Whistleblower protection in the EU – an anniversary and a paradox

This autumn, we celebrate the first anniversary of the official adoption of the EU whistleblower protection directive (Directive EU/2019/1937). 

Although its material scope is limited, the directive still marks the first time a uniform legal framework has been established across Europe (or any international level) to protect whistleblowers, and has the potential to trigger far-reaching changes to European whistleblowing regulations across different sectors. 

The directive aims at better protecting whistleblowers as current protections are fragmented or only partial across EU member states, with only about 10 countries offering a comprehensive system at the time of the adoption last year. More specifically, the directive looks at introducing ‘common minimum standards’ to protect employees of the private or public sector from retaliation for reporting breaches of laws in specific EU policy areas (eg product safety, financial services, public health, terrorism financing and more), where such violations or abuses may cause serious harm to the public interest or where there is an identified need to strengthen enforcement. (Read more about the directive in our 2019 briefing.)

The implementation of the directive by member states is only due by December 2021, but it is interesting to take a look at both the directive and at Freshfields’ 2020 whistleblowing survey results, in parallel. 

As part as of our on-going review of whistleblowing culture over the years we gathered the views of over 2,500 individuals in the UK, US, Hong Kong, Germany and France over May and June this year, to assess their attitudes towards whistleblowing, and to consider how these have changed since our last survey in 2017. The Freshfields whistleblowing survey 2020, which was published this October, reveals that the trust in internal whistleblowing arrangements is trending downwards overall in comparison to our 2017 data, including in Europe. Our survey further shows that there has been a general decrease in those who have been involved in whistleblowing, as well as a decline in confidence with regards to support from senior management for those who blow the whistle.

As we gathered the data during the start of the COVID-19 pandemic, when widespread homeworking arrangements were already in place for a significant portion of the global workforce, the survey offers a unique insight into the possible future trend for whistleblowing in our altered working environment.

The decrease in willingness to speak up came as a surprise for us in Europe as one might have expected that, with the adoption of a protection regime for whistleblowers at EU level in October 2019, employees would have felt more comfortable to speak out. It looks like the intended positive impact of the directive has not been felt (yet). 

Although the scope of the directive is limited to the reporting of breaches of selected EU laws, the EU Commission was hopeful that this new set of rules would create a new dynamic and set the scene for broader whistleblowing and protection regimes across Europe. We will have to see how member states will implement the directive and whether they will go beyond and introduce broader and even more protective regimes and what the impact will be on employees’ perception and behaviour.

There was also an expectation that the COVID-19 pandemic and home working would trigger more reportable situations, such as cases of breach of law, cases of fraud, but so far the trends seem to be downward as well. We have to keep this under review in the months to come, as we might still experience an increase in COVID-19 related whistleblowing.

The lack of confidence in internal systems as highlighted by the survey results is a source of concern for employers. Many employees have been working from home over the past few months, often on a full-time basis, thus physically distant from their employer’s premises. This distance may have influenced behaviour, with employees less likely to go the internal route and more likely to go directly to the authorities (or, even more concerningly, the media or social media) if there is something they would like to report on. It is almost like the EU Commission had anticipated this attitude, as the directive gives the whistleblowers the opportunity to choose the most appropriate reporting channel (internal or external), once certain conditions have been met.

The next few months will be important for speak-up culture as employers continue to adjust to the pandemic and as we all become more familiar with the long-term impact of prolonged home working. One can also expect member states to focus on the directive’s implementation ahead of the December 2021 deadline. Only a few countries so far have announced plans, which is unsurprising in these unprecedented times. Among those who made announcements, it is worth noting that both Luxembourg and Sweden intend to broaden the scope of the directive in order to include breaches of national laws (on top of breaches of EU law).

In the meantime, employers may want to keep reviewing their whistleblowing systems, perhaps with a focus on internal reporting, and on clear and positive communication to encourage their use.

The survey data suggests that there is still work to do towards strengthening corporate culture around this important aspect of risk management.