HR In the Know 7/2024

On 23 May 2024, after many months of work at the government level during which numerous drafts were released, the Sejm finally adopted the Act on the protection of whistleblowers (the "Act"). This does not mean the end of the legislative path however, because the Act will now go to the Senate, where it will be considered and will then require the President's signature. However, the implementation of 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 to the Polish legal order is already at a very advanced stage.

In relation to private entities, the Act is to enter into force 3 months from the date of its announcement. It is therefore expected that this will take place in early autumn this year (September - October 2024), depending on the pace of processing of the Act in the Senate and the number of submitted changes.

Consequently, we recommend starting works on the appropriate procedures as soon as possible - 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. We note 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.

We informed you about previous versions of the proposed regulations in previous earlier editions of HR In the Know (2/2024 oraz 4/2024). In this article we will discuss the most important issues and changes that appeared in the Act adopted by the Sejm in relation to the previous drafts of the act implementing EU regulations on whistleblower protection.

Common internal reporting procedure

The adopted text of the Act does not differ significantly from the last government draft submitted for consideration by the Sejm. The most important novelty that appeared during the Sejm proceedings is the new Article 28 section 8 of the Act, which introduces the possibility of establishing a common internal reporting procedure by private entities belonging to a capital group within the meaning of Article 4 point 14 of the Competition and Consumer Protection Act of 16 February 2007. However, such a solution will require ensuring compliance with the Act of activities performed under the common internal reporting procedure. This novelty is the legislator's response to the need raised by some employers in the course of legislative works to enable the establishment of a common reporting channel by related entities.

However, the above solution introduces several doubts and does not fully solve the problem raised by employers. The remaining provisions of the Act do not enable entities belonging to the same capital group to establish one common entity or person responsible for all stages of the proceedings regarding a report made by a whistleblower. The only exception is the possibility (already existing in previous drafts) to authorise an external entity only within the scope of (i) handling the receipt of internal reports; (ii) confirming receipt of a report; (iii) providing feedback and (iv) providing information on the internal reporting procedure using technical and organisational solutions ensuring the compliance of these activities with the Act. Therefore, it does not cover the possibility to outsource all obligations imposed on employers under the Act. Moreover, the Act still allows private entities for which at least 50, but not more than 249 individuals perform paid work, to establish common rules regarding the reception and verification of internal reports and conducting investigative proceedings.

Due to the above, the Act introduces only an illusory solution for entities belonging to the same capital group. They will indeed be able to establish a common internal reporting procedure, but each of the related companies should individually process the report received under such a procedure (except for activities for which it is possible to engage an external entity, as described above). As a result, the provisions of the Act regarding capital groups mean that an external entity (e.g. a parent company) will, in principle, only be able to handle the receipt of reports within the entire group, while each employer will have to assess the report itself, conduct an investigatory procedure, and then take follow-up actions.

Vacatio legis

Another issue that we would like to highlight is the fact that the legislator did not extend the vacatio legis period of the Act. During works on the Act, it was proposed to extend the period of its entry into force to 6 months and thus equalize it with the period relating to external reports, arguing that 3 months from the announcement of the Act is too short of a period to prepare to fulfil the responsibilities arising from new regulations. However, the legislator did not decide on such a solution and, therefore, private entities will be forced to implement internal reporting procedures within 3 months, while the provisions regarding external reporting can be implemented within 6 months from the date of the announcement of the Act. Such a short timeframe to prepare procedures may result in future in the numerous irregularities when receiving reports and taking follow-up actions.

The amount of monetary damages for the whistleblower

In HR In the Know 4/2024 we informed that the then draft act of 26 February 2024 provided for minimum monetary damages for a whistleblower against whom retaliatory actions were committed in the amount of 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. This amount has been reduced already in the draft adopted by the Council of Ministers at the beginning of April 2024 to one monthly remuneration determined in the above manner. The new amount was maintained in the Act.

Other changes in relation to the draft discussed in HR In the Know 4/2024

Another change in the Act in relation to the draft of 26 February 2024 discussed in HR In the Know 4/2024 is a change of the catalog of breaches of the law subject to the Act. Breaches in respect of human trafficking and human and civil freedoms and rights have been removed, being replaced with references to breaches in respect of the constitutional human and civil freedoms and rights occurring in an individual's relations with public authorities and unrelated to the areas indicated in the remaining points of the catalogue. Simultaneously, the reference to breaches of labour law was retained, which aroused justified controversy as being imprecise and potentially overlapping with existing regulations on counteracting mobbing and discrimination.

It is also worth emphasizing that in subsequent versions of the draft act that have appeared since we last reported on the status of the act on the protection of whistleblowers, a commercial proxy has also been added to the list of persons who may become whistleblowers. Since this catalogue is open, this is only a technical and clarifying change.