The Whistleblower Act has now been passed

The Whistleblower Protection Act (the “Act”) was passed on 24 June 2021, meaning that companies with more than 49 employees are now obliged to establish a whistleblower scheme. The passing of the Act was delayed, due to a several objections being raised during the consultation period. The main objection being the lack of provision to enable group companies to establish a groupwide whistleblower scheme. This issue has now been addressed in the new Act.  

Who and what is covered by the Act?

Pursuant to the Act all companies with 50 or more employees are required to establish a whistleblower scheme. The timeline for implementation of the scheme is dependent upon the size of the company. Companies in the private sector with between 50 and 249 employees are obligated to establish a whistleblowing scheme by no later than 17 December 2023. However, the deadline for private sector companies with more than 250 employees, and public sector employers, is shorter with a deadline of 17 December 2021.

Companies with less than 50 Employees

Companies with less than 50 employees are not required to establish a whistleblower scheme pursuant to the Act. However, it follows s. 3 of the Act, that if, pursuant to EU or national law, there are industry-specific requirements that (all) organization within the specific sector must have established a whistleblower scheme, this obligation will continue to apply. Therefore, companies within the financial sector, for example, will still be required to operate a whistleblowing scheme, in accordance sector specific legislation, even if the company has less than 50 employees.

The Act also allows the Minister of Justice, after a specific risk assessment and after negotiation with the relevant minister, to lay down detailed rules that employers with fewer than 50 employees are required to establish internal whistleblower scheme.

Companies with more than 50 employees

Pursuant to the Act, companies with 50 or more employees are required to implement internal whistleblower schemes where individuals can report violations of the law. The Act covers, reports of amongst other things, criminal offences, theft, fraud, embezzlement, fraud, bribery and violations of the Money Laundering Act. Based on experience in this area, we consider that many of the reports made under the Act are likely to be related to employment law matters. It follows from the Ministry of Justice’s considerations on the material scope of the Act, that reports of the whistleblower’s own employment relationship, will, in principle fall outside the scope of the Act, unless such a report relates to a serious offence or an otherwise serious matter. For example, reports regarding sexual harassment or other serious personal conflicts in the workplace, e.g. serious harassment will be covered by the Act.

However, reports on other matters, including information relating to breaches of internal guidelines of a less serious nature, such as sick leave, alcohol, clothing, 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 Act. Such information should instead be submitted to the immediate manager, personnel / HR department or union representative.

The obligation to establish an “internal whistleblower scheme” does not imply that the company must necessarily appoint a internal person or department to handle the scheme, although this is an option. 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 could be an external reporting platform provider that, collaborates with an external lawyer or internal department of the company.

Group companies

Under the original bill, group companies with more than 249 employees could not establish a common whistleblower scheme for the group, and therefore were obliged to establish a whistleblower scheme for each individual group company. There was strong objection to this provision from companies operating within a group structure, due to the administrative and cost burden of having to establish individual company schemes. Against this background, the Ministry of Justice proposed an amendment to the bill making the establishment of a group-wide whistleblower scheme(regardless of the size of the group companies) possible. However, there is some doubt as to whether this is in line with the provisions of the whistle blower directive which underpins the Act. The Ministry of Justice is in dialogue with the European Commission on this and we understand the European Commission, may, if necessary, propose an amendment to the directive. Larger group companies are therefore recommended to follow the developments.

Whistleblower protection

According to the Act, a whistleblower who meets the protection conditions in sections 5-6 of the Act is not considered to have breached a statutory duty of confidentiality and does not incur any liability for making a report, provided that the whistleblower had reasonable grounds to assume that the report or the disclosure of the information was necessary to detect an unlawful matter, or any other matter protected by the Act.

In accordance with the Act, a whistleblower must not be subjected to retaliation as a result of making 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 because of an employee having “blown the whistle”.

Mette Klingsten Law firm collaborates with EQS Group (formerly Got Ethics) for the delivery of whistleblower solutions. Please Contact Mette Klingsten Law Firm to hear more about the service.

The Act as adopted can be read in its entirety via this link (in Danish): https://www.ft.dk/ripdf/samling/20201/lovforslag/l213/20201_l213_som_vedtaget.pdf