[author: Jan Stappers LLM, WhistleB, A NAVEX Company]
On 9 June 2022, NAVEX hosted the 2022 European Risk and Compliance Virtual Conference, in which industry leaders and experts came together to discuss all the latest news, trends, updates and challenges surrounding company compliance, whistleblowing and ESG.
Effective December 2021, EU countries are required to transpose the rules and regulations within the EU Whistleblower Protection Directive into their national laws. The aim of the Directive is to set rules for organisations to provide clear whistleblowing communications to employees, protect whistleblowers and enhance their speak up options through various reporting channels. For the U.K., this will become the U.K. Whistleblowing Bill.
Below is a summary of the main points that were discussed throughout the three whistleblowing talk tracks of the virtual conference.
EU Whistleblower Directive: The Global Impact on Organisations
Speakers: Sameena Ali-Khan, News Anchor, ITV News Central; Andy Noble, Head of Whistleblowing National Westminster Bank PLC (NatWest); Anna Geraci, Group Senior Audit Manager, CCB Management Services GmbH
Why is a hotline important and how can companies expand on the requirements of the Directive?
Whistleblower hotlines are good for everybody, especially the employees – giving an equal opportunity to make inquiries or report misconduct. Having a hotline in place ensures employee voices are heard and that they can speak up when they wish. Overall, this helps to create a better working environment. In addition, the company can learn about misconduct and people’s concerns early on – before reports are made outside the company to external sources. A whistleblowing line shows that a company takes the Directive rules seriously and abides by them. Everybody wants to work for a company that does the right thing.
However, the Directive’s requirements are just the minimum standard and companies are welcome to take the rules further if needed. Communicating that a company has a whistleblowing framework and hotline in place is one way of doing that. A communication strategy must fit across a wide variety of different people. Included, should be where employees can go to make reports or inquiries, and the kind of topics that are being raised – which, in doing so, will lead to more reports on the same kind of topic. The Directive has widened the types of situations that people can report and employees, including people within the supply chain and potential job candidates, should be made aware of that too.
What needs to happen to stop employees (including remote employees in other countries) from retaliation if they make a report?
Many employees who want to speak up may worry about the impact blowing the whistle will have on their current job, future opportunities, and professional relationships.
To stop this happening, it needs to be made clear to employees what the investigation process involves once a report is made. Investigation reports need to remain closed, and names made anonymous in all written reports, even if the employee has made a non-anonymous or face-to-face report. The whistleblowing team investigating reports need to have the right skill set and training in place It also needs to be made clear to the employee, that they must not tell anyone they have raised a report, and to keep it confidential, to avoid negative retaliation from others.
Another step, taking the Directive further than minimum standards, would be to introduce a whistleblower risk assessment that looks for triggers and risks against the person raising the report. For example, is it obvious who the whistleblower is or if they are particularly anxious about retaliation. Communicate to the reporter about those factors and how to tackle them.
But what happens if the whistleblower is in another country? In this case, companies need to go above and beyond to proactively communicate. In addition, with the whistleblower’s permission, companies may organise a confidential place or individual in the whistleblowers local area that the person can speak with if they are feeling particularly anxious or worried. Another option is to implement an employee support programme.
It is worth reminding employees that most people who raise reports do not see negative impacts to their career. Cases with positive outcomes rarely never the news, and the publicity from negative outcomes may scare would-be reporters off.
How can companies instill trust about the whistleblowing programme with employees?
Communication is key to instilling trust with the workforce. It only takes one whistleblowing report to go wrong or get out externally for trust to be broken.
Company-wide surveys to discover employees’ main whistleblowing concerns and tailoring internal marketing campaigns to be open and transparent about the whistleblowing investigation process is a great start. Getting the tone right from the senior leaders is also essential, as is communicating these values to employees on a global level – such as in town hall meetings. Investigators should also follow up with reporters to assure them along the way.
The Proposed UK Whistleblowing Bill
Speakers: Andy Verity, BBC Correspondent, BBC, Lesley Wann, General Counsel and Whistleblowing Officer at FBN Bank UK (Limited); Alison Crotch-Harvey, Manager at Grant Thorton; Georgina Halford-Hall, CEO, WhistleblowersUK
What is wrong with the current system that the new U.K. Whistleblowing Bill will direct and address?
Corruption is an important problem of our time. Most whistleblowers will only make a claim about something they feel strongly about, and the new U.K. Whistleblowing Bill will help to provide more clarity around the steps that need to be taken to do that. People need to feel confident and trust the system, especially for a whistleblower who is just trying to do the right thing.
In addition, the new bill will put in place fines, penalties and sanctions that are meaningful. One of the highlighted areas is that people who blow the whistle want something to be done. They usually want something to be done to protect the people around them. Often, it is not about themselves. The new bill will turn the complexities of ‘am I am worker, am I not a worker,’ that often happen in court, on its head and make every employee and citizen protected. The bill is not there to punish people using sanctions but to drive positive behaviour throughout society.
What should someone do if their organisation currently has no whistleblowing process?
