World@Work: Managing whistleblower disclosures and other workplace complaints in 2022

Stephen Woodbury:
Hello and welcome everyone to our first World@Work podcast for the year. My name is Stephen Woodbury and today we are looking at an area of great interest for many employers, that being the regulation and protection of whistleblowers. That is, people wanting to make a complaint or bring information to light about a person or organization, which usually detrimentally affects that person or organization.

Stephen Woodbury:
And we'll be looking at recent legal developments in the area and the issues which employers need to be mindful of when dealing with this law complaint. And as always, joining me to take us through the area from their perspectives are Andreas Mauroschat from Frankfurt, Cristina Grande from our Madrid office, Muriel Pariente from Paris, Crowley Woodford from our London practice and Karen Mitra from Singapore.

Stephen Woodbury:
Before turning to our panelists, I'll just touch on a few issues from Australia where we've had new whistleblower laws in place since 2019. And an issue that we've seen arise quite frequently concerns protection of the whistleblower's identity and the impact of that on conducting an investigation. And essentially this issue can arise where an employer is investigating a complaint and they're seeking not to disclose a whistleblower's identity, but they do so in the course of the investigation because they disclose information that may lead to the identification of the whistleblower.

Stephen Woodbury:
For example, because the information was only known to that particular person, or they were the only person present at a particular incident. Now, an employer can actually disclose information of that nature where it is reasonably necessary in order to investigate the matter and the employer has taken all reasonable steps to reduce the risk that the whistleblower will be identified as a direct result of the disclosure.

Stephen Woodbury:
But what we've found is sometimes an employer finds it quite tricky in navigating precisely that issue and has a lack of understanding or appreciation as to the confidentiality that is required and the sensitivity of dealing with the information that is available. Similar issues have also arisen in relation to external whistleblowing receipt technology, which sometimes has not been configured appropriately in order to generate responses for dealing with whistleblower complaints in a timely manner when they have been made, or they're not tailored appropriately.

Stephen Woodbury:
And that has often led to reports not being managed correctly or in a timely manner. And finally, we've also seen, particularly in relation to whistleblowing complaints relating to historical matters, that the absence of data or challenges in obtaining data or records in relation to those historical matters have been quite challenging from the perspective of then conducting an investigation, and often led to employers not being proactively dealing with these issues and anticipating them leading again to delays and complications in actually managing the substance of the whistleblowing complaint itself.

Stephen Woodbury:
Now with that, it's time to turn to Europe and many of our listeners will be aware of the introduction of the new EU whistleblower directive in December 2021 and the fact that European countries are now looking to implement the directive under their own laws. So it's instructive to see what the new directive provides and how countries are grappling with it. And I'll start with Germany and ask Andreas whether you can give us a bit of an overview of the directive and the attitude of the German government so far to it.

Andreas Mauroschat:
Thanks Stephen, happy to do that so let me start with a quick run through the key points of the directive. It's indeed groundbreaking in some aspects, will change the legal landscape as regards whistleblowing. Generally it provides just the minimum standard of protection for whistleblowers who report breaches of the EU law. That's important. The directive just covers breaches of EU law.

Andreas Mauroschat:
National laws may obviously gold-plate this and many member states have done that to cover also breaches of national law. It will apply on a broad scale to all companies, after expiry of certain grace periods, who have more than 50 employees. They must all establish a whistleblowing system and set up a dedicated internal resource that will be handling any complaints coming through. It has a very wide scope of application for protection of whistleblowers, so the systems must be open to anybody with a work-based relationship to the company.

Andreas Mauroschat:
So that is interpreted wide and covers employees, subcontractors, suppliers, shareholders, and basically any party that could be viewed to have a work-based relationship. The reporting channels must be secure and allow for oral and written reports, so that will probably require a professional system that's used, internet-based. We all know the players on the market but it's probably not possible to meet the requirements with something really homemade.

