Welcome back to our World Cup series, where we compare various aspects of labor and employment law in some of the participating countries.¹  We kicked off Parts One and Two of this series with vacation and sick leave entitlements. Part Three switched to workplace health and safety requirements. Part Four fielded the question of whether an employer can compel drug and alcohol testing. Viewers have heard plenty players crying foul in the lead-up to the round of 16, so we thought it would not be out of bounds to tackle whistleblower protections in Part Five.

The Netherlands vs. United States (December 3)

The Netherlands

Under the current Dutch House for Whistleblowers Act, all employers in both the private and public sector, with 50 or more employees, must implement an internal reporting procedure through which people working for the company can report misconduct in the organization. In June 2021, the Dutch legislature published a bill to implement the E.U. Whistleblower Directive (2019/1937). Once this bill is implemented, the internal reporting procedures must be fit to deal with reports regarding malpractices under Dutch law and violations of E.U. law. The bill is currently still pending in the House of Representative but is still expected to enter into force in 2022.

Under the draft bill, the dates for compliance are now:

• For organizations with more than 249 employees: December 31, 2022
• For organizations with 50-249 employees: December 17, 2023

Additionally, the implementation of the bill will expand protection to whistleblowers. Currently, whistleblowers could claim protection from retaliation if they followed the appropriate procedure. First, they must raise the concern internally, and only if the report is not dealt with properly within the organization can they report it externally to inspectorates or other supervisory bodies. If a proper response by the external channel is lacking or in the absence of an appropriate external channel, whistleblowers can report to the Dutch Whistleblowers Authority. In cases in which internal reporting is considered not to be an option, whistleblowers may immediately report to an external channel.

Once the bill is implemented, the obligation to first report internally will be dropped. Reporters may choose to report externally right away, and they will also be protected against liability procedures related to the report. Those reporting will automatically be protected, unless the concerning company can prove why the whistleblower should not be entitled to protection. This will represent a shift in the burden of proof.

United States

Much like the World Cup’s price tag, U.S. federal statutes protecting whistleblowers from retaliation have multiplied dramatically in recent years. The Sarbanes-Oxley Act of 2002 is perhaps the best-known law, and more recent statutes have expanded whistleblower protections (e.g., Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Consumer Safety Protection Improvement Act of 2008).

There are many similar statutes protecting whistleblowers from retaliation that affect companies doing business with the federal government or that operate in a manner subject to federal regulation. For example, the Criminal Antitrust Anti-Retaliation Act of 2019 (enacted in December 2020), prohibits employers from retaliating against individuals who report criminal antitrust violations to their employer or the federal government, or who participate in a federal governmental criminal antitrust investigation or proceeding. Likewise, the Anti-Money Laundering Act (enacted in January 2021) contains whistleblower protections, covering a wide range of financially based organizations regulated under federal law (including banks, insurance companies, credit card system operators, casinos, etc.). With these laws, OSHA now oversees the enforcement of the whistleblower provisions of at least 25 different statutes, including those related to workplace safety and health—the Agency’s original mandate—but also several concerning consumer products, food safety, securities, motor vehicle safety, health insurance, and financial reform, to name a few.

These federal statutes complement the wide range of state statutes in this area. State legislation varies widely, with some laws providing protection to public- and private-sector employees, some only to public-sector employees, some to employees who complain internally, some only to those who have raised their concern to law enforcement authorities and some with other variations.

Argentina vs. Australia (December 3)

Argentina

Argentinian law does not include a specific protection for whistleblowing related to employment matters. However, Law No. 24,401, which rules the criminal liability of companies, has established that, as part of a compliance program, companies must put in place a code of conduct, which must contain, among other provisions, a protection policy for individuals who report a crime (policy against retaliation).

Australia

Australian law will push this topic into overtime, as its whistleblower protections are much more extensive.

