Can your business meet the requirements of whistleblower protection under the Whistleblowing directive in the Nordics?

Finland

The Finnish Act implementing the Whistleblowing directive will enter into force in the near future, prompting changes to many businesses. The Finnish implementation is delayed slightly, and the Government proposal concerning the Finnish whistleblower act draft is scheduled to be presented to the Finnish Parliament during week 23. Hence, the obligations of the new act are expected to come into force both urgently and broadly.

According to the Finnish act draft, all companies employing 50 or more people must establish an internal reporting channel. However, the act includes a transition period for establishing a reporting channel in businesses regularly employing 50–249 people that extends to 17 December 2023. In Finland the estimated presentation week of the government proposal is at the beginning of June 2022.

A whistleblower is protected for reporting crimes, breaches, misuse and other acts or omissions under the scope of the act. Moreover, it is important to note that all businesses employing over 50 people must establish a reporting channel, even though the scope of the act has been limited to certain sectors, such as product and transport safety, environmental protection, consumer protection, and data protection. Thus, establishing a reporting channel in itself is not sector specific.

In practice, what makes whistleblower protection interesting in terms of employment law, is that in certain situations a person who has made an appropriate report through reporting channel cannot be subjected to negative retaliatory measures, such as warning or termination of the employment of the whistleblower. Interestingly, for example offering a termination agreement to the whistleblower is listed as a prohibited retaliation. Furthermore, it is good to note that there does not seem to be any time frame for obtaining whistleblower protection set in the proposal. Hence, ambiguity may in practice arise as to the type and time frame of supervisory measures the employer may take as regards to the whistleblower. Surely causality between these things must be found, and the temporal connection cannot be perpetual either.

Establishing a reporting channel will bring about some additional administrative bargain to the businesses, since channels are established and personnel is educated. However, the reporting channels will result in benefits to the employers as well. The most significant advantages come from the fact that previously problematic issues in case law will be resolved with regard to an employee’s right to bypass the employer’s organisation and, for instance, report the matter straight to a supervisory authority or publish the information. Under the new whistleblowing act draft, employers can effectively direct all the reports to themselves through internal reporting channels. Only if a reporting channel has not been established could a report be filed straight to the supervisory authority.

Thus, the new legislation significantly protects the employer and grants an investigation monopoly to the employer for at least the three-month timeframe in which additional measures should be engaged in.

Many businesses have existing reporting channels already, and the new proposal would also clarify the position of such channels. In addition, the proposal includes instructions for corporate groups in regards to whether a common reporting channel could be established for the whole group.

Denmark

In Denmark, the Ministry of Justice enacted the Act on the Protection of Whistleblowers on 24 June 2021 (the “Danish Act”) implementing the EU-Whistleblowing Directive. The Danish Act came into force on 17 December 2021 simultaneous with the expiry of the implementation deadline set by the EU Commission.

Thus, unlike Finland and many other European Union member states, in Denmark the EU Whistleblowing Directive has been implemented within the deadline.
As with the Finnish Proposal, the Danish Act entails that employers (private as well as public) with more than 50 employees must establish an internal whistleblower scheme, i.e., an internal reporting channel. However, for employers within the private sector with between 50 to 249 employees, the obligation to establish an internal whistleblower scheme does not come into force before 17 December 2023.

In Denmark, establishing an internal whistleblower scheme is also not sector specific.

The scope of the Danish Act amounts to breaches of certain areas within EU-legislation as well as “serious offences and other serious matters” which does not follow from the EU Whistleblowing Directive. Thus, the scope of the Danish Act is wider than required under the Directive.

Under the Danish Act, a whistleblower is protected from retaliatory measures, if the whistleblower makes a report in good faith of the accuracy of the information at the time of the reporting. Retaliatory measures are defined as any form of disadvantageous or unfair treatment of the whistleblower as a result of the reporting, e.g., warning, demotion, refusal of salary increase, harassment or termination of employment. Unlike the Finnish proposal it appears that offering the whistleblower a severance agreement is not by itself considered a retaliatory measure.

As dictated by the Directive, the Danish Act introduces a dual burden of proof: If an employee can prove that (s)he has reported in accordance with the requirements and subsequently was subjected to disadvantageous or unfair treatment, the burden shifts to the adverse party (the employer) to prove that the treatment did not relate to the reporting.

A theoretical downside could be that the protection of whistleblowers could lead to a “race to report” in the event of rumours of imminent redundancies etc. Whereas a clear upside is that the employees should feel safe in reporting breaches covered by the Act, as their employment is, in principle, protected.

In continuation hereof it is worth noting that, if an employment is terminated for an employee having filed a report covered by the Danish Act, he or she may as a main rule demand to be reemployed instead of claiming compensation for unjust termination.

Like the Finnish proposal, the Danish Act entails that group of companies may share reporting channels and investigative capabilities. However, the Danish Minister of Justice has the authority to disallow group-wide shared schemes for larger private companies with 250 or more employees, as the EU Whistleblower Directive “merely” allows for legal entities in the private sector with 50 to 249 workers to share resources. It will be interesting to see in the near future how the Minister of Justice’s ability to revoke such group-wide shared whistleblower schemes will be implemented and used.

Sweden

The EU Whistleblowing Directive was implemented in Sweden on 17 December 2021, and it replaced the previous local Swedish whistleblowing legislation from 2017. Thus, from a Swedish perspective, it is interesting to compare some of the differences between the new and old legislation.

As a starting point, the new Whistleblowing Act is much more detailed. There is a new duty to establish internal reporting channels, as is the situation in Finland and Denmark, and the whistleblower’s identity is now protected by the strongest level of secrecy.

Another keychange in Sweden is that a wider circle of people will now be covered by the new act. Previous legislation was only applicable to employees and contractors (“inhyrda arbetstagare”), whereas the new legislation will also include work applicants, self-employed, volunteers, interns, company management and shareholders who are active in the business.

Furthermore, the previous legislation was only applicable to employees reporting on serious misconduct (“allvarliga missförhållanden”), which in principle was comparable to crimes carrying a prison sentence. The new legislation goes further to protect those who blow the whistle on misconduct that is of public interest, which could for example be violation of laws applicable to the company or that a company is producing and selling products that are dangerous.

The Swedish Work Environment Authority (Arbetsmiljöverket) is now the supervisory authority for the company reporting procedures, this is also new as there was previously no such supervision.

Pan-Nordic approach?

Even if the Finnish act on whistleblowing has not yet been passed, the obligation to set up a whistleblowing in all the Nordic countries is right around the corner. Many companies are currently taking measures to verify that their channels are in place, and many are adopting a pan-Nordic approach to the matter. Should you have any questions in relation to the matter, our experts are happy to assist.