Andreas Mauroschat:
Then obviously the core point is protection of whistleblowers against any form of retaliation. There's the obvious retaliation, of course, dismissal, suspension, any other measures, disciplinary measures, but it also covers any covert form of retaliation, so saying bad things on social media or the like. And of course it will have teeth. The member states have to impose effective penalties and sanctions for any company that doesn't play and doesn't establish a system, or then doesn't effectively protect the whistleblowers.

Andreas Mauroschat:
You also mentioned that governments are sort of grappling with it and that's correct, in particular for us in Germany. We haven't yet implemented the directive so we're facing an infringement proceeding because of that. And we expect that our new government will get this implementation act out in the course of Q2, Q3 at the latest.

Stephen Woodbury:
Thanks, Andreas. That's very interesting. And we might actually turn now to Spain and Cristina just to see how the Spanish government has been dealing with it. Now I understand they might be a bit more advanced than the Germans on this one.

Cristina Grande:
The point is that in Spain, the transposition of the directive has not been implemented yet. So now there is just a preliminary draft of the whistleblowing law approved by the Council of Ministers at the beginning of March. It would be probably sent to a parliament as an urgent law. However, this is very difficult to estimate when the new law will be enact, but as per our experience it would run to about four or six months.

Cristina Grande:
The main differences included in this preliminary draft would be that it imposes the obligation to set out internal information systems, irrespective of the number of employees, to all political parties, trade unions, employers, organizations, and foundations, whenever they have received public funds. It also extends the protection of informants and against retaliation not only to informants, but also to any individual connected to informants, such as other work colleagues or relatives.

Cristina Grande:
Also, extends the protections to candidates in selections procedures and to former employees. It creates independent authority for the protection of the whistleblower as an independent political body, who will be the one managing the external communications channel. It will also impose sanctions and evaluate the reduction of any sanction. And it could also decide to terminate the investigation.

Cristina Grande:
Concerning the penalties, the preliminary draft establishes that in case of breaks of the obligations, the administrative fines will run from 100,000 euros for minor offenses, 600,000 euros for serious ones and one million euros in case of very serious offenses when the funder is a legal entity. In case of individuals, administrative fines run from 5,000 euros to 300,000 euros.

Cristina Grande:
Finally, we need to bear in mind that accessory fines could be also imposed in case of very serious offenses, such as public reprimands or provision for obtaining subsidies or tax benefits. And also, for example, the provision from contracts with the public service.

Stephen Woodbury:
Thanks, Cristina. It's very interesting. It's good to see sort of a progression from Germany up to Spain. You've got proposed legislation and now we'll turn to Paris and in France, Muriel, the French I understand, have decided to extend their existing laws by the transposition of the directive. Is that right?

Muriel Pariente:
Yes, that's right, Stephen. Firstly, concerning the legislation process, it's important to say that the law transposing the directive was implemented 10 days ago. It was in 20 March 2020 so it's really recent in France and will apply from 1 September 2022. Prior to the publication of the directive, French law provided that disclosure only concerned the commission of a crime, an offense, the failures and manifest breach of international obligations, or the threat of serious harm to the public interests.

Muriel Pariente:
The new legislation on whistleblower is even more binding than the directive, as it has significantly extended the material scope of the report. Now the slightest breach of any employer's obligation may give rise to report, even if this breach is not so serious. According to the new French legislation, a breach to union law, an international commitment or a unilateral act of an international organization or law, a regulation, a threat or prejudice to general interest, could lead to report from an employee, which is really large.

Muriel Pariente:
And this will oblige employers to be cautious and to comply with legislation in order to avoid a report. And I guess will be very, very difficult for companies in France to respect this new law with this material scope of the report, which is really large.

Stephen Woodbury:
And Muriel, are you expecting then companies, organizations then to actually start to recruit or to actually increase the number of people who have to investigate and deal with complaints or claims?

Muriel Pariente:
For sure. We have already clients who just want to know exactly how will be, what they have to do. Indeed, there will be real implication and I think it will reorganize labor law in France.

Stephen Woodbury:
Thank you, Muriel. That's very interesting and then are we going to continue the trajectory embracing the directive, Crowley, over in the UK?

