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The new Whistleblowing Directive: What do UK firms need to know?

October 25, 2021

The Whistleblowing Directive (2019/1937) is coming into force in all EU Member States in December 2021. The Directive recognises that whistleblowers can play a key role in the enforcement of key areas of EU law – as workers are often the best placed to know if a company’s practices are not compliant with its legal obligations.

Whilst the EU Directive will not be implemented in English law as such  following the UK’s exit from the European Union, its scope is such that businesses who operate in the EU will have to ensure they have the necessary measures and procedures in place to be compliant.

The current legislative framework in the UK (the Public Interest Disclosure Act 1998 and the Employment Rights Act 1996) does afford a level of protection to whistleblowers, including the right not to be subjected to detriment or be unfairly dismissed because of them making a protected disclosure. Under English law, a protected disclosure will occur where a worker or employee makes a disclosure of information which, in their reasonable belief, is made in the public interest and tends to show that wrongdoing has occurred, is occurring or is likely to occur.

The increase in workers and employees blowing the whistle during the pandemic, particularly regarding insufficient or inexistent Covid measures, or misuse of the furlough scheme, has meant that many employers are reviewing their existing practices and procedures relating to whistleblowing.

The new EU Directive aims to protect those who blow the whistle about potential breaches of EU law in specific sectors such as financial services, consumer protection, public health or privacy and personal data amongst others. The scope of who is protected is wider than that of current UK law: the directive aims to protect whistleblowers independent of their employment status, to include all those who “find themselves in a position of economic vulnerability in the context of their work-related activities”. As such, those who are self-employed, volunteers, or trainees, are all covered by the directive, as are facilitators, and those who are connected to the whistleblower and could suffer retaliation – such as colleagues and family members. Unlike English law, there is no requirement that the disclosure made should, in the reasonable belief of the whistleblower, be in the public interest.

In addition, the identity of the whistleblower will be protected. As part of the internal procedures the directive requires companies to put in place, channels of information must be set up to ensure the confidentiality of the identity of the whistleblower and any third party mentioned, with only authorised staff members having access to this information.

The Directive requires companies with more than 50 employees to put in place confidential and secure internal reporting channels. Disclosures must be acknowledged within 7 days. The Directive also requires the company to provide feedback to the whistleblower within 3 months regarding the actions envisaged or taken as a follow-up to the disclosure.The scope of this directive is such that any company with operations in the EU should ensure they are compliant with their obligations under the Directive. This includes UK businesses, and businesses operating globally who want to ensure they have a single framework for dealing with whistleblowing.

The staged implementation period means that only companies with 250 employees or more will be subject to the obligations set out in the Directive from December 2021. Employers with more than 50 but less than 250 employees will have until December 2023 to comply.

It is useful to note that each Member State may also choose to “gold plate” the measures in due course, offering even greater protection than is provided in the Directive – for example, extending the protection to cover national law as well as EU laws. Businesses operating in the EU should ensure that they are up to date with the national laws of any Member State they may be operating in, and make changes to their whistleblowing policies as appropriate.

The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for your specific circumstances and before any action is taken.

@ Miller Rosenfalck LLP, October 2021