HR In the Know 2/2024

A draft Act on the protection of persons reporting breaches of law (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"), also commonly referred to as the Whistleblowing Directive, has been entered into the list of legislative and programme works of the Council of Ministers under number UC1. 

The draft is dated 8 January 2024 and constitutes the next (already tenth) published version of the proposed legislation implementing the Directive into the Polish legal system. This time, however, according to the list of legislative and programme works of the Council of Ministers, the Draft is treated as urgent. This is due to the expiry of the deadline for implementation of the Directive, which passed on 17 December 2021, and the pending proceedings against Poland before the Court of Justice of the European Union. The planned date of adoption of the Draft by the Council of Ministers is Q1 2024. At the moment, it is not possible to state clearly when exactly the new regulations will come into effect, but it appears that the intention is to enact them as soon as possible. In this article, we present an outline of the most important provisions adopted in the Draft based on its current version. 

Who will be affected by the new regulations?

The new regulations will apply to all legal entities (defined very broadly in the Draft) operating on the market with the exception of the obligation to establish an internal whistleblowing and follow-up procedure (the "Procedure"), which will, in principle, only apply to entities where at least 50 persons perform or provide work (with certain exceptions discussed below).

Deadlines - or what can (and should) be done today?

According to the current wording of the Draft, the deadline for the Act to enter into force (once enacted) will be one month from the date of its announcement. Thereafter, legal entities required to implement the Procedure will have another month to do so. This deadline seems extremely short considering the number of actions that will have to be undertaken, including the drafting of the Procedure, deciding on its wording and the solutions to be adopted, organising and conducting the election of representatives of persons providing work for the legal entity (in the absence of trade unions) and conducting consultations. These obligations will also apply to entities that have already introduced the relevant internal policies before the entry into force of the new legislation. In view of the above, we recommend preparing for the obligation to implement the Procedure in advance. We note, however, that it will only be possible to undertake basic preparatory actions before the entry into force of the Act, such as, for example, the preparation of draft regulations for the election of representatives and the Procedure itself. Nevertheless, this should make it easier to meet the statutory deadline (unless it is extended in the final enacted law).

Who will be protected?

The main assumptions of the Draft have not changed significantly in relation to the previously published draft provisions implementing the Directive in Poland. Thus, protections will be available to any natural person who reports or publicly discloses, in writing or orally, information on a violation of the law (including reasonable suspicion or information on a potential violation of the law) obtained in a work-related context. Not only employees are listed as an example, but also, inter alia, persons providing work on a basis other than employment, including under a civil law contract, or persons providing work under the supervision and direction of a contractor, subcontractor or supplier, including under a civil law contract. However, this is an open catalogue, which means that any natural person meeting the conditions indicated above, not necessarily explicitly indicated, may be protected, including those making a notification or public disclosure before a legal relationship with the given legal entity has been established or when such a relationship has already ceased. 

Protection is to be granted on the basis of the whistleblower's reasonable grounds that the information being reported or publicly disclosed is true at the time of reporting or making a public disclosure and that it constitutes information about a breach of the law. This means that the whistleblower will not have to be absolutely certain in the above regard. 

Provision is made for a prohibition of any retaliatory actions against the whistleblower and attempts or threats of such actions, shifting the burden of proof to the legal entity that the action in question was not retaliatory. Accordingly, the whistleblower will only have to identify the actions that he or she believes constitute retaliatory actions. A whistleblower against whom such actions have been committed will be entitled to compensation in full. 

Broad catalogue of potential breaches of law

A breach of the law is to be understood as an unlawful act or omission, or one intended to circumvent the law, relating at least one of the areas listed in the Draft. The list of these areas has been significantly extended in relation to the Directive, which highlighted only certain provisions of EU law.

Obligation to establish an internal reporting channel

The Draft introduces an obligation for legal entities, for which at least 50 persons perform or provide work, to establish an internal reporting channel in the form of a Procedure. Entities performing activities in the areas of financial services, products and markets, anti-money laundering and anti-terrorist financing, transport safety and environmental protection, covered by the EU’s legal acts listed in the Directive will be required to implement the Procedure regardless of the aforementioned threshold. Other entities, not meeting the requirements indicated above, may establish the Procedure voluntarily. Importantly, the protection of whistleblowers provided by the Draft applies regardless of the number of engaged individuals.

The implementation of the Procedure will require consultations with trade unions operating in the given legal entity or, in the absence thereof, with representatives of persons providing work for the given legal entity elected in accordance with the procedure adopted by the given legal entity. It seems that in the current wording of the Draft, the drafters intentionally did not refer to the representatives of employees elected for other needs under labour law. In most cases, therefore, any non-unionised entity will be forced to elect the aforementioned representatives for the purpose of consultation and will not be able to rely on previously elected employee representatives. Moreover, this body should comprise not only employees but also other persons performing work for the entity, including under civil law contracts.

On the other hand, the introduction of a minimum (5 days from the date of presentation of the draft Procedure) and a maximum (10 days) duration of the consultation should be viewed positively. This will speed up the process. The Procedure is to enter into force 7 days after it has been made known to persons performing the work, in the manner adopted by the legal entity concerned. The relevant information will also have to be communicated to job applicants (regardless of their legal basis) with the start of recruitment or pre-contract negotiations. 

External reporting 

A key novelty with regard to external reporting is the return of the concept of the Polish Ombudsman as a body with special responsibilities with regard to them, including in particular the duty to receive external notifications, to carry out an initial review of them and to forward them to the public authority competent for following-up. The Ombudsman was designated in the first drafts of the legislation implementing the Directive, being subsequently replaced by the State Labour Inspectorate, which, however, publicly opposed the idea of being given new responsibilities due to a lack of resources to carry them out.