Crowley Woodford:
Sadly not, Stephen. As per usual, the UK is following its own path. As a result of Brexit, the UK now doesn't have to implement the directive, but that's not to say it's the end of the story in the UK. It will still be relevant for our UK clients that have European subsidiaries. Certainly they will need to review their current whistleblowing policies in light of both the directive and the UK's whistleblowing regime, primarily to ensure that the policies are going to be compliant across the board.

Crowley Woodford:
Depending on the jurisdiction in which they operate, clients will definitely be going through the process of weighing up the pros and cons of whether to adopt separate policies for each subsidiary or adopt a more sort of pan European or indeed global policy.

Stephen Woodbury:
Thanks, Crowley, so they'll pull you back in, even though you're trying to get out. That's a moral in that one?

Crowley Woodford:
Yes, absolutely. There's an irony in there somewhere.

Stephen Woodbury:
Yeah, and finally, let's jump over to the other side of the world into the Asia Pacific region. And we've got Karen Mitra to talk about Singapore and the status of whistleblowing laws in Singapore. Karen, what's the picture there?

Karen Mitra:
Yeah, thanks Stephen. We actually don't have dedicated whistleblowing legislation in Singapore and certainly nothing as broad and as complex as the EU directive or even the legislation that exists in Australia. Instead, we kind of have this patchwork-like set of protections that are afforded to whistleblowers that relate to things like corruption. And they're set out kind of across various pieces of legislation and really they focus more on anonymity and potential protection from criminal prosecution rather than the broad scope of protections that the EU directive would.

Karen Mitra:
Specifically with respect to the workplace though, which is probably what a lot of people are more interested in right now, we do think that's going to change. So the Minister of State for Manpower has actually publicly stated that government really wants to include some specific protection for whistleblowers in the context of the workplace and kind of particularly in the context of people making workplace complaints more generally.

Karen Mitra:
The regulators already take the view that it's unfair to dismiss an employee because they've made a workplace complaint, whether that be about their personal treatment or kind of unlawful or other illegal action with respect to employees more generally. And while there is no dedicated legislation, we see some employees making those types of claims in the context of kind of broader contractual disputes.

Karen Mitra:
I do think that we're going to see more on this very, very soon. Most likely that type of legislation will be kind of wrapped up in the anti-discrimination legislation that's due to be introduced in the next couple of years so definitely a "Watch this" space.

Stephen Woodbury:
And Karen, in relation to multinationals who have employees resident in Singapore, et cetera, do you anticipate, or is it currently the case that those companies by and large have their own internal policies akin to whistleblower laws, which they would apply already?

Karen Mitra:
Yeah, absolutely. And particularly for MNCs, we tend to see a global approach when it comes to a lot of their policies, so I wouldn't be surprised if in the same way that we saw a lot of MNCs kind of apply their GDPR-type provisions to their subsidiaries or their operations in Singapore, just for ease, it might be that they adopt some kind of similar global policy with respect to whistleblowing in Singapore as well.

Karen Mitra:
It's definitely a kind of a safer and easier approach for a lot of companies. I think you just really need to be aware of the specifics in that jurisdiction and that policy is probably fine to implement, but are there any particular quirks in that jurisdiction that your HR team and your compliance team need to be aware of that you might have to operate a little bit differently on a day-to-day level?

Stephen Woodbury:
Yeah, thanks Karen. And that's a nice segue into the second part of our podcast where we're going to just look at some of the issues that the whistleblowing laws have been throwing up in each of our jurisdictions for employers to grapple with. And we might start with you Karen, and work our way back. What are some of the considerations which employers based in Singapore need to have in relation to the whistleblower principles or which might be coming up and just more generally dealing with those types of workplace-type complaints?

Karen Mitra:
Yeah, absolutely. I think in Singapore, particularly, it's that question of we do see a lot of HR teams here who are responsible for managing a lot of different countries with very, very different regimes, not only from the employment perspective, but just kind of on every facet, really. So it's really being aware of what are the specifics in a particular country and how are you going to deal with complaints that have a cross border element.

