organisation would have to prove that they are not acting in retaliation against a whistleblower.

Recital 77 of the Directive highlights the importance of penalties on retaliatory actions against reporting persons and notes that penalties can act as a deterrent. On the other hand, it is also recognised that penalties against those who make a false report are necessary to deter malicious reporting. The overall impact of such penalties is aimed not to have a dissuasive effect on potential whistleblowers.

The process of revising a Directive usually takes between 18 and 24 months. It remains to be seen how the legislation will look in its final form, and to what extent Member States will have discretion over certain issues, such as the types of sanctions which can be imposed. What is clear is that the protection of whistleblowers is at the heart of the legislation and is hoped to be strengthened across the EU – an issue which employers may have to come to grips with soon.

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