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ОглавлениеChapter I Whistleblower Protection in Selected Legislatures
Currently, there are many legal regulations in the world that are comprehensively or at least in part relate to the protection of whistleblowers. More and more countries have recently adopted special legislation to protect whistleblowers, example being Italy or France. We can observe a different approach to the issue in each country. Among other things, this is due to the historical experience of individual countries. Many European countries have experienced totalitarian regimes in the past, so it is not surprising that their citizens still feel uncomfortable with any form of disclosure.36 These countries include Poland, whose legislation on the protection of whistleblowers is discussed later in this paper. Not without significance are also cultural factors that occur in individual countries. The literature indicates that all forms of “snitching” are negatively perceived, for instance, in Italy.37
The following analysis covers the legal regulations concerning the protection of whistleblowers in selected countries around the world, i.e. the USA, the United Kingdom, Romania, Slovenia, Ireland, Italy, and France. Moreover, the analysis presents the general assumptions of legal protection in this field adopted in several other countries.
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1.2 Whistleblower Protection in Selected Legislatures around the World
1.2.1 The United States of America
In the United States of America, there is an elaborate system of legal protection for people who report irregularities.38 As the crime rate in accounting and corporate governance increased, the US government tended more to ensure the protection of whistleblowers. The issues of entities such as Enron and WorldCom generated interest in whistleblowers’ activities among the public and, consequently, among politicians. However, the literature indicates that despite the benefits whistleblowers bring to society, their protection in the USA remains an “inconsistent legislative patchwork.”39 Let us note that there are many state and federal laws about reporting irregularities, which vary significantly.40 However, laws in this field often interact with each other and overlap at the state and federal levels.41 There is no single act that comprehensively covers all whistleblowers’ activities throughout the country, in both public and private sectors regardless of the sector in which they operate. Among the most important acts that protect whistleblowers in the USA are The False Claims Act42 (1863) and the ←20 | 21→Whisteblower Protection Act43 (1989), which mainly refers to the public sector, along with the Sarbanes-Oxley Act44 (2002) and the Dodd-Frank Act45 (2010), which refer to the private sector.46
Besides strictly jurisdictional solutions, institutions also conduct activities47 that result, for instance, in the establishment of the National Whistleblowing Center in 1988. It operates in the whole USA and seeks public support and legal aid for people reporting violations.48 Moreover, there is the Office of Special Counsel,49 which assists whistleblowers who work in state agencies.50
Due to the highly complex system of protection for whistleblowers in the USA, it would be impossible to analyze all the legislation in this area. For the purposes of this study, the following chapter contains only a general overview of the most important legal regulations in this field.
The starting point for the development of whistleblower protection in the USA is the False Claims Act, adopted by Congress on March 2, 1863. It is also known as the Lincoln Law. It is a federal law that encourages disclosure of irregularities.51 This regulation is considered to have had recently the greatest impact on the protection of whistleblowers in the USA.52 Originally, the law was a response to speculations of military contractors during the Civil War who tried to deceive the government, for example by sending ←21 | 22→boxes of sawdust instead of weapons or repeatedly selling the same horse to the cavalry of the armed forces.53 The Act authorized the citizens aware of such practices to take measures against such deceivers. The provisions of the Act underwent several modifications since 1863. Significant changes appeared in 1986 under the False Claims Reform Act of 1986.54 Among others, the provisions aimed at facilitating cash recovery procedures for whistleblowers and, thus, encouraging more frequent reporting of fraudulent irregularities committed by government contractors.55 It is worth noting that once the government recognized the success of the federal law, many states enacted similar regulations to combat local government fraud and reward whistleblowers.
The False Claims Act allows anyone aware of fraud against the government to file a lawsuit on their behalf. A claim brought under this Act by an individual whistleblower – also referred to as a relator56 – is known as a qui tam claim. The concept of the qui tam dates back to the Middle Ages and comes from the Latin phrase “Qui tam pro domino rege quam pro seipse,” which means “the one who sues in this case for both the king and himself.”57 Under this concept, government supports and protects citizens to ←22 | 23→help enforce the law the behalf of the state.58 Consequently, the private individual is the one who initiates the proceedings. The government is legally obliged to examine the allegations made by the individual.59 After considering all the circumstances, the Department of Justice decides whether to join the proceedings.60 According to 31 U.S.C. § 3730 (c)(3), if the government decides not to proceed with the action, the initiator has the right to conduct it. However, if the Government decides to join the proceedings, it bears the main responsibility for prosecution and is not bound by the act of the person bringing the action.61 Still, a private individual has the right to continue the proceedings as a party.62 Before the expiration of the sixty-day period or any extension under the Act, the government should proceed with the action – in such case the action is taken by the government – or notify the court that it refuses to take over the action, in which case the person bringing the action has the right to take over the action.63 The whistleblower acts anonymously for at least sixty days. This period may be extended by the court.64 It follows from the above that the identity of the whistleblower is initially protected, yet it is disclosed at a later stage in the proceedings.