Karen Mitra:
So if the complaint comes from an employee in Australia, and it's about something that happened in Singapore with a manager in Germany, how are you going to deal with that? And have you really thought that through with your compliance team or what are the various triggers and what are the various obligations you might have in that scenario? I think with Singapore specifically, one thing, particularly financial services companies to really be thinking about is, we have some very broad [inaudible 00:16:06] reporting obligations when it comes to matters that might involve corruption.

Karen Mitra:
And so I think that's something to be really aware of, of well, okay, you might have all these secrecy provisions, you might have kind of competing obligations when it comes to keeping things secret, but also, do you have a local obligation to kind of make a report?

Stephen Woodbury:
Yeah, thanks Karen. That's a really interesting point actually. And we might work our way back then to Crowley, and just wondering if you could give us a bit of a rundown of the UK's whistleblowing regime and some comparisons with the directive.

Crowley Woodford:
Yeah, thanks Steven. So the UK legislation already provides some pretty broad protection for whistleblowers. There's a provision that effectively says that any dismissal caused by a protected disclosure by a whistleblower will be automatically unfair. And the legislation goes further and says that as well as dismissal, any detriment that's caused by or connected with a whistleblower and a protected disclosure would also be subject to protection by the legislation.

Crowley Woodford:
The key, I think, to understanding the UK landscape for whistleblowing is in the definition of protected disclosure. Whistleblowing is considered protected. If a worker discloses information, the worker has a reasonable belief the disclosure is in the public interest and information is disclosed to specified persons such as, of course, the employer and certain prescribed external bodies, and that disclosure has to relate to six kinds of relevant failure.

Crowley Woodford:
Those relevant failures are probably, as you would expect, but primarily are breaches of a legal obligation or, for example, dangers to health and safety. And the requirement that workers only need a reasonable belief can be tricky under UK law because we as lawyers are very familiar with the concept of objective tests or reasonableness, but here it's whether the whistleblower subjectively believes that a breach has occurred and that it doesn't matter if that belief later turns out to be wrong.

Crowley Woodford:
Another thorny issue is the public interest angle to any whistleblowing, and the origins of that date back to when whistleblowing was first introduced into the UK, where we had a raft of claims related to breaches of individuals' own contracts of employment, which was not obviously the intent of the legislation. So the government changed tack slightly in its legislation and introduced this public interest aspect to it.

Crowley Woodford:
But the courts have interpreted that again, very broadly in favor of the whistleblower, and so provided the protected disclosure has a dimension beyond the individual, then the whistleblowing legislation and the public interest test will be satisfied. Now that I've sort of given you a flavor of what the UK position is like, probably finish with just some brief comparisons between the UK and the directive requirements.

Crowley Woodford:
So similar to the directive, the UK regime covers agency staff, home workers, former workers. Additionally, both regimes have penalties for non-compliance and in the UK, beyond that automatic [inaudible 00:19:45] I talked about, the compensation that could be awarded is potentially uncapped, and will be based on the employee's actual financial loss. In contrast to the UK legislation, the directive also sets out time limits which need to be built into internal reporting channels.

Crowley Woodford:
Those sort of time limits are not prescribed under UK law and this might be a particular area where clients' current procedures are not compliant with the directive and that harmonization of pan-European or global policies that we mentioned before. That will definitely be an area that will need to be reviewed by clients.

Stephen Woodbury:
Yeah, thanks, Crowley. I mean, just from what you've said, there's a lot for UK-based employers who operate onto the Continent to consider here. It's not just a case of just applying a policy and/or following the UK laws. It is just going to be quite a detailed and intricate web for them to navigate through by the sound of it. Let's go back to Muriel and to Paris. Muriel, I was just wondering, the concept of a facilitator seems to have come up in the French law and that just sounds rather dystopian to me. I'm not exactly sure what that role is, but can you just shed some light on that?

