Whistleblower Law Planned For Europe

Earlier this year, the European Commission (EU) moved to build upon a variety of EU-wide whistleblower protection laws spanning areas including tax evasion, health, consumer protection, and nuclear safety. This concept of encouraging and protecting “whistleblowers” has long been part of the law in the United States, but not so in Europe. There, the notion of individuals reporting problems had to go against the current of authoritarian and fascist regimes that used people to report enemies of the state. This left a bad taste for many, but these concerns waned over time as new democratic governments have taken hold in Europe. The whistleblower concept has taken shape in recent years, but existing pan-European rules only cover specific sectors where policy makers added protection to beef up regulatory enforcement, such as financial services and environmental protection. National laws vary wildly on this subject, with only 10 of the 28 EU countries currently offering “full protection” to whistleblowers. The new whistleblower proposals would ensure all 28 EU members have the same rules. Also, companies with more than 50 employees or over €10 million in annual revenue will have to set up an internal procedure to handle whistleblowers’ reports. State, regional administrations, and municipalities with over 10,000 inhabitants will also be affected if the proposal becomes law. The proposed law must be ratified by the European Parliament and European Council to take effect, which is comprised of government ministers from each of the 28 member states. The legislation would be a directive, setting out requirements for the member states to incorporate into their national law, as opposed to a regulation that would apply directly across the block.

The proposed directive would give whistleblowers protected status, including the right to legal aid and possible financial support. Companies would be banned from firing or demoting whistleblowers and face “dissuasive” penalties for seeking to block employees that try to uncover wrongdoing.  EU member states would be responsible for deciding on details, such as the type of sanctions, in domestic legislation. The draft law will be revised by EU governments and the EU parliament, a process that usually takes 18-24 months. Although the law will only come into force after the UK leaves the EU, the British government may find the whistleblower protections to be core EU standards that it must respect in order to secure a far-reaching trade deal.