In § 3729(a), the False Claims Act indicates the liability for certain acts.65 For instance, § 3729(a)(1)(A) & (B) makes liable anyone who knowingly made a false claim, or caused someone else to make a false claim, or knowingly made a false record or statement, in order to induce the government to pay a false claim. On the other hand, § 3729(a)(1)(G) is known as a section of reverse false claim.66 In this case, liability arises when action is taken to avoid the obligation to pay money to the government.67 Moreover, ←23 | 24→according to § 3729(a)(1)(C), liability arises also in the case of conspirators plotting the infringement of provisions. Fraud against the government can take many forms. For example, it could be overcharging, a failure to provide a service, a supply of a smaller quantity, or a poorer quality of products or services.68 A request for payment from the government in the cases above makes the request false or fraudulent, hence the name of the False Claims Act.
In 1986, the Congress increased the penalties for fraud against the government. Currently, if the defendant is found liable for fraud, the courts can order him to pay three times the damage suffered by the government, plus civil penalties between $5,000 and $10,000 for each false claim.69
The Act defines the terms “knowing” and “knowingly.” According to § 3729(b)(1)(A) these words mean that a person, with respect to information:
(1) has actual knowledge of the information;
(2) acts in deliberate ignorance of the truth or falsity of the information; or
(3) acts in reckless disregard of the truth or falsity of the information.70
However, according to § 3729(b)(1)(B), these terms require no proof of specific intent to defraud.
The False Claims Act provides for financial incentives for whistleblowers to encourage disclosure. Namely, they may receive between 15 % and 30 % of the total capital recovered.71 The financial award depends on whether or not the government joins the action and on the contribution made by the whistleblower to the prosecution of the act.72 If the government joins the action, the person reporting the fraud may receive at least 15 %, but no more than 25 % of the amount awarded by the defendant or the settlement ←24 | 25→amount.73 If the government does not intervene, then the whistleblower acting as a party in the proceedings may receive no less than 25 % and no more than 30 % of the recovered amount.74 According to the provisions of the False Claims Act, each whistleblower shall also receive an amount for reasonable expenses, which the court deems necessary to incur, plus reasonable professional fees and legal fees.75 All such expenses, fees, and costs shall be awarded against the defendant.76 We should indicate that in order to receive the award, it is not sufficient to simply inform the government of irregularities. It is necessary to file a quid tam claim and win the court proceedings in the form of a ruling that awards a certain amount of money or concludes a settlement with the defendant. The literature indicates that the possibility of a whistleblower receiving a high reward, which depends on the amount received from the defendant, may be the greatest protection for the whistleblower, because it enables them to cope with the loss of job or the impediment to professional career.77
Noteworthy, the defendant also benefits from certain protection in the event of actions against him by a whistleblower when the actions are contrary to the provisions of the Act. Namely, if the government does not join the proceeding and the whistleblower brings an action, the court may award reasonable lawyer fees and costs to the defendant, if the defendant wins the case and the court finds that the claim of the plaintiff was clearly frivolous, clearly vexatious, or was brought primarily for the purpose of harassment.78
Employees who filed a lawsuit against the government due to apparent irregularities benefit from employment protection. Under § 3730(h), any employee who has been dismissed, demoted, harassed or otherwise discriminated because of their lawful conduct is entitled by law to reinstate them, receive double back pay, compensation for other damages, including litigation costs, and reasonable attorney fees. As it follows from the above, ←25 | 26→the provisions of the Act prohibit employers from taking any discriminatory action. An employee who experiences such proceedings may bring a lawsuit before a court. A whistleblower seeking to sue his employer for retaliatory action against him must prove that he was engaged in activities protected by the False Claims Act and that the employer took retaliatory action due to knowledge of the qui tam action.79 The identity of the whistleblower is disclosed by the court when the proceedings go beyond the investigation stage. However, we should remember that an employer may deduce the identity of a person disclosing information earlier, on the basis of its content.80
The civil action referred to the above may not be brought before court more than three years after the date of the retaliation’s occurrence.81 However, under § 3731(b), a whistleblower may not bring a fraud suit against the government after six years from the date of the violation or after three years from the date when the facts relevant to the right of action are known or should have been known to a US official entrusted with responsibility for action.82 Under no circumstances may a claim be brought more than ten years after the date of infringement.83
1.2.1.2 The Whistleblower Protection Act
The US government passed the Whistleblower Protection Act in 1989.84 This Act protects federal employees in the United States from retaliation resulting from disclosing information about fraudulent or illegal activities taking place within the federal administration. This Act, like the False Claims Act, is one of the most important US regulations for the protection of whistleblowers.