Muriel Pariente:
As you know, the directive has introduced the status of facilitators, defined as a natural person who assists a reporting person in the reporting process in the work-related context. France has plan to apply the status, not only to natural person, but also to non-profit legal entity under private law. It means that organization, association and union can also benefit from the legal protection of whistleblowers.

Muriel Pariente:
France has decided to protect legal entity who play a role in relaying the disclosure from criminal and cyber liability, considering the assistance provided to the reporting person, which is new status of facilitators. The whistleblower will no longer be isolated, but it creates a lot of issues. French companies will have to deal with a significant increase in the number of reports and protected person.

Muriel Pariente:
The risk is that companies risk finding themself in a situation where the entire work force is protected under whistleblower protection, preventing the employer from dismissing an employee in connection with a report, because contrary to the UK, it's not the case that you can dismiss someone and then it's [inaudible 00:22:23] for unfair dismissal. In France, you can't dismiss this person, it's not possible. In practice, the employee will not hesitate to challenge his or her dismissal by indicating that, in reality, that dismissal was not based on a personal or an economic wrong, but the dismissal was based to the disclosure.

Muriel Pariente:
Indeed, if the dismissal they will classify by the judge as new [inaudible 00:22:47], the employee will be able to benefit from a more favorable compensation. Employees therefore, have an economic interest invoking the [inaudible 00:22:57] of the dismissal. However, some questions remain unanswered. What type of assistance allow the employee to benefit from facilitator status? How long does the protection last? We will have to wait for the publication of a decree to have more information on the implementation of this law. One thing is certain, as I said before, the over-transposition of the directive will really modify the French labor law.

Stephen Woodbury:
Yeah, thanks Muriel. That's really interesting in terms of that expansion, that move of the protection across to other people who are assisting others. Presumably what you're saying there is that there could be some room for people to tactically use that protection, to use it as a shield against disciplinary action against them or other action an employer might wish to take in relation to what they might consider to be frivolous or disclosures without substance. So that will be interesting to see how that unfolds.

Muriel Pariente:
Yeah, they will use it for sure, I can tell you.

Stephen Woodbury:
Okay, thanks Muriel. Let's go to Spain and Cristina, I know in terms of the proposed legislation that has been handed down, there seems to be a lot of issues for employers to be grappling with, and I was just wondering if you could take us through two or three of those.

Cristina Grande:
Yeah, in Spain the main challenge will be those concerning the protections against retaliation. Also in Spain, employees are already protected against retaliation, according to Spanish constitution, and also if work as a statute qualifies null and void any dismissal due to retaliation, which in practice will imply that the employees could be entitled to be reinstated in their previous job position with pay, their salaries accrued as from the effective date of the dismissal are up to the day they are restated.

Cristina Grande:
And in addition, they may be entitled to a damages compensation. However, with the preliminary law, the temporal scope of the protection against retaliation is extended to two years. So as in the case of France, in practice this would definitely imply that any decision taken by employers affecting any whistleblower within such period will have to be duly justified. For example, in case of a dismissal, modification of working conditions, even a lack of promotion, for example.

Cristina Grande:
In case of a judicial procedure, the burden of the proof to justify that the relevant decision is not related to the claim but to objective grounds, will rely in the employer. In addition, this retaliation covers not only the informants, but also other individuals connected to the informant, work colleagues or relatives. So in practice there, many scenarios can arise.

Cristina Grande:
For example, in the selection procedure, where a candidate is a relative of the informant who have [inaudible 00:25:47] higher or a close friend of the informant, [inaudible 00:25:50] employee, but is not promoted. So we anticipate that also here in Spain, there will be an increase in judicial claims in this regard. Since besides in Spain, employment jurisdictions for employees [inaudible 00:26:03] so the employer could face not only the obligation to reinstate the employees in their previous employment conditions, but also they could face municipal fines related to the infringement of the whistleblower, so whistleblowing obligations.

