On 23 May 2024, Parliament adopted the long-awaited draft law on the protection of whistleblowers (which is supposed to implement the European Parliament (EU) Directive 2019/1937 on the protection of the rights of whistleblowers of 23 October 2019). After more than two years after the deadline for implementing the EU legislation, it seems likely that employers (and whistleblowers) will finally live to see legislation that has caused them so much concern.

Admittedly, the bill still must be passed by the Senate and then signed by the President before it can enter into force. However, many significant changes to its content are unlikely.

The draft law provides for a broad package of criminal sanctions and claims for persons to whom its provisions have been incorrectly applied. In view of the imminent entry into force of the whistleblower provisions, it is certainly worthwhile to become familiar with the potential consequences of violating them.

Criminal sanctions for violating the Whistleblower Protection Act

Legislators, bearing in mind requirements of the directive, imposed numerous sanctions in the draft act for violations of certain obligations by entities obligated to protect whistleblowers (e.g. employers) and by persons reporting violations of the law in bad faith. Criminal provisions are fully regulated in Chapter 6 of the proposed act.

The draft law provides the following list of offences:

In particular, the latter offence in the draft is welcome. Sanctions, the very sanctioning of manifestly unfounded internal reporting, may have a preventive effect on whistleblowers and thereby prevent the reporting of manifestly false information with the sole purpose of creating confusion and disorder.

In the case of criminal offences, a fine (which, in our opinion, will be the most frequently applied penalty) is imposed in daily rates ranging from 10 to 540. The amount of a daily rate may range from PLN 10 to as much as PLN 2,000. Therefore, the amount of a fine may range from PLN 100 to as much as PLN 1,080,000.

The draft also sanctions failure to establish an internal reporting procedure or the establishment of such a procedure in material breach. Such a prohibited act will only constitute an offence punishable by a fine. The draft does not specify its amount, which means that its level will be determined on the basis of the Misdemeanours Code. A fine from PLN 20 to PLN 5,000 may therefore be imposed.

Damage claims under the Whistleblower Protection Act

In principle, the draft law allows a whistleblower against whom retaliation took place, as well as a person who incurred harm due to the whistleblower knowingly reporting or disclosing untrue information to the public to seek compensation and/or damages.

Claims by a whistleblower against whom retaliatory action has been taken

The draft law explicitly states that the amount of compensation for a whistleblower against whom retaliatory action has been taken cannot be less than the average monthly salary in the national economy in the previous year, as announced by the President of the Central Statistical Office in Monitor Polski. The upper limit of compensation is not capped, as the bill only regulates its minimum. Both compensation and redress will be regulated by general principles of the Civil Code. Therefore, a whistleblower against whom retaliatory action has been taken will have to demonstrate:

• the event giving rise to damage (or so-called 'non-material damage' in the case of a compensation claim),
• level of incurred harm,
• and a causal link between that event and suffered harm, that is, to show that the conduct of the person in question caused harm (or damage) of a certain value.

As indicated in the justification of the Whistleblower Act, compensation that a whistleblower will be able to claim will constitute an additional remedy. The draft emphasises that if retaliatory action against a whistleblower takes a form for which a separate sanction is provided in labour or civil law (e.g. for harassment, discrimination, wrongful termination of employment or violation of personal rights), the violator of such action will also be liable for these other violations, irrespective of the sanction provided for the retaliatory action.

Claims by a person who suffered harm as a result of a whistleblower reporting false information

A person who incurred harm as a result of a whistleblower knowingly reporting or disclosing untrue information to the public (e.g. employer or person to whom the report pertains) will also have the right to compensation and/or redress. In this case, the source of liability according to the wording of the proposed act shall be the infringement of personal rights of such person. This means that any possible claim for liability will also be based on Civil Code provisions. Similarly as in the case of a whistleblower against whom retaliatory action was taken, such person will have to prove the event causing damage, its amount and a causal link between the event and the occurrence of damage.

In such case lawmakers did not decide to regulate the minimum amount of compensation. Its amount will therefore depend on the specific factual situation and extent of harm caused by reporting false information. It is also worth noting that the drafters used the word "knowingly". Thus, it may be anticipated that possible claims by a person injured as a result of actions undertaken by a whistleblower will require proof of such awareness, which may often be a difficult task.

What should employers do to counteract situations justifying penalties against them set forth in the bill?

First, entities required to establish an internal notification procedure should not prolong its introduction. The deferment period set in the draft law is three months from the date of publication of the law in the Official Gazette, so the period for implementing a relevant procedure is not too long. Such procedure should, of course, meet all requirements of the whistleblower law. Properly tailored and compliant internal regulations, as well as their correct application in practice, are guarantee no objections from law enforcement authorities.

In addition to the latter, employers should instruct employees about the importance of whistleblowing at the workplace from the start of internal reporting procedures. Employees must also be aware that not only whistleblowing behaviour by the employer or those acting on its behalf that is penalised (and gives rise to liability for damages) is improper. Sanctions are also foreseen against those who report in bad faith, knowing that the information they provide is not true.

Przemysław Zając