Proposal for new whistleblower law will require companies to establish whistleblower schemes.

The EU Whistleblower Protection Directive must be implemented in Denmark by 17 December 2021. On 24 February 2021, the Ministry of Justice sent a draft whistleblowing bill, implementing the Directive for consultation. The deadline for submission of comments on the bill is the 24 March 2021. The bill is expected to be considered in parliament for the first time at the beginning of April 2021. The Directive is a consequence of the EU commission reporting the need for protection of whistleblowers, following a number of scandals about fraud and harassment, in which whistleblowers have played a crucial role.

Which companies will be impacted by the new law and what will be required?

Under the proposed bill, all companies with 50 or more employees will be required to set up a whistleblower scheme. The deadline for implementing such a scheme is dependent upon the size of the company. Private sector companies with between 50 and 249 employees must have established a whistleblower scheme by no later than 17 December 2023. The deadline is shorter for private sector companies with 250 or more employees, as well as for all public sector employers who will be obliged to establish a whistleblower scheme by 17 December 2021.

Employers with less than 50 employees

Companies with fewer than 50 employees, are in principle not required to establish a whistleblower scheme. However, it follows from section 3 of the proposed bill that if, pursuant to EU law or national law, there are industry-specific requirements that (all) companies in the industry in question must have established a whistleblower scheme, this requirement will still apply. Therefore, for example, companies in the financial sector will continue to be obliged to have a whistleblower scheme, even if the organisation has fewer than 50 employees. The bill also allows the Minister of Justice, after a specific risk assessment of a particular sector and after negotiation with the relevant ministers, to introduce further rules that employers with fewer than 50 employees can also be required to have internal whistleblower scheme.

Employers with more than 50 employees

Employers with 50 or more employees must establish an internal whistleblower scheme where workers can report breaches of the law. The proposal implies, that the Act will apply not only to the reporting of non-compliance for matters of EU law that are subject to the underlying EU Directive, but also to other types of serious breaches or other serious matters. Such breaches and other serious matters of law will, amongst other things, include reports of criminal offences, including theft, fraud, embezzlement, fraud, bribery and violations of the Money Laundering Act. It appears from the Ministry of Justice’s considerations on the material scope of the proposed legislation that reports of the whistleblower’s own employment relationship will, in principle, fall outside the scope of the legislation, unless such a report relates to a serious offense or an otherwise serious matter. However, from our experience, it is likely that many reports will relate to employment law matters, for example a report relating to sexual harassment, would be covered by the new Act, as would other serious personal conflicts in the workplace, e.g., gross harassment.

Information on other matters, including breaches of internal guidelines of a less serious nature, such as sick leave, private use of office supplies, etc., and information on less serious personnel-related conflicts in the workplace will, in principle, not be covered by the scope of the legislation. Such complaints should instead be submitted to the immediate manager, personnel / HR department or union representative under the company’s normal grievance process.

The obligation to establish an “internal whistleblower scheme” does not imply that the company must necessarily appoint a person or department internally to handle the scheme, although this is also an option. Further, an internal whistleblower scheme may also be provided externally by an independent third party in accordance with Article 8 (1) of the Directive. An external third party in this regard could be an external reporting platform provider that collaborates with an external lawyer, or designated department of the company.

Protection of the whistleblower

According to the proposed bill, a whistleblower who meets the protection conditions in sections 5-6 of the bill is not considered to have breached a statutory duty of confidentiality and does not incur any kind of responsibility for making a report, provided that the whistleblower had reasonable grounds to assume that the report or the disclosure of the information in question was necessary to detect an unlawful matter, or any other matter protected by the bill. Furthermore, a whistleblower who meets the conditions of protection in sections 5-6 of the Bill does not incur liability for the acquisition of, provided that such acquisition does not constitute an independent criminal act.

According to the bill, a whistleblower must not be subjected to any retaliation as a result of having made a report or publication in accordance with the law. Retaliation in this connection shall be understood as any consequence of such a report or publication that causes or may cause the whistleblower unjustified damage, including a dismissal as a result of an employee having “blown the whistle”.

Mette Klingsten Law firm collaborates with EQS (formerly Got Ethics) on delivery of whistleblower solutions. Contact Mette Klingsten Law Firm to hear more about the service.
The bill that has been sent for consultation can be read in its entirety via this link (in Danish): https://www.ft.dk/samling/20201/almdel/REU/bilag/210/2340350.pdf