Cristina Grande:
Other challenge for employers in Spain would be those related to also false allegations. As you said, using this tool to be covert against a decision taken that may be taken by employers. So it is true that in Spain collective bargaining agreements already include sanctions in this regard, but I think that it is a key that employers must leave it clear that false allegations or claims could lead to disciplinary sanctions and even dismissal.

Stephen Woodbury:
Thanks, Cristina. Yeah, that's very interesting. The consequences, obviously, can be quite severe for employers that get it wrong, so to speak, as a legislation is implemented. And let's just turn back to Andreas now. And Andreas, we've heard obviously about these laws applying across different countries in Europe, the EU directive. And I was just wondering, from your perspective, what are some of the issues that are likely to pop up both from an implementation point of view and a systems point of view as well?

Andreas Mauroschat:
Yeah, thanks Stephen. That's indeed going to be a challenge. As we know from our internationally acting clients, they typically have a group-wide system set up. Karen mentioned it. Now that may require a bit of an adjustment. The EU commissioners clarified last year, that the directive requires that any larger affiliates within a group, so 250 or more employees, must roll out their own local whistleblowing system.

Andreas Mauroschat:
Now that doesn't mean that there can't be an overarching group-wide system that can be kept in parallel, but it has to be able either by tenant ability or there has to be a separate system which provides for a decentralized, local reporting channel. That does not apply for smaller affiliates, so affiliates with less than 250 employees may share central resources, obviously relevant where parents share investigation teams or other overhead functions.

Andreas Mauroschat:
So what's the EU Commission's view on how to practically handle these investigations, which are cross-jurisdictional in their impact? In any case, the commission wants that such investigations are conducted by a dedicated central body, but the whistleblower has to be informed in advance that because of this cross-jurisdictional impact, their data and their report will be forwarded and we have to obtain their consent.

Andreas Mauroschat:
So if that consent isn't given, it's a bit questionable still whether the whistleblower would actually be able to withdraw their report or request that the matter is handled on a local level. So we see there's still some potential for significant impact on existing systems there. To finish, I think the keys for the successful implementation of the directive in a group context are the following.

Andreas Mauroschat:
First of all, all of our clients should consider what adjustments they need to make to their existing reporting channel, what dedicated central and de-central resources need to be set up. We need to be prepared for the situations of local investigation requests as we just discussed. So there might be adjustments in head count and resource allocation required.

Andreas Mauroschat:
Second, I think the procedures need to be flexible, in particular any platforms we use. They have to be able to cater for gold-plating in the specific regions, particular of course, the EU member states. We've heard from Muriel how gold-plating might have significant impact on how a procedure has to be done in the member state.

Andreas Mauroschat:
Yeah, and that eventually, again, leads to having a state-of-the-art platform that allows you to comply with the privacy restraint, but also enables you within the limited wiggle room that the directive leaves us, to use resources in a smart way. Whistleblowing is resource intensive and it's cost intensive, but that means we need to play it smart to be efficient and cost sensitive at the same time.

Stephen Woodbury:
Yeah, thanks Andreas. And yeah, we'll look forward with interest to when the German government starts to tackle the issue in terms of some actual legislation as well, but thank you for those comments. And now wrapping up in Australia, one recent development has been the release of a report called the Respect@Work Report, which has been released with a range of recommendations for the government to consider.

Stephen Woodbury:
They relate to workplace behavior and harassment, and embrace an awareness of the issue and the fact that employers and organizations have to deal with matters that come to their attention. And this increased awareness is resulting in greater numbers of complaints, investigations, and disciplinary actions as well. And it is something which many employers are having to grapple with in terms of their resourcing and in seeking specialist advice.

Stephen Woodbury:
Well, I'm afraid that's all we have time for with this podcast and I first thank our panelists again for their thoughtful and thought-provoking comments on what is a growing and increasingly difficult area for employers. And also thank you, our listeners, for tuning in. I hope you found the discussion interesting and useful and of assistance in managing whistleblower issues in your organization. Until our next WorldatWork podcast, I'm Stephen Woodbury wishing you all the best and bye for now.