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What an employer should know about the New Whistleblowing Act

June 15, 2021

Why adopt a new Whistleblowing Act when the current act was adopted as late as 2017?

In 2019, the European Council adopted the so-called Whistleblower Protection Directive for the purpose of ensuring a high level of protection for persons who report irregularities in violation of Union law. In response, the Swedish Government appointed a committee in the same year to review the manner in which the Directive was to be implemented in Swedish law. In June 2020, the committee presented its report, “Increased security for whistleblowers” (Committee Report 2020:38) which contained proposals according to which the current Act on Special Protection for Workers against Reprisals for Whistleblowing Concerning Serious Irregularities (the “Current Whistleblowing Act”) was to be replaced by new legislation. The protections in the Current Whistleblowing Act were regarded by the committee as namely being inadequate to satisfy the requirements of the Directive. The main purpose of the legislative proposal was thus to make the reporting of irregularities safer, more secure and easier.                               

It is proposed that the new act be entitled “Protection of Persons Reporting Irregularities Act” (the “New Whistleblowing Act”) and it is more extensive and detailed than the Current Whistleblowing Act. It is proposed that the Act enter into force on 17 December 2021. Set forth below is a description of the most substantial items in the New Whistleblowing Act and the additions which your organisation should keep in mind in particular.      

Substantial similarities to the Current Whistleblowing Act     

  • If a whistleblower is subjected to reprisals as a consequence of his or her whistleblowing, the employer may be obliged to pay damages to the whistleblower.
  • Precisely as the Current Whistleblowing Act, it is proposed that the New Whistleblowing Act cover both the private and public sectors.
  • Agreements which terminate or restrict the employee’s protection in accordance with the Act will continue to be void.
  • The burden of proof is the same, i.e. if the whistleblower demonstrates circumstances which give rise to the presumption that the whistleblower has been subject to reprisals, it is the employer who must demonstrate that reprisals were not taken.
  • The whistleblower may turn to his or her employee organisation for consultations before any report of irregularities is made.

Significant additions relative to the Current Whistleblowing Act 

 

New and expanded group of protected persons

The Current Whistleblowing Act protects only employees (including hired labour), while it is proposed that the New Whistleblowing Act cover self-employed persons, volunteers and interns, persons who are part of a company’s administrative, management or supervisory bodies and shareholders who are active in the company. A whistleblower is also protected to a certain extent prior to the commencement of employment and after employment is concluded. Under certain circumstances, relatives and colleagues of the whistleblower and legal entities associated with the reporting person may be protected under the New Whistleblowing Act.

From “serious irregularities” to “irregularities in the public interest”           

According to the Current Whistleblowing Act, an employee is protected for whistleblowing regarding serious irregularities in the employer’s business which, in principle, has in view offences for which the range of penalties includes imprisonment or comparable irregularities. It is proposed that the New Whistleblowing Act instead cover reporting of irregularities in violation of Union law or Swedish law and other irregularities in respect of which there is a public interest.  Such public interest may exist, for example, where it can be dangerous to use a product on the market or where tax revenues are squandered. Whistleblowing which only concerns the reported person’s own work or employment conditions is not, however, protected by the New Whistleblowing Act unless it concerns very grave irregularities.

Protection in the form of release from liability

Whistleblowers may not be held liable for having reported information covered by a duty of confidentiality if it was necessary to report such information in order to reveal the irregularity. The release from liability does not apply, however, to a deliberate disregard of the duty of confidentiality which, pursuant to the Swedish Public Access to Information and Secrecy Act, restricts the right to communicate and publish information pursuant to the Swedish Freedom of Press Act or the Swedish Fundamental Law on Freedom of Expression. The release from liability also does not cover any right to release documents.                                    

In addition, whistleblowers may also not be held liable for having acquired certain information involving a breach of provisions if it was necessary to acquire the information in order to disclose an irregularity. However, the release from liability does not apply if the person, by virtue of such acquisition, commits a crime.

Obligation for certain employers to establish internal reporting channels 

The committee proposes that employers with 50 or more employees be required to establish at the beginning of each calendar year internal reporting channels and procedures for reporting and follow-up. The legislative proposal is relatively detailed in its description of the manner in which reporting channels are to be set up and the manner of following up on a report and within which time frames. For example, it is to be possible to report both in writing and orally, and the whistleblower must regularly receive detailed follow-ups and feedback. In addition, received reports are to be handled by specially appointed persons or units who shall be both independent and impartial. Deviations from the manner in which the reporting channels are to be designed may be implemented in collective bargaining agreements so long as the collective bargaining agreement respects the rights following from the Directive.

As regards employers who operate private businesses and have 50 – 249 employees, the reporting channels must be in place and applied commencing 1 July 2023. As regards employers in the public sector and employers with over 249 employees, the system must be instead implemented commencing 1 July 2022. Where no reporting channels have been established by the aforementioned dates, the supervisory authority may order the employer to fulfil the legal requirements subject to a fine. It has been proposed that the Swedish Work Environment Authority be the supervisory authority.

It is important to note that the basic protection provided by the New Whistleblowing Act for whistleblowers also extends to employers with fewer than 50 employees. While such employers are not subject to a legal obligation to establish internal reporting channels, the protection against, for example, reprisals for persons who report internally in another manner applies where such channels do not exist.                      

Obligation for certain governmental authorities to establish external reporting channels

According to the legislative proposal, certain specific governmental authorities are also to establish external whistleblowing systems to which a whistleblower can turn directly without first having reported the irregularity internally. Under certain circumstances, a person may also report directly to a governmental authority without reporting via an external reporting channel at the authority. 

Certain additional provisions are to be applied by legal persons who are obliged to establish internal or external whistleblower systems   

The legislative proposal further contains provisions regarding the manner in which personal data is to be processed in conjunction with reporting in internal and external reporting channels, a duty of confidentiality and the manner in which documentation, preservation and destruction of information is to take place. For example, only a limited number of persons may handle personal data and, as a main rule, both written and oral reports are to be documented and preserved, but the information in the reports/documentation is to be destroyed not later than two years following conclusion of the matter. Note, however, that the provisions in this section are proposed to cover only employers with 50 or more employees.

Concluding comments

The New Whistleblowing Act is more extensive than the Current Whistleblowing Act as a consequence of which there are several reasons why an employer is to be cognizant of the changes entailed in the New Whistleblowing Act. If you belong to an organisation with 50 or more employees, it is probable that the largest change is the requirement to establish an internal reporting channel and the handling of received reports. However, organisations with fewer than 50 employees should be aware of the changes entailed in the New Whistleblowing Act since, for example, any internal routines and policy documents may need to be reviewed to ensure compatibility with the New Whistleblowing Act which reaches a larger number of persons, entails a lower degree of disclosure, and protects reporting persons in the form of a release from liability in certain cases.                                                                                           

Vinge is following the process of implementation of the New Whistleblowing Act, and you are naturally welcome to contact us with any questions or thoughts regarding the manner in which your organisation is affected by the New Whistleblowing Act.                  

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Employer bears burden of lack of clarity regarding dismissal        

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