Whistleblowers are individuals who voluntarily and in good faith report or disclose information about abuse, contributing to the prevention of harm and the detection of public-interest risks and threats that would otherwise remain undetected.
Although national institutions and bodies, as well as social organisations, have repeatedly raised the need for regulations to protect such persons, Poland has not yet developed a comprehensive regulation to protect whistleblowers. This is expected to change in the near future, as on 7 October 2019 the Council of the European Union adopted the Directive of the European Parliament and of the Council on the protection of persons who report breaches of Union law.
So far, only fragmentary regulations on protection of whistleblowers, applicable to the financial sector, have been introduced.
In 2015, the Banking Law was amended as a result of the need to implement Capital Requirements Directive IV (CRD IV) on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms in the Polish legal system. The amendment introduced into the Banking Law provisions on protection against at least repressive measures, discrimination or other unfair treatment of employees reporting breaches of the law. It also obliged banks to establish procedures for anonymous reporting of breaches. The detailed manner for operation of protection and procedures was defined by the Minister of Development and Finance in the Regulation of 6 March 2017 on Risk Management System and Internal Control System, Remuneration Policy and the Detailed Method to Estimate Banks’ Internal Capital.
The EU’s Market Abuse Regulation (596/2014) (MAR), in force directly since 3 July 2016, also imposes an obligation on employers conducting business regulated by provisions on financial services to implement internal procedures for reporting breaches of the MAR by their employees.
Another regulation in which the notion of whistleblower appears is the Anti-Money Laundering and Combating Financing of Terrorism Act, in force since 13 July 2018, implementing the EU’s AML Directive (amended in October 2019). The AML/CFT Act introduces an obligation to develop and establish internal procedures for anonymous reporting by whistleblowers, an obligation to keep the identity of these persons confidential, and administrative penalties for companies breaching the act. However, the act applies to a limited circle of financial-sector entities, i.e. banks, branches of foreign banks, branches of lending institutions, and credit unions.
In July 2018, the Act Amending the Unfair Competition Act and Certain Other Acts entered into force. The act regulates the prevention and combating of unfair competition in economic activity, in particular industrial and agricultural production, construction, trade and services. The amended act covers whistleblower protection, excluding liability for disclosure, use or acquisition of information constituting business secrets, among other things, when done in furtherance of a legally protected interest, in the exercise of freedom of speech, or in order to disclose irregularities or misconduct or protect the public interest.
Moreover, the Act Amending the Act on Public Offering and Conditions for Introduction of Financial Instruments into Organised Trading and on Public Companies and Certain Other Acts came into force on 30 November 2019. The amendment implements Shareholder Rights Directive II (SRD II) and introduces a number of significant changes concerning public companies, including the obligation for the general meeting of a public company to adopt a resolution on the remuneration policy for members of the management board and the supervisory board. The amendment also include provisions on whistleblowers’ reporting. In reporting procedures, issuers, companies operating the business of a regulated market, and entities offering transaction reporting services will have to protect their employees who report breaches from at least repressive action, discrimination or other unfair treatment.
Regulations for whistleblower protection also appear in legislative drafts, e.g. in the draft Act on Transparency in Public Life, published on the website of the Government Legislative Centre in 2017. The main objective of this bill is to increase the transparency of the state and management of its assets, and to implement measures to counteract corrupt practices. The bill also grants special prosecutor’s protection to whistleblowers who report the possibility of a crime being committed by an entity with which they have an employment or other contractual relationship. In case of breach of the act, the employer will have to pay compensation to the whistleblower. At present, the bill is at the stage of assessment by the Standing Committee of the Council of Ministers.
The draft Act on Liability of Collective Entities for Acts Punishable by Criminal Law is also at the stage of legislative works. This bill aims to broaden the basis for the liability of collective entities. The bill also provides for regulations protecting persons reporting irregularities in the functioning of collective entities, the obligation for collective entities to introduce a system for reporting and processing irregularities, as well as specific powers enabling courts to counteract negative consequences drawn against whistleblowers.
In addition, nongovernmental organisations have also taken steps to address whistleblower protection comprehensively. The Stefan Batory Foundation, the Helsinki Foundation for Human Rights, the Institute of Public Affairs, and the Solidarity ’80 trade union drafted a bill initiated by citizens to protect whistleblowers and held a public hearing on the proposal in September 2018.
Whistleblowers in case law
Despite the lack of comprehensive regulations, the need to protect whistleblowers has also been recognised in the decisions of the courts in Poland. For example, the District Court for Wrocław-Śródmieście, citing case law of the European Court of Human Rights, drew attention in its ruling to the existence of whistleblowers who are punished or fired for disclosing irregularities (judgment of 7 June 2013, case no. X P 384/13). In that case, the court agreed with an employee reporting irregularities in the employer’s actions and set aside the disciplinary action imposed on her. The Piotrków Trybunalski Regional Court also pointed out that whistleblowers are persons who, acting in good faith, report or disclose information about irregularities occurring in the workplace that harm the public interest or the interest of the employer (judgment of 29 November 2016, case no. I C 805/15). That court went on to hold that such persons cannot suffer negative consequences from reporting their doubts to the employer, and that initiation of a proceeding as a result of reporting irregularities does not violate the employer’s personal interests and hence may not be penalised. The court there dismissed the employer’s claim for infringement of personal interests brought against employees reporting irregularities in the employer’s behaviour.
A comprehensive regulation is on its way
The directive adopted on 7 October 2019 establishes common minimum standards for the member states for the protection of whistleblowers, including an obligation to introduce procedures for internal reporting and for follow-up on the reporting of breaches. Member states have until 15 May 2021 to implement the directive. The directive will apply to legal entities operating in the private sector, employing at least 50 persons (coverage of entities employing fewer than 50 is left to the discretion of the national lawmakers) and entities operating in the public sector.
The directive provides protection against any form of retaliation, direct or indirect, undertaken or tolerated by an employer, customer or service provider, or by persons working for or on their behalf. The retaliatory measures against which the directive protects whistleblowers include suspension, compulsory unpaid leave, demotion, relocation, pay cuts, negative performance reviews, disciplinary measures, discrimination, termination of employment, and ostracism. Additionally, whistleblowers must be provided access to support measures. Protective measures for whistleblowers also apply to third parties assisting or linked to whistleblowers.
The directive lays down standards for whistleblower protection in areas such as:
- Public procurement
- Financial services, products and markets, and AML/CFT
- Product safety
- Transport safety
- Environmental protection
- Public health
- Consumer protection
- Protection of privacy and personal data, and security of networks and IT systems
As part of the procedures for internal reporting, the directive provides for the following obligations:
- Establishment of internal channels for receiving reports, ensuring the confidentiality of the identity of the reporting person and the person whom the report concerns
- Confirmation of receipt of a report within 7 days
- Designation of an impartial person or department to follow up on reports
- Diligent follow-up on reports
- Providing feedback within three months of the report
- Providing clear and easily accessible information regarding reporting procedures.
Furthermore, the directive introduces an obligation to provide in national legislation for effective, proportionate and deterrent sanctions against natural or legal persons who impede reporting, retaliate, initiate onerous proceedings against whistleblowers, or breach the obligation to keep the identity of whistleblowers confidential. Member states are also required to provide for penalties for persons knowingly reporting false information and for compensation measures for damage resulting from such reporting.
The entry into force of the new directive and the increasingly comprehensive protection of whistleblowers may result in major changes in labour law and a need for employers to develop new regulations or adjust their existing regulations accordingly.
Agnieszka Lisiecka, Rozanna Piela-Wojciechowska