Breaking news: new European Commission proposal on whistleblowing

The European Commission has today proposed legislation to address the fragmentation of protection for whistleblowers across the EU. The proposal sets out “common minimum standards” to protect whistleblowers against retaliation for reporting breaches in specific EU policy areas, such as financial services, product safety and protection of privacy and personal data.

Whilst most of the minimum standards will sound familiar to global employers (for example, the need for internal reporting channels), the Commission’s proposal does take a much wider view on who should benefit from whistleblower protection compared to what we usually see. The Commission’s proposal will safeguard the rights of individuals who acquire the information they report through their work-related activities (irrespective of their nature) and who run the risk of retaliation. As drafted, this could extend whistleblower protection to ‘gig’ workers and the self-employed.

That said, the Commission’s move to provide greater protection for whistleblowers mirrors the key finding of our November 2017 whistleblowing survey that although whistleblowing culture within businesses seems to be moving in the right direction, there is certainly room for improvement if businesses are to benefit fully from the early intervention opportunity offered by the whistleblower.

The diagram below illustrates the current levels of whistleblower protection across the globe. Currently the United States, South Korea and China have more comprehensive legal landscapes than the EU when it comes to whistleblower protection and within the EU itself the protection for whistleblowers is not consistent. It is clear in the proposal that the Commission is concerned that the fragmented protection against retaliation for whistleblowers in the EU risks “missed opportunities” for preventing and detecting breaches of EU law.

What next?

The proposed Directive falls under the ordinary legislative procedure, also known as co-decision procedure. The co-legislators (European Parliament, Council) will separately discuss the proposal and make amendments. Once the Parliament and the Council have adopted their respective positions, they will have informal three-way negotiations with the European Commission (the so-called “trilogues”) to try and agree on a final text. We are looking at possible adoption of the proposed Directive in about seven to ten months, thus potentially before the next EU elections (June 2019) and even before Brexit (March 2019), unless of course there is unexpected controversy over the content of the proposal.

Although the new legislation will only come into force post-Brexit, it may form part of key EU standards which must be respected as part of any future trade deal between the UK and the EU.

Our latest global guide, Whistleblower Protection, sets out the current legislative framework of the protections available to whistleblowers in 16 key jurisdictions across the Americas, Europe and Asia. If you would like to request a copy, please email Julie Mbuyi (Julie.MBUYI@freshfields.com).