It is currently mandatory for financial serves to have a whistleblowing procedure, but all companies should really have one. It is the fundamental right of an employee to raise concerns. If companies have a trusted Head of Compliance, the employee should go to them to raise a concern, if not, go to the general counsel. Some companies may not be aware that it helps to fix a problem internally. If someone were to go external or down the tribunal path, it can have massive reputational consequences for that organisation. However, if people want to raise a report externally, due to the lack of internal procedures, they can do so by taking legal advice from a lawyer or contacting a whistleblowing charity.
How can the new bill improve the perception of whistleblowers?
Firstly, companies don’t recruit troublemakers and stats show that whistleblowers expose 45% of all crimes that come to light. It also takes 50% less time to solve those crimes because of the information provided by whistleblowers. That is a huge win for any organisation.
Some of the negative stereotypes are driven by the press, and because it is reported in the press, people only read the few negative stories where people have had bad experiences. The U.K. Whistleblowing Bill should remove all the stereo typing from reporters, as raising concerns about misconduct will be seen as a professional obligation in response to the new law. This is because Whistleblowers are usually people with a professional obligation, potentially even written in their contract. People are just responding to the laws because that’s what keeps the public safe.
It is in everyone’s interests for issues to be raised and for companies to have a chance to fix them. Some people may be motivated for their own reasons, but ultimately, everyone has a duty to protect the public. Employees must do the right thing.
In addition, The U.K. Whistleblowing Bill is mandatory because company cultures across the U.K. need to improve. The bill is essential due to the clarity it will bring to the public when it comes to understanding their whistleblower rights. Criminal sanctions on leadership members are important because it is their job to protect employees, the public and do the right thing. If they are not, then there should be sanctions.
Legal Practicalities of The EU Whistleblowing Protection Directive
Speakers: Jan Stappers, Whistleblowing Specialist at NAVEX; Alexander Möller, Partner, SKW Schwarz; Natacha Lesellier, Partner, Flichy Grangé Avocats; Karolina Kanclerz, Partner, PCS Littler
This track of sessions covered some specific updates from a few countries in the EU. While many other EU members are in various stages of transposing the Directive into their laws, there are several lessons others can learn about the process and challenge other countries are facing.
What is the existing legislation in France, Germany and Poland?
France: Whistleblowing is not a new concept in France. Since 2017, France has had the Sapin II Law, which was mostly focused on anti-corruption, though it also included an obligation for companies employing over 50 staff to put into place a whistleblowing policy. However, even before then, there have been different ways employees could speak up on unlawful activity in companies. The new law, since 21 March 2022 is a result of the EU Directive.
Germany: Like most EU countries, Germany did not transpose of EU Directive before the December deadline. The current draft, which was published early April, is comparable to the draft that was published 18 months ago. The content is not so new. However, since its release there have been over twenty legal opinions and recommended alterations put forward.
Poland: Poland also did not meet the deadline for the transposition of the EU Directive, currently, there are only whistleblowing regulations in the financial sector. Standard companies are not obliged to have any internal regulations. In October 2021, the government posted an initial draft bill, so many people expected the transposition to be on time. However, this draft received a huge amount of negative feedback. In April, the old draft was replaced by a new, better, one.
How much further has France gone beyond the Directive?
France went beyond the minimum standards of the directive, perhaps due having existing whistleblowing laws. The French parliament decided to take the rules within the EU directive and apply them to all violations in both the French law and the EU law. The idea was to simplify, as to not create two systems. However, there are still various whistleblowing procedures which exist under French law which haven’t been brought under the new law.
There were debates whether HR grievances, until the directive, count as whistleblowing reports. They now are, and that is a major change and settlement. Until now, in companies, whistleblowing would just mostly cover financial matters, fraud, anti-corruption and complaints were handled by compliance teams under the Sapin II law. HR rules were covered by the French Labour Code. Everything is now under the same procedure.
What is left to do?
France: Companies already compliant with Sapin II are going to have to update their whistleblowing procedures. Now, businesses must open the whistleblowing system to business partners and employees of business partners, and the scope as to what can be reported is now wider. No matter how minor the situation may be, you can make a report. Whereas before, it was only major and serious violations that would be reported. Previously, staff could only raise reports externally if the employer did not respond to the original report. Now, employees can raise an issue at any time to outside authorities because of the Directive and companies have an obligation to inform the workforce of this change.
Germany: Currently, in Germany, it is still unlawful to report a whistleblowing case. Unlike the whistleblowing law, where reporters are immediately protected, in Germany, reporters must prove they are telling the truth. Therefore, there is still a huge change within the whistleblowing culture needed. Reports of misconduct need to be considered as something that helps the company to improve, not a detriment to the business.
Poland: In the old draft, punishment, for all types of wrongdoing, was in uniform for different things. It was suggested there would be the same penalty, of up to three years in prison, for failure to introduce internal regulations, retaliations etc. In the new draft there are now gradient penalties for different wrongdoings. However, in cases such as anonymous reporting, the rules remain unclear, as in the new draft, that section has been deleted.
As the Directive is transposed by the EU member states, and expansion on whistleblower protections for countries that choose to do so are codified, there are many considerations companies must make to maintain compliance.
To learn more about how the NAVEX One platform can help your company keep up to date with the new EU Whistleblowing Directive laws and requirements. Click below
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