In Australia, whistleblowing occurs when a person, usually an employee, contractor, or office holder, reports misconduct or dishonest or illegal activity within the workplace. In general, whistleblowing protections include the following:

• immunity from civil or criminal liability for the reporting employee;
• prohibiting the employer from taking adverse action against the reporting employee, including termination; and
• prohibiting victimization of the reporting employee.

Whistleblowing policies should be in line with the new whistleblowing laws as well as Australian Standard AS 8004-2003.

There are numerous legislative whistleblowing protections in both the public and private context, including:

• the Corporations Act 2001 (Cth);
• the Public Interest Disclosure Act 2013 (Cth); and
• the Whistleblowers Protection Act 1993 (SA).

A new whistleblower protection regime covering the corporate, financial, and tax sectors—the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (“2019 Act”)—took effect on July 1, 2019. It aims to encourage ethical whistleblowing and discourage white collar crime, while holding employers accountable for protecting eligible whistleblowers.

The 2019 Act makes important changes to the Corporations Act 2001 (Cth) and the Taxation Administration Act 1953 (Cth) affecting almost all companies, including foreign corporations, trading or financial corporations formed within the limits of the Commonwealth, ADIs (authorized deposit taking institutions), NOHCs (authorized non-operating holding companies), super funds, and insurers.

Key aspects of the new laws include:

• Protected disclosures may relate to matters beyond criminal breaches, including breaches of tax laws, ASIC (Australian Securities and Investments Commission) laws, and APRA (Australian Prudential Regulation Authority) laws. Conduct that is not illegal but indicates systemic issues will also be disclosable. However, the protections will not extend to disclosures about personal employment or workplace grievances such as interpersonal conflicts, transfer, promotion, or disciplinary decisions.
• More people can be “eligible whistleblowers,” including anyone who has ever been in a relationship with a company (such as former employees, contractors, employees of contractors, associates, and relatives of such individuals).
• More people can be “eligible recipients” of disclosures, including senior managers, directors and auditors; and in certain circumstances, even journalists and politicians.
• Stronger protections for whistleblowers including anonymity, increased immunities against prosecution, and protection against detriment through victimization. Whistleblowers are no longer required to act in good faith to be protected (although they need to have reasonable grounds to suspect misconduct).

Severe civil and criminal penalties will apply to employers who breach these protections, and courts are empowered to make orders for relief against a company if it fails to fulfil a duty of care to protect a whistleblowing employee from detriment. The maximum civil penalties under the new Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 (Cth) for breaching confidentiality of an eligible whistleblower’s identity or causing or threatening detriment include:

• For individuals: up to AUD 1.05 million (5,000 penalty units).
• For companies: AUD 10.5 million (50,000 penalty units), or 10% of the annual turnover (up to AUD 525 million or 5 million penalty units).

Whistleblower Policy

Since January 1, 2020, certain companies are now required to have a whistleblower policy that complies with the new Section 1317AI of the Corporations Act 2001 (Cth). The requirement carries a penalty of AUD 12,600 for noncompliance, and applies to:

• public companies;
• large proprietary companies, which are characterized by having any two of the following:
  
  • AUD 50+ million in consolidated revenue
  • AUD 25+ million or more in consolidated gross assets
  • 100+ employees
• registerable superannuation entities.

Although only certain companies are required to have a whistleblower policy, all companies regulated under the new regime should consider creating or updating their whistleblower policy.

To comply with Section 1317AI, the policy must contain:

• the protections available to whistleblowers;
• how and to whom an individual can make a disclosure;
• how the company will support and protect whistleblowers;
• how investigations into a disclosure will proceed;
• how the company will ensure fair treatment of employees who are mentioned in whistleblower disclosures; and
• how the policy will be made available.

