HR In the Know 4/2024

At the beginning of March, a new draft Act on whistleblowers dated 26 February 2024 (the "Draft") implementing Directive (EU) 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 (the "Directive") and introducing a number of significant changes in relation to the previous ten versions of the proposed regulations, was published on the website of the Government Legislation Centre. As we expect the final version of the Act to be adopted by the Sejm and the Senate within the next few weeks or months, it is worth summarising the proposed solutions in order to prepare for the entry into force of the Act as soon as possible and to fulfil the responsibilities arising out of it. We also recommend beginning work on the relevant procedures now - those already in place will not be sufficient and there may not be much time to prepare new compliant procedures from scratch given the many strategic decisions which need to be taken beforehand. Crucial for many entities will be that the obligation to establish an internal reporting procedure will depend on headcount, which will include not only employees, but also persons providing work under other legal basis, in particular on the basis of civil law contracts.

In this article we discuss the most significant changes resulting from the Draft in relation to the previous draft of 8 January 2024, which we highlighted in more detail in the January edition of HR In the Know 2/2024. 

Introduction of the term “whistleblower” and change of the name of the Act

One of the most noticeable changes included in the Draft is the new title of the Act: the Act on the protection of whistleblowers. This is as a result of the abandonment of the term "a person reporting or publicly disclosing information about breaches of the law". The latest version of the Act uses the term "whistleblower" instead, defining it as "a natural person who reports or publicly discloses information on a breach of the law obtained in a work-related context." According to the Draft’s authors, this change is guided by the presence of the term "whistleblower" in the public perception of the issue of reporting breaches of the law. It should be noted that the Directive also uses this term, but only in the recitals, and uses the term "reporting person" in the later portions of the Directive. Therefore, it can be assumed that the above change is only one of a technical nature and should not affect the degree of whistleblower protection or any other legal solutions adopted in Polish regulations implementing the Directive and their effectiveness.

Extension of the catalogue of breaches

The next crucial change is the extension of the material scope of the Act, which indicates in the Draft four new types of breaches subject to reporting by a whistleblower. Therefore, in the latest version of the Draft, the catalogue of breaches includes also, in addition to the breaches indicated in the previous version, actions or omissions that are unlawful or intended to circumvent the law relating to: (1) human and civil rights and freedoms, (2) corruption, (3) human trafficking and (4) labour law. The last category seems particularly interesting (and potentially problematic) as it may force employers to be even more diligent in compliance with labour law provisions, as well as may provide an arena for different types of employee activity to gain whistleblower status. It should also be noted that the above reference to labour law is quite broad and in practice may cause problems as regards its scope.

Extension of vacatio legis

An extremely important update is the extension of the period after which the new provisions of the Act are to enter into force. The previous draft from January 2024 provided for a short, one-month vacatio legis, after which the obliged entities would have another one month period to establish an internal reporting procedure. These deadlines were commonly criticised as being far too short and made it difficult to adapt to the new regulations. Due to the above, in the current version of the Draft, the vacatio legis has been extended to 3 months (with the exception of the provisions regarding external reporting, which are to enter into force only after 6 months from the date of announcement of the Act), however, no additional deadline has been introduced for the implementation of internal reporting procedures. The above solution is, therefore, also problematic. On the one hand, the obligation to establish internal reporting channels has actually been postponed, and on the other hand - only by one month compared to the previous draft. Moreover, the entry into force of the obligation to establish internal reporting procedures at the same time as the date of entry into force of the Act may mean that it will be necessary for the obligated entities to take internal actions on this matter before the new regulations become effective, which may be problematic from a legal point of view. Therefore, we maintain our recommendation to start the process of adapting to the new regulations as soon as possible to avoid serious consequences resulting from the failure to fulfil statutory obligations when the Act enters into force. This is particularly important considering the fact that the Draft was submitted for urgent consideration by the Permanent Committee of the Council of Ministers (Stały Komitet Rady Ministrów), which means that its adoption and subsequent submission for consideration by the Sejm and Senate should take place soon.

Minimum monetary damages and non-monetary damages for the whistleblower

While the previous draft Act granted the reporting person against whom retaliatory actions were committed the right to monetary damages in the full amount, only in the latest version of the Draft has its minimum amount been precisely defined: at least twelve times the average monthly salary in the national economy in the previous year, announced for retirement purposes in the Official Gazette of the Republic of Poland "Monitor Polski" by the President of the Central Statistical Office. Additionally, a key novelty is also the granting to the whistleblower the right to non-monetary damages alongside the right to monetary damages, i.e. the obligation to compensate for non-pecuniary damage (harm). This means introducing drastic financial sanctions on entities which retaliate against whistleblowers. Therefore, careful implementation and compliance with procedures protecting whistleblowers against retaliatory actions will be necessary.

Anonymous reports

It has been explicitly permitted for legal entities, public authorities and the Commissioner for Civil Rights Protection to accept anonymous reports - however, the final decision on this matter will belong to the above-mentioned entities. Significantly, in the event that an anonymous report is not accepted by the above entities, the provisions of the Act will not apply, and thus persons reporting in this way will not be subject to the protection resulting from it. In this context, from the point of view of legal entities, a very important obligation has been imposed by the Draft requiring prior preparation, which will be the obligation to determine in the internal reporting procedure, the method of proceeding with anonymous information concerning breaches of law. The above solutions comply with the Directive, which left to the Member States the choice to decide whether to accept anonymous reports or not.

Free legal aid for whistleblowers

Yet another novelty will be the possibility for a person willing to report a breach of the law to benefit from free legal aid and free citizens counselling pursuant to the provisions of the Act of 5 August 2015 on free legal aid, free citizens counselling and legal education.

Protected secrets in the field of defence and security

The Draft provides also for an extension of the catalogue of information which will not be covered by the provisions of the Act, i.e.: (i) offset agreements concluded on the basis of the Act of 26 June 2014 on certain agreements concluded in connection with the completion of orders of fundamental importance for state security (Journal of Laws of 2022, item 1218) and (ii) other measures taken to protect basic or important state security interests on the basis of Article 346 of the Treaty on the Functioning of the European Union.

Clarification of unclear issues

Issues that have so far caused some doubts have also been clarified. First of all, a provision providing whistleblowers with protection resulting from the Act from the moment of reporting or public disclosure has been introduced, thus specifying the moment from which the protection will be granted. A deadline for the public authority competent to undertake follow-up actions to issue a certificate confirming that a given person is subject to protection under the Act has also been set, which according to the Draft, may be a maximum of one month from the date of receipt of the request for such a certificate. Finally, the method of calculating headcount, which determines the obligation to establish the internal reporting procedure by the obliged entities, has also been clarified, so that the headcount covers full- employees (calculated as FTEs) and/or persons providing paid work on other basis than an employment relationship, if they do not employ other people for this type of work, regardless of the basis of engagement. Headcount status should be verified as of 1st January and/or 1st July of a given year.