On December 17th this year, a new law concerning whistleblowing comes into force applicable to all private and public workplaces with at least 50 employees. The act has its origins in the EU directive adopted in autumn 2019. The purpose of the new legislation is to strengthen the protection for whistleblowers and to regulate how organizations process cases and ensure a safe channel for whistleblowing.
Listed below are some of the main features of the new legislation applicable to private sector employers with 50-249 employees.
In short, the new legislation means that it must be possible to whistleblow either verbally or in writing and it should be possible to remain anonymous. The process should allow for a dialogue with the whistleblower and ensure that he or she remains anonymous. Furthermore, the whistleblowing process must be designed so that it can categorise cases, assess whether the case is in fact a whistleblowing matter and if so, make suggestions for handling the case.
The recipient of a whistleblowing case must be independent. This can be ensured by the appointment of an independent entity or persons, by the employer or by the appointment an external party acting as a whistleblowing function. There should be an instruction for the whistleblowing function as well as a process for how a case should best be handled and in which cases it needs to be investigated further. Put simply, the path for whistleblowing should proceed as follows:
The documentation requirements are that the internal reporting channels and all parts of the procedures must be documented in writing. The documentation of the entire whistleblowing function shall include;
Benefits of a well functioning whistleblowing process
There are economic, organisational and cultural benefits to establishing a well functioning whistleblowing process, where potential abuse can be identified at an early stage.
“strengthening and clarifying the protection of whistleblowers (i.e. those reporting misconduct) improvement of psychosocial work environment, a tool for the early detection of errors and deficiencies in operations, reduced risk of a damaged brand and other financial business risks. Strengthened confidence in the business operations of employees, customers, suppliers, owners and the general public. Increased protection for whistleblowers can create better workplaces.”
Article 19 of the EU Directive requires Member States to take necessary action to prohibit any form of retaliation against whistleblowers. This is further developed in Article 23, which states that Member States shall provide for effective, proportionate and dissuasive sanctions for physical or legal persons who obstruct or attempt to obstruct whistleblowing and for those who take retaliating action.
The Swedish law states that anyone, who violates any of the prohibitions against taking obstructive measures for reporting misconduct or against retaliation shall pay damages to the whistleblower for the loss that occurs and for the violation that entails.
What else applies to sanctions in supervision is not currently clear, but it will be clarified when the government appoints supervisory authorities via the regulation procedure.
In conclusion, the new law clarifies the protection of whistleblowers and how organisations shall establish and operate the whistleblowing function. A well functioning whistleblowing function often has many positive effects for an organization and there are therefore several incentives for your organisation to start making adjustments internally to your whistleblowing process now to be ready for when the new legislation comes into force in July 2022.
Nils Ludvig Kulling
CEO Periculo AB
Periculo continuously monitors the development of regulatory changes in its compliance and risk management work. We also offer training on regulatory matters, e.g. on new capital adequacy rules. Visit our website for more information, www.periculo.se
Sources are listed above in the respective footnote and also in Law & Agreement, an article on whistleblowing (2020-09-17)