A whistleblower is not an enemy: what companies can gain from the implementation of whistleblower protection laws

As early as 2021, EU law mandated the implementation of whistleblower protection regulations into Polish law. Three years later, in September, the appropriate regulations will finally come into effect.

The new obligations will impact approximately 32,000 companies and 16,000 public entities. In this article, we will explain who the new regulations affect, who qualifies as whistleblower, what their protection entails, and which entities must or can implement these procedures.

Who is whistleblower

The Whistleblower Protection Act, passed in June this year, will come into force on September 25, 2024. The new law aims to increase transparency and accountability in Polish companies. Importantly, it applies to both private and public sectors.

The Act defines a whistleblower as a natural person who reports or publicly discloses information about legal violations obtained in a work-related context.

This applies not only to full-time employees but also to temporary workers and individuals providing services under civil contracts, entrepreneurs, shareholders, members of legal entities’ boards, interns, volunteers, officials, and soldiers.

The adopted regulations aim to provide protection for these individuals if they report legal violations.

Who is required to implement internal reporting procedures

In Poland, the obligation to establish internal reporting procedures applies to private and public entities that employ or contract at least 50 people for paid work, as of January 1 or July 1 of a given year. Exempt from this obligation are organizational units of municipalities or counties with fewer than 10,000 residents.

The count of 50 people includes employees (converted into full-time equivalents) and individuals providing paid work under any contract other than employment.

Workplaces with fewer than 50 people performing paid work are not required to implement procedures, but it is worth considering.

The Act in practice

The new regulations require companies and institutions to create internal reporting channels. These are meant to facilitate the reporting of legal violations in verbal, written, or electronic form while ensuring the confidentiality of the identities of all parties involved.

Workplaces must also develop and implement detailed procedures for handling reports, specifying verification steps and corrective actions, as well as conduct regular training sessions for employees. The goal is to inform them of their rights, responsibilities, and mechanisms of protection against retaliation.

Additionally, the reporting system must be regularly monitored and updated to ensure its effectiveness and compliance with the law. This will help build trust and promote a culture of transparency and accountability within the organization.

Whistleblower under protection

Employees can report violations in three ways: through internal reporting channels established by private and public entities, external reporting to relevant state bodies (e.g., the Ombudsman), or through public disclosure.

Regardless of the chosen method, once a violation is disclosed, the employee is granted protection, provided there are reasonable grounds to believe that the reported or disclosed information is true and that it concerns a legal violation.

No retaliatory actions or attempts at such actions can be taken against the whistleblower. If the whistleblower is or was employed, or is expected to be employed, they cannot be discriminated against by refusal of employment, dismissal, reduction in pay, withholding promotion, demotion, mobbing, or any other form of discrimination.

Retaliatory actions also include attempts or threats of such actions. A whistleblower who falls victim to retaliation is entitled to compensation or redress.

On the other hand, a person harmed by knowingly false information reported by a whistleblower has the right to seek compensation or redress from the whistleblower for personal rights violations.

The consequences of failing to implement internal reporting procedures

The Act provides for the possibility of imposing a fine on employers if they fail to establish a reporting procedure or do so in violation of significant requirements.

In this context, the introduction of whistleblower protection laws may be seen by employers as an additional burden. However, it is worth viewing this revolutionary obligation from the perspective of the benefits it can bring to an organization.

Obtaining information about irregularities within the company allows for quick corrective action, avoiding legal and financial consequences, and protecting the company’s reputation.

Adapting companies to the new law

The ability to report violations through whistleblowers is highly valuable to comapnies. It is worth considering in workplaces with fewer than 50 employees as well.

Introducing whistleblower tools, even for businesses not required to do so, can prevent or limit the damage caused by violations, thanks to a quick response.

The new regulations also present an ideal opportunity to introduce other internal polices, such as codes of ethics or anti-mobbing procedures.

Although implementing the new laws may be challenging, it is worth analyzing all the pros and cons, and seeking professional assistance if necessary.