A better protection for whistleblowers

By Anne Kayser, Vice-chair of the Integrity Committee

        The draft law n°7945, dated 10 January 2022, which transposes the EU Directive 2019/1937 of the European Parliament and of the Council of 23 October 2019, on the protection of persons who report violations of the Union law, will give comprehensive global legal status in Luxembourg to whistleblowers, “lanceurs d’alerte”.

        The purpose of the text is threefold: 

        1. To give whistleblowers a formal status, with well-defined rights and obligations

        2. To reduce the legal uncertainty to which they are currently exposed 

        3. To give them effective guarantees and protection against, amongst others, dismissal, change of work location, demotion, transfer of duties, disciplinary action, disadvantageous or unfair treatment, negative performance evaluation or certification, early termination or cancellation of a contract for goods or services.

        Violations to be reported include acts or omissions that are unlawful or contrary to the object or purpose of directly applicable provisions of national or European law. The draft law goes further than the Directive, as in its scope it includes all national law.

        The current legislation only relates to reporting offences around corruption, influence peddling and illegal interest taking.

        It is important to note that whistleblowers cannot obtain the information they want to leak through an “autonomous” criminal offense, like theft or breach of professional secrecy.

        Protection will be applicable to whistleblowers working in the public and the private sector who have obtained information about violations at work. 

        While the current legislation only protects employees and civil servants, the future law includes shareholders, members of the board and of the management, including non-executive members, people whose employment relationship has ended or not yet started, trainees (paid or not), subcontractors.

        All will have the choice to report a violation either internally via internal processes set up by the organization or externally to an external body such a regulator / a competent authority, mainly CSSF, CAA, AED, CNPD, ITM, IRE, the Bar Association, the Architects Association, the Order of Chartered Accountants.

        Whistleblowers will also be protected if they make their information public, e.g. via internet or newspapers. However, public channels will be available to whistle blowers if one of these conditions is met: 

        i) He-she has reported the violation internally and externally, or has directly reported the violation externally, but no appropriate measure has been taken

        ii) the violation represents an imminent danger for the public interest

        A whistleblowing office will be created under the authority of the Ministry of Justice, to inform and guide whistleblowers and entities on implementing the whistleblowing framework.

        Private sector legal entities are also in scope of the draft law if they have at least 50 employees. They have to establish a process framework for the protection of whistleblowers.

        The directive provides for a transition period of two years, until December 17, 2023, to implement the internal channels requirement in private sector legal entities with between 50 and 249 employees. For private sector legal entities with 250 or more employees, the obligation will be immediate.

        As whistleblowing is part of Corporate Governance and is an important element in the corporate culture, this process should be part of the internal control framework of the organization.

        As part of their oversight role on the internal control system, Boards should consider the effectiveness of whistleblowing policies on a regular basis and that training are in place for all the staff, including the board it-self, knowing that the responsibility for establishing effective internal whistleblowing procedures, channels and training lies with Management.

        We will follow up legal processes and will inform our members in due course of any new development.

        Anne Kayser

        Vice-chair of the Integrity Committee

        24 February 2022