This is what the Whistleblower Protection Act means for your organization

Reporting wrongdoing has taken off in recent years. Since 2019, there has been a new European directive relating to the protection of whistleblowers. In connection with the implementation of this directive, the House for Whistleblowers Act was amended into the Whistleblower Protection Act (“Wbk“). The Wbk partially entered into force on February 18, 2023. The purpose of Wbk is to better protect reporters of wrongdoing.

What does the new law mean for your organization?

Employers are more quickly required to establish an internal reporting procedure (whistleblower policy)

An employer with at least 50 employees was already required to establish an internal reporting procedure for abuses. Under the Wbk, the term “employee” has been broadened. As a result, employers are under an earlier obligation to set up an internal reporting procedure. The term ’employee’ now includes anyone who performs work for you as an employer in a subordination relationship for remuneration. Thus, in addition to employees who are employed by you, temporary workers who work for you also count. The same applies to volunteers and trainees, provided they receive compensation for their work.

In principle, if you generally employ fewer than 50 people, you are not legally required to have an internal reporting procedure. But of course you may. This internal reporting procedure does not have to meet all legal requirements.

Note: Some organizations are required to establish an internal reporting procedure even if they have fewer than 50 employees. These are organizations working in financial services, products and markets, prevention of money laundering and terrorist financing, civil aviation, maritime labor and port state control, and offshore oil and gas activities.

Stricter requirements are placed on the internal reporting procedure

The Wbk sets stricter requirements for the internal reporting procedure than the previously applicable House of Whistleblowers Act. In any case, the internal reporting procedure must be open to your employees, temporary workers working for you, and interns and volunteers, provided they receive compensation for their work. You may also open this procedure to others, such as freelancers, shareholders, those who assist a reporter (e.g., confidential advisors) and family members of the reporter.

There are also a number of new rules that must be established in the internal reporting procedure:

• The internal procedure must also be open to reporting violations of European Union law, which will henceforth qualify as wrongdoing.
• A reporter must receive an acknowledgement of receipt within seven days of receiving their report.
• Within a reasonable period of no more than three months after sending the acknowledgement of receipt, you must provide the reporter with information about the assessment and how the report has been or will be followed up (if applicable).

In addition, the following new requirements apply under the Wbk:

• As an employer, you must give all people who work for you written or electronic information about:
  • your internal reporting procedure;
  • how to report suspected wrongdoing, including violations of Union law, outside the organization to competent authorities;
  • the legal protection of employees (such as the prohibition of prejudice by you as an employer after reporting suspected wrongdoing or infringement of European law).
• You must keep the reporter’s identity confidential, unless the reporter gives permission for their identity to be disclosed. You must ensure that your staff also comply with this duty of confidentiality.
• You must properly record notifications by keeping a register set up for that purpose.

Extension of prohibition on approach

Under the Wbk, more people are protected from adverse consequences when reporting suspected wrongdoing. Not only employees are protected, but anyone who performs “work-related activities.” Thus, self-employed workers, temporary workers, volunteers, shareholders, suppliers, (sub)contractors and job applicants are now also protected. Consequently, the prohibition of disadvantage is now regulated in the Wbk itself – and no longer in Book 7 of the Civil Code. Those who assist the notifier and third parties involved are also protected under the Wbk. They may not be disadvantaged during and after the handling of a report of suspected wrongdoing.

Reversal of burden of proof

Previously, the reporter had to prove that he was disadvantaged by a report of suspected wrongdoing he had made. Under the Wbk, the notifier only has to prove that he reported with reasonable grounds and that he was disadvantaged. The Wbk is based on the presumption that the disadvantage resulted from the report or disclosure. Thus, the burden of proof regarding the connection between the disadvantage and the report has shifted to the employer. It is now up to the employer (who took the disadvantageous measure) to prove that the disadvantage was not the result of the report.

Indemnification in legal proceedings

In addition to the prohibition of harm, the Wbk also offers protection to reporters, those who assist them and third parties involved, against the use of legal proceedings. To make the report, the notifier may have been guilty of breach of the duty of confidentiality, prohibited information acquisition, defamation, copyright infringement, disclosure of trade secrets, breach of confidentiality or violation of personal data protection. If the legal conditions are met, they cannot be held liable for this. One condition includes that the reporter had reasonable grounds to believe that the report or disclosure was necessary to disclose wrongdoing. Also, the reporter must have reasonable grounds to believe that the information reported was accurate.

Again, there is a shift in the burden of proof. The person bringing the action against the reporter must prove that the challenged acts were not necessary to disclose the breach.

Abolition of mandatory internal reporting

Previously, there was an obligation in principle to report suspected wrongdoing internally first, unless this could not reasonably be required of the reporter. Under the Wbk, it is no longer obligatory to first report suspected wrongdoing internally (to one’s own employer). Even if a reporter reports directly to an external reporting channel (the House for Whistleblowers or another competent authority), he is entitled to protection.

When should you update your whistleblower policy by the latest?

For employers employing at least 250 people, the new rules will have immediate effect. This means that as of Feb. 18, 2023, these employers should have an internal reporting procedure that meets the requirements of the Wbk.

Employers with 50 to 249 employees will not have to comply with the new requirements of the Wbk until December 17, 2023.