New legislation on protection of whistleblowers
On 1 March 2019 Act no. 54/2019 Coll on Protection of Whistleblowers and on amendment of some acts came into effect (the „Act“), replacing the contemporary legal provisions of Act no. 307/2014 Coll on Some Measures Related to the Reporting of Anti-Social Activities. In this article, you will find out more about this field of law.
Reporting of anti-social activities or whistleblowing is an important instrument in the fight against corruption, fraud and other wrongdoings. In general, whistleblowing means reporting of a crime from within the subject, in which crime occurs. Despite widespread use of this tool internationally, it became the official part of our legislation just in 2014. Whistleblowing is an important factor in observance of law and preserving corporate culture and reputation of any company.
According to the lawmaker, the main reasons for adoption of the new legislation were practical shortcomings of previous practice resulting in low public awareness of current whistleblowing possibilities and lower degree of protection for whistleblowers. Whistleblowers often face negative impacts – bullying, discrimination i. e. New legislation aims to ensure maximum extent of confidentiality and secrecy regarding whistleblowing and provide extension to legal instruments of protection for whistleblowers.
Most important changes in legislation include:
• broader definition of “anti-social activity”;
• creation of new Office for the Protection of Whistleblowers;
• elements of increased protection of whistleblowers and new rights for whistleblowers;
new responsibilities of employers regarding internal system for review of reports.
New definition for anti-social activity
The new legislation aims to broaden the definition of anti-social activity. Previous definition is extended by criminal offences which may be committed by legal persons and now contains specific provisions of Criminal Code. The definition was also extended by administrative offences:
• for which a fine can be imposed in amount calculated by a specific formula and,
• for which a fine can be imposed in amount over 30,000 EUR (formerly 50,000 EUR).
Office for the Protection of Whistleblowers
A new independent state authority is established by the Act - Office for the Protection of Whistleblowers (the “Office”), which replaces the Labor Inspectorate in matters of supervision of whistleblower protection. The Office, contrary to the latter, now has expressly set responsibilities, powers and management. Apart from supervising whistleblower protection, the Office is responsible mainly for overseeing the observation of the Act, issuing expert opinions and methodical instructions, practical preparations, training and other. The Office is run by the chairperson elected by the National Council of the Slovak Republic for period of 7 years.
Extended protection and rights of whistleblowers
A new spectrum of rights for whistleblowers during criminal proceedings includes:
• right to inspect files;
• right to motion to observe evidence and to submit and add new evidence;
• right to file remedies against court ruling on cession of proceedings and against ruling on suspension of criminal prosecution;
• right to be informed on multiple occasions during criminal proceedings (e. g. on extension of charges, suspension and conditional suspension of criminal prosecution, adjournment of criminal proceedings and on several rulings of prosecutor with regards to his supervision).
Whistleblowers are further protected with regards to their employer as follows
• new legislation extends the period for filing a request to suspend the effect of employer’s legal act towards employee from 7 days to 15 days;
• It is no longer possible to file a remedy against consent (of the Office) to perform employer’s legal act; and
• the period of protection for whistleblowers no longer ends with conclusion of criminal proceedings, but rather 3 years after the criminal proceedings were concluded.
Internal system for review of reports
An employer who employs at least 50 employees (the “employer”) is obligated to appoint a person authorized to fulfill employer’s responsibilities in matters of internal reporting review (the „authorized person“).
The Act introduces a new pre-requisition for the position of authorized person in form of professional experience in fulfillment of statutory duty. The Act does not stipulate further, as to the nature of this requirement. Considering the nature of the position, the person should in our opinion be proficient in areas of compliance, HR and labor law.
The authorized person is set out to be significantly more independent in comparison to the status it had according to former legislation. Employers are obligated to provide sufficient conditions for fulfillment of authorized persons’ duties and mainly, to prevent conflict of interests. Employers are also explicitly obligated to cooperate with the authorized person and provide necessary tools for performance of their duty. The Act now also prohibits employers from penalizing the authorized person for performance of their duties.
The Act requires employer to appoint the authorized person as well as means of internal reporting, which must be made public to all employees. It is a statutory duty of the employer to accept and review each report within 90 days of accepting a report. This statutory period, however, may be prolonged by the employer by 30 days provided the reporter is given notice with reason for such prolongation. Employer is obligated to maintain confidentiality about each report. The Act authorizes the Office to impose a fine up to EUR 20,000 in case of breach of these obligations by the employer.
The employer is also obligated to issue an internal regulation, in which he sets out details on:
a) filing a report,
b) review of reports and powers of the authorized person during review of reports,
c) confidentiality on reporters identity,
d) record keeping of reports according to the Act,
e) giving notice to the reporter on results of review of his report,
f) processing of personal information stated in the report.
Last but not least, the new legislation requires employers to harmonize their internal system with requirements of the Act until 30 September 2019.
Conclusion: We see the adoption of the Act, in societal perspective, as a positive step and significant progress in this field. However, as the Act has been in force just for a short time, and the Office in not yet functional staff-wise or technical-wise and has not imposed any major fines nor made any important ruling, we can’t assess the results of changes. Nevertheless, in our view this is the right approach in fighting corruption and anti-social activity and will, hopefully, bring expected results.