Training

The new laws also require mandatory training for the following:

• For “eligible recipients”: This group includes senior managers, officers, and anyone else authorized by the company to receive disclosures from whistleblowers (such as compliance officers). This training should cover the process set out in the company’s whistleblower policy to respond to disclosures. Special attention should be paid to the importance of protecting whistleblowers’ right to anonymity during the investigation, unless they consent to their identity being disclosed.
• A company’s auditors, actuaries, tax agents, and BAS agents (agents who meet the registration requirements of the Tax Practitioners Board) are also “eligible recipients”. Although employers are not expected to train these persons, employers should consider informing these eligible recipients of their new obligations under the 2019 Act.
• For all staff: This training should include how the whistleblower regime works under the 2019 Act, how the whistleblower policy provides a process for disclosing and investigating certain matters, and the protections that will be provided to eligible whistleblowers.

France vs. Poland (December 4)

France

Whistleblowers are protected in France under Law No. 2016-1691 of December 9, 2016 (so-called “Sapin II”), which was recently amended by Law No. 2022-401 of March 21, 2022. Under this legislative framework, companies with at least 51 employees must implement and disseminate the appropriate whistleblowing reporting procedures in writing. The company may decide where and how the whistleblowing provisions are delineated and communicated to the employees.

Under French law, a whistleblower is defined as any individual who reports or discloses without direct financial consideration and in good faith, information regarding a crime, an offense, a threat or harm to the general interest, a violation or an attempt to conceal a violation of an international commitment duly ratified or approved by France, of a unilateral act of an international organization taken on the basis of such a commitment, of the law of the European Union, or of the law or regulation.

Under this framework, a whistleblower cannot be held criminally liable for disclosing a secret protected under French law, to the extent that this disclosure is necessary and proportionate to safeguard the interests involved and complies with the reporting procedure. However, matters of national security, medical secrecy, and legal privilege are not covered by the whistleblower protections.

Workplace retaliation against whistleblowers is strictly prohibited and any person guilty of impeding whistleblowing may be punished for up to one year in prison and a fine of EUR 15,000.

To benefit from the legal protection, whistleblowers must follow one of the appropriate reporting procedures:

1. Alerting the whistleblower’s direct or indirect supervisor or another specifically designated person of the issue.
2. Reporting to a public authority (i.e., judicial or administrative authorities or professional boards).
3. If the public authority involved does not act on the report, the report may be disclosed to the public.

Whistleblowers who have the status of employee are no longer required to report to the employer or the employer representatives. They may choose to report externally, especially to the Human Rights Defender, the judicial authority or a competent authority designated by decree.

Employers are required to inform all employees and external staff of the reporting procedures by making the information readily accessible (e.g., by publication on the intranet, etc.) and including such procedures in the internal regulations.

The reporting procedures must: (1) identify to whom the employee should send the report; (2) specify how whistleblowers may provide information or documents to support the report; and (3) allow an eventual exchange with the recipient of the report.

Employers are now required to appoint a whistleblower referent within the company, who will be responsible for collecting and processing alerts.

The procedures for accepting reports must also include steps to: (1) acknowledge the receipt of the report, informing its author about the reasonable and foreseeable timeframe for evaluating the report, and how the employee will be apprised of the outcome of this assessment; (2) ensure the whistleblower’s identity and the facts contained in the report will be kept confidential, even when the report is communicated to third parties for verification purposes; and (3) destroy the portions of the report that could be used to identify its author and the persons targeted after the assessment is completed (the procedure must set a deadline for this destruction, which cannot exceed two months following the closing of the report’s evaluation).

Poland

On December 16, 2019, the European Union Directive 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law entered into force. The deadline for the member states to implement this directive was December 17, 2021.

As of July 2022, there is still no whistleblowing legislation in place in Poland. The government currently is processing yet another new draft bill to implement the EU directive that will set out the rules on whistleblowing protection. Currently, the bill has been submitted to the government’s European Affairs Committee. The draft has been vastly criticized as it foresees a very short implementation period (14 days), giving employers very little time to adapt to an entirely new and complex environment. Also, because the draft’s protection of whistleblowers is relatively weaker than the protection provided by the EU directive, it has been criticized as being noncompliant with European law.

