Are you ready for the Belgian transposition of the Whistleblowing Directive?
27 Oct 2022
In 2019, Directive (EU) no. 2019/1937 on the protection of individuals who report breaches of Union law – colloquially known as ‘the Whistleblowing Directive’ – was adopted. The Whistleblowing Directive should have been transposed into Belgian legislation by 17 December 2021, a deadline that Belgium clearly missed. The draft act transposing the Whistleblowing Directive into Belgian law was eventually submitted to the Chamber on 11 October 2022, is expected to be voted into law soon and will enter into force two months after its publication in the Belgian Official Gazette. Taking into account this timing, companies – certainly those employing 250 employees or more – that haven’t taken action yet, should start preparing today.
In this newsletter, we’ll briefly outline the private sector implementation of the Whistleblower Directive’s guidelines in Belgium, based on the text of the Directive itself and the draft Belgian transposition act.
Introduction
As evidenced by several high profile cases in recent years, whistleblowing can make a significant contribution to identifying and uncovering (major) breaches of law. The Whistleblowing Directive introduced a set of common standards throughout the EU to not only make sure that the necessary and appropriate reporting channels are available in this respect, but also that whistleblowers enjoy protection from retaliation.
Material and personal scope
The Directive is aimed at protecting individuals who report breaches of a number of specific areas of Union law. Article 2 of the Directive details these areas, which include – but are not limited to – public procurement, financial services, protection of the environment, public health and consumer protection. Breaches that affect the financial interests of the Union and breaches related to the internal market are covered by the Directive as well. The draft transposition act reproduces the Directive’s material scope verbatim, however, also expands on it by including tax and social security fraud as well.
The Directive’s principles are applicable to all individuals who obtained information in a work-related context. As such, not only employees are included, but also self-employed individuals, trainees, ex-employees, service providers, etc.
Reporting channels
In order to introduce an all-encompassing reporting system for whistleblowers, the draft transposition act provides for three different reporting channels, in accordance with the Directive:
an internal channel within the company or organisation;
an external channel, set up by the government;
public disclosure, e.g. via the press.
The Directive and the draft transposition act start from the guiding principle that relevant information on breaches should – where possible – swiftly reach the level that is closest to the source of the issue and where it can be remedied as efficiently as possible. It therefore encourages reporting through internal channels where feasible. This, however, doesn’t detract from the whistleblower’s prerogative to use the channel that they deem to be the most appropriate for their reporting.
Internal channel
Every company with 50 or more employees will have to set up an internal reporting system that has to be secure, impartial and confidential. However, companies providing specific financial and economic services will have to establish an internal reporting channel as soon as they employ one employee. With respect to the establishment of an internal reporting channel, the Belgian transposition act requires the appointment of a reporting manager, which can be someone in the company (e.g. an HR director) but can also be an external, specialised provider. Reports can be filed in writing, on the phone or in person and can be filed anonymously in companies employing 250 employees or more. Any report must be answered within a maximum term of three months.
The draft Belgian draft transposition act uses the Directive’s possibility to postpone the entry into force of the requirement to establish an internal reporting channel for companies that employ 50 to 250 employees until 17 December 2023. Companies employing 250 employees or more, however, will have to comply immediately once the Belgian legislation enters into force, i.e. two months after publication of the transposition act in the Belgian Official Gazette.
Note that the above employee thresholds concern the average number of employees employed by the legal entity, calculated in accordance with the regulations that are applicable in the context of the social elections.
External channel
With respect to the requirement to introduce an external reporting channel, the Belgian transposition act designates the Federal Ombudsman as the coordinating body. The Ombudsman will receive the whistleblowing reports and will dispatch them to the appropriate subject matter-specific body or industry-specific body (such as the Financial Services and Markets Authority, the Belgian National Bank and the Data Protection Authority).
Public disclosure
Where internal or external whistleblowing doesn’t result in appropriate action, if there are serious reasons to believe that there’s an immediate threat to the public interest, or if there’s a risk of retaliation or destruction of evidence, a reporting can also be done via public disclosure.
Protection against retaliations
The Whistleblowing Directive provides protection against retaliation – or the threat of retaliation – for individuals who report a breach via an internal channel, external channel or public disclosure. The Directive provides for a broad definition of retaliation; this not only includes suspension and dismissal, but also inter alia demotion or withholding of promotion, changing the terms of employment, intimidation and blacklisting. Note that, in order to be protected against retaliation, the whistleblower should in principle have reasonable grounds to believe that the matters reported by them are true. This condition acts as a safeguard against malicious or frivolous reporting.
A whistleblower who suffers retaliation is entitled to an indemnity that ranges between 18 and 26 weeks salary, or – if the whistleblower is no employee – equals the actual damages. In case of retaliation after reporting a breach related to financial services, products and markets, or the prevention of money laundering and financing of terrorism, the whistleblower can choose between an indemnity that’s equal to 6 months salary (of course only possible for employees) or one that equals the actual damages.
The draft transposition act provides for a reversal of the burden of proof before the competent courts. If an individual shows that they reported a breach covered by the transposition act and faced a disadvantage, the latter will be rebuttably presumed to constitute a retaliation for the report.
Sanctions
The Belgian draft transposition act provides for several specific sanctions. First of all, non-compliance with the obligation to set up an internal reporting channel will be sanctionable with a level four Social Penal Code sanction, i.e. either imprisonment of six months up to three years and/or a criminal fine of EUR 600 to EUR 6,000 or an administrative fine of EUR 300 to EUR 3,000.
In addition, a private sector legal entity, the members of its personnel, as well as each natural person that
impedes or tries to impede a reporting;
retaliates against a whistleblower;
initiates unnecessary and vexatious proceedings against a whistleblower or;
violates the obligation to keep a whistleblower’s identity confidential
will also be punishable by imprisonment of six months up to three years and/or a criminal fine of EUR 600 to EUR 6,000.
Implementing a whistleblowing system in your company
The act transposing the Whistleblowing Directive into Belgian law will soon enter into force. Is your company ready for the new rules on whistleblowing and aware of all the legal implications?
Establishing a compliant internal system for whistleblowing is a multi-faceted endeavour that lies at the cross-road of several different types of expertise, such as legal, HR and technology. Transparent communication towards the existing employee representative bodies and easy accessible policies and tools are key to ensuring effective reporting. Whistleblowing also involves the processing of personal data, triggering the obligation for your company to comply with the applicable GDPR requirements.
PwC Legal has an extensive team of legal experts who specialise in assisting companies in complying with the Whistleblowing Directive in an employment context. Working closely with PwC’s Forensic specialists, PwC Legal can assist your company by providing pragmatic guidance in the preparation, implementation and management of a compliant whistleblowing system in your company.
Looking for more insight into what the principles of the Belgian transpoof the Whistleblowing Directive mean for your company or how PwC Legal can assist you in this respect? Don’t hesitate to reach out; we’d love to hear from you.
Contact us