The law provides statutory protection for individuals who engage in whistleblowing, which means the disclosure of evidence of illegal or improper ←26 | 27→government action.85 Protection is extended to most current and former employees of the federal administration and listed state-owned enterprises, as well as to those, who apply for certain positions.86 However, certain persons are excluded from the protection of this Act. These include, but are not limited to, employees of the Central Intelligence Agency (CIA), the National Security Agency (NSA), or individuals in positions legally excluded from the competitive federal service, because of their “confidential, policy-making, policy-shaping, or policy-supporting character.”87
The Act provides protection from personnel action against certain persons or the lack of such action for the purpose of making a protected disclosure of information, i.e. informing about irregularities.88 This includes a wide range of activities that have a negative impact on the employee. In accordance with U.S.C. 5. § 2302(a)(2)(A), prohibited human resources activities may include, but are not limited to promotion, transfer, reassignment, and any disciplinary action or decisions regarding compensation. People are protected from negative personnel actions, if they legally disclose information, about which they have a reasonable belief that they have evidence for:
– violation of any provision of law, rule, or regulation;
– gross mismanagement;89
– gross waste of funds;90
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– an abuse of authority;91 or
– a serious and particular threat to public health or safety.92
However, the disclosure of information may not be explicitly prohibited by law93 and may not be covered by secrecy for reasons of national defense or foreign affairs.94 As indicated above, a person who discloses certain information must have a reasonable belief that the information is true. Whether or not the information ultimately proves to be true is irrelevant to the possibility of receiving protection, if the actions are taken in accordance with the provisions of the Act. The employee must only prove that the person in their place can reasonably believe – given the information available to them – that the information disclosed is indicative of one of the statutory types of misconduct.95 If this condition is met, the burden of proof is shifted to the employer, who must prove with clear and convincing evidence that he would have taken the same action against the employee, even if the latter had not disclosed the information.96 The Act also applies to the disclosure of irregularities to the Special Counsel,97 the General Inspector of the agency or any other employee designated by the head of the agency to handle such disclosures.98
The whistleblower may seek legal protection under one of the following procedures: complaint due to an agency’s negative action against ←28 | 29→an employee to the Merit Systems Protection Board; action brought by the Office of Special Counsel; individually maintained right to lodge a complaint to the Merit Systems Protection Board; and, complaint brought by an employee under negotiated grievance procedures.99
Moreover, we should mention that in November 2012 Congress amended the Whistleblower Protection Act by adopting the Whistleblower Protection Enhancement Act.100 The new version strengthened the protection of federal workers who disclose evidence of waste, fraud, or abuse.101 The aim of WEPA was to close the gaps in the WPA that were exploited by managers and supervisors.102 Among others, literature mentions the abolition of the Federal Circuit Court monopoly on appeals,103 the extension of protection to Transportation Safety Administration staff and the obligation for the Inspectors General Offices to appoint an Ombudsman for the protection of whistleblowers in order to educate staff in the field of whistleblower protection.104 The role of the Whistleblower Ombudsman is to educate agency staff about prohibited retaliation for disclosures, and about their rights and remedies in the event of retaliation for reporting irregularities.105 Moreover, the Office of Special Counsel has been granted the right to act as a “friend of the court” amicus curiae at the appeal stage, if the whistleblower lost the administrative hearing stage.106
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1.2.1.3 The Sarbanes-Oxley Act
The United States has a number of laws that regulate the protection of whistleblowers in the private sector.107 The most important is the Public Company Accounting Reform and the Investor Protection Act from 2002,108 also known as the Sarbanes-Oxley (Sarbox or SOX) Act.109 On July 30, 2002, President George Bush Jr., when signing the bill, described it as “the most far-reaching reform of American business practices since the time of Franklin Delano Roosevelt.”110 This revolutionary act on the American market became a response to the stock market collapse at the beginning of the twenty-first century and to the decline in investors’ trust in enterprises.111 It has been recognized as one of the greatest reforms of US securities law and a breakthrough in the protection of the rights of whistleblowers.112 Legislation strengthening corporate governance also includes provisions on the protection of whistleblowers that aim to help breaking the code of corporate silence and encouraging more people to report corporate malpractice.113 These rules treat whistleblowers’ disclosure as a tool to control companies’ activity.114 The financial scandals that happened in the USA during this period clearly revealed that employees can play a key role in detecting fraud in companies.115 It was the whistleblowers ←30 | 31→who raised public awareness about the abuses committed in entities such as Enron or WorldCom.