If an employee is fired in retaliation for whistleblowing, it is likely that the employee can successfully invoke the so-called “doctrine of horizontal direct effect,” which is a doctrine created by the European Court of Justice that stands for the proposition that an individual can invoke a provision of EU law in relations between individuals. Further, such termination notice can be successfully challenged before the employment court as unjustified under the dismissal protection law.

Brazil vs. South Korea (December 5)

Brazil

The 2019 “Anticrime Law” introduced changes in Brazil that increased whistleblower protection on matters related to information helpful for the prevention, suppression, and investigation of crimes and actions of administrative malfeasance. Among other changes, the law amends Law #13.608 by including non-retaliation protections applicable to federal, state and municipality authorities, as well as state companies.  Whistleblowers may be eligible for the witness protection program, and beyond that, are protected against arbitrary termination, unjustified changes in work activities and job-related responsibilities, disciplinary sanctions, reduction of benefits, damages, or even the denial of positive professional references. These individuals also have immunity from civil and criminal liability.

Separately, Law #12.846 establishes criteria for assessing civil and administrative liability on legal entities for actions against the public administration (including requirements for whistleblowing as a legal entity, and Decree #10.153 creates measures for protecting the identity of whistleblowers.

South Korea

As in the United States, whistleblower protection laws in South Korea are a bit of a patchwork. Korea does not have a single, integrated law governing protection of whistleblowers. Instead, statutes that contain provisions for the treatment and protection of whistleblowers span a number of different types of laws including but not limited to anti-corruption, fair trade, securities, labor, and crime. This means that any number of different government agencies may become involved depending on the legal issue that precipitated the whistleblowing.

These laws include, but are not limited to:

• The Act Concerning External Audit of Joint Stock Corporations: This law applies to stock companies or limited liability companies whose total assets (calculated as of the end of immediately preceding business year) are valued at not less than KRW 12 billion, or listed (or to be listed) companies that are by law subject to accounting audits by external auditors. This Act protects whistleblowers who come forward with reports: (1) when a company prepares and discloses its financial statement, a consolidated financial statement, or a combined financial statement in violation of its internal accounting policy; (2) when a company fails to enter matters that are required to be entered in an audit report or enters false matters in the audit report; or (3) when a company prepares and discloses financial statements in violation of the accounting standards under the Act.
• Labor Standards Act: Workers may report to the Minister of Employment and Labor (or a labor inspector) if any violation of the provisions of the LSA (or the Presidential Decree promulgated pursuant to the LSA) occurs at a business or workplace. An employer may not dismiss or unfairly treat a worker for making such a report.
• Industrial Safety and Health Act: If an act violating ISHA (or an order issued under ISHA) occurs at a workplace, any worker may report it to the Minister of Employment and Labor or labor inspector. No business owner may dismiss or mistreat a worker for making such a report.
• Trade Union and Labor Relations Adjustment Act: Employers are not allowed to dismiss or mistreat workers on the ground that they have participated in justifiable collective activities, or that they reported to or testified before the Labor Relations Commission that the employer has violated the provisions of this Act, or that they have presented other evidence to the relevant administrative agencies.
• Protection of Reporters, etc. of Specific Crimes Act. This Act was promulgated to protect persons who make reports of special crimes (e.g., special homicide crimes, illegal drug trafficking, violent acts). Such whistleblower’s employer may not dismiss or otherwise put an employee at a disadvantage on the grounds that the employee has reported the crime to authorities.

Stay tuned for the next edition covering employment laws in those countries that make it to the quarter finals.

Authors:

Netherlands: Eric van Dam, Dennis Veldhuizen, and Wouter Engelsman (Clint | Littler); Argentina: Mercedes Balado Bevilacqua and Tatiana Diaz (MBB Balado Bevilacqua Abogados); Australia: Naomi Seddon (Littler); France: Guillaume Desmoulin (Fromont Briens | Littler); Poland: Jakub Grabowski (PCS | Littler); Brazil: Marília Nascimento Minicucci (Chiode Minicucci Avogados | Littler Correspondent); South Korea: W.J. Kim and S.H. Kweon (Kim & Chang)