The provisions of the Act oblige issuers, i.e. persons or firms who issue securities, to ensure the protection of whistleblowers and, pursuant to section 10A, extend such protection to auditors.116 This is reflected, among other things, in the obligation to establish a code of ethics and develop procedures that enable internal and anonymous reporting of detected irregularities.117 Under section 301 SOX, audit committees of listed companies must establish internal procedures that regulate issues such as:
a) receiving, retaining, and handling complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters; and
b) the confidential, anonymous submission of concerns regarding questionable accounting or auditing matters by employees of the issuer.
In this way, a company creates an opportunity for its employees to react to detected irregularities on an internal forum.118 This solution encourages whistleblowers to provide information about the problems noticed in the workplace. It should be noted that SOX does not specify any particular method for submitting complaints.119 As a result, employers may establish different procedures in this area, e.g. by telephone, post, fax or e-mail. The condition is to guarantee at least one confidential, anonymous method of submitting complaints.
The provisions of the Act protect employees of companies listed on public stock exchanges or companies required to report to the Securities ←31 | 32→and Exchange Commission (SEC).120 Pursuant to section 806 of the SOX, the protection applies to employees who have a reasonable suspicion that they report activities that violate:
– any federal criminal law provisions prohibiting postal fraud, bank transfer or bank fraud;
– any rules or regulations of the Securities and Exchange Commission (SEC); or
– any federal laws related to shareholder fraud.121
A whistleblower must be guided in their actions by a reasonable belief that their employer has committed fraud. In order to satisfy the requirement to act with a reasonable belief, a whistleblower must genuinely believe that the conduct he has noticed constitutes an infringement, and that a reasonable person in their position and with the same education would consider that the conduct in question constitutes an infringement. The case law has pointed out in this context that, “[a]; belief that an activity was illegal may be reasonable even when subsequent investigation proves a complainant was entirely wrong. The accuracy or falsity of the allegations is immaterial; the plain language of the regulations only requires an objectively reasonable belief that shareholders were being defrauded to trigger the Act’s protections.”122 However, whistleblower’s mere raising of general doubts as to the regularity of a particular transaction without indicating any specific reasons for concern is insufficient.123 This implies a requirement that the information disclosed must meet a certain minimum degree of concreteness.
For instance, a whistleblower may provide evidence of fraud to a supervisor, another employee, “who has the authority to investigate, discover, or terminate misconduct,” federal regulatory or law enforcement authority, ←32 | 33→a member of Congress, or any congressional committee.124 As can be seen from the above, the Act gives whistleblowers a relatively large amount of freedom to choose the addressee of the disclosure.
SOX prohibits any retaliation against whistleblowers resulting from their disclosure activities and it grants them special protection.125 Anyone who knowingly takes any action harmful to a whistleblower with intent to retaliate risks increased civil and criminal liability.126 The Act broadly covers retaliatory measures, which include127 dismissal, demotion, suspension, threatening, harassment, or any other form of discrimination against an employee connected with employment conditions due to the reporting of misconduct under the Act. The case law indicates that one of the actions not prohibited by the Act is the negative periodic assessment of an employee, if it does not contribute to the deterioration of the employee’s employment conditions.128 The provisions of the Act that prohibit retaliation against whistleblowers cover both legal persons and natural persons associated with the employer.129 The prohibition applies to companies, but also to their officers, other employees, contractors, subcontractors, and agents of such companies.130
The Act provides that a whistleblower who suffered negative consequences for their actions may file a written complaint to the Secretary of Labor not later than ninety days later. Under the terms of the Dodd-Frank Act from 2010, this period was extended to 180 days. The period commences on the date on which retaliation happens or on the date on which the employee becomes aware of the retaliation.131 If the Secretary of Labor did not make a final decision within 180 days of the date of the complaint and “there ←33 | 34→is no showing that such delay is due to the bad faith of the claimant,” the employee may file a lawsuit with the appropriate federal court.132 The court shall then deal with the case irrespective of the value of the matter at issue.133 The literature stresses that making it possible for whistleblowers to exercise their rights in this way was an innovative solution.134
If the Secretary makes a decision in favor of an employee, the latter shall be entitled to all necessary remedies to protect them.135 The remedies include:
a) reinstatement to work with the same length of service as the employee would have had he not been retaliated against;
b) payment of outstanding remuneration with interest; and
c) compensation for any damage suffered as a result of discrimination, including legal costs, fees of experts, and lawyer fees.136
However, practice shows that proceedings rarely end at this point, as parties to a dispute have a wide range of appeal possibilities against a decision of the Secretary.137
1.2.1.4 The Dodd-Frank Wall Street Reform and Consumer Protection Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act138 signed by President Barack Obama on July 21, 2010, was a response to the 2008 financial crisis.139 It aimed to transform the US regulatory system in a number of areas, including, but not limited to, consumer protection, trade restrictions, credit ratings, financial product regulation, corporate ←34 | 35→governance, disclosure, and transparency.140 The adoption of the law was also a further significant step towards enhancing the protection of whistleblowers in the United States. Although the Act primarily regulated functioning of financial markets and protection of consumer interests, it also contained protection measures and a number of incentives for whistleblowers.141 Pursuant to section 922, a new section 21F was added to the Securities Trading Act of 1934. The Act gave whistleblowers increased protection against employer retaliation, guaranteed confidentiality, and provided the opportunity to receive a financial award.142
Section 15 U.S.C. § 78u-6(a)(6) of the Dodd-Frank Act defines the term “whistleblower” as one or more individuals acting jointly, who provide information about a violation of securities laws to the Commission [SEC]143 in a way determined by rule or regulation of the Commission.144 Furthermore, according to the regulations issued by the SEC after the adoption of this law, a whistleblower must have a “reasonable belief” that the aforementioned regulations have been infringed.145 Only natural persons may report infringements.
The Dodd-Frank Act prohibits retaliatory measures against whistleblowers, who disclose information of violations in accordance with procedures. Whistleblowers who experience such retaliation have the right to be reinstated with the length of service they would have enjoyed had they not disclosed the information, double the amount of outstanding wages with interest, along with compensation for legal fees, litigation costs, ←35 | 36→and court fees.146 The protection against retaliation covers whistleblowers regardless of whether they have reported violations internally within the company or directly to the SEC.147
A particularly effective way of encouraging whistleblowers to act was to create the possibility of receiving financial incentive for the actions.148 Providing important and previously unknown information to SEC by an authorized whistleblower – which leads to the imposition of sanctions on the entity infringing the law in a specified manner – entitles the person who reports the irregularities to receive a reward of 10–30 % of the funds, which the entity will be forced to pay for its infringements.149 Whistleblowers may receive a financial award if their information leads to effective securities law enforcement actions.150 The Act authorized the Commission to grant financial awards to eligible individuals if the sanctions imposed exceed one million dollars.151 A high level of potential reward that a whistleblower may receive is intended to secure the existence of such a person in the event of loss of job, breakdown of professional career or even the need to change the place of residence.152 SEC may exercise its freedom in determining the appropriate percentage of the award and take into account a number of factors in relation to the specific facts and circumstances of each reported case. Factors that may increase the amount of the prize include:
– the importance of provided information;
– the assistance given by the whistleblower;
– the interest of law enforcement authorities; and
– the participation in internal compliance systems.153
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On the other hand, factors that may reduce the amount of a whistleblower’s award are:
– their guilt;
– unjustified delay in reporting a violation;
– violation of internal compliance and reporting systems by the whistleblower.154
The order of the above criteria does not determine their validity. It should be noted that some whistleblowers are excluded from the possibility to receive an award.155 Among others, these are:156
– certain US law enforcement officers;
– employees of foreign governments;
– people convicted in criminal actions related to the information provided to the SEC; and
– certain auditors, including those who would violate Sections 10A of the Exchange Act by reporting information to the commission in order to obtain a whistleblower reward.
Moreover, the Dodd-Frank Act provides a possibility of anonymous transmission of information to the SEC by a counsel.157 However, prior to payment of the award, the whistleblower discloses their identity and other information that SEC may request, either directly or by their counsel.158
It should be noted that the Dodd-Frank Act has strengthened and extended the regulation of whistleblowers’ activities under the Sarbanes-Oxley Act. This includes, for example, the protection of employees of a subsidiary under the SOX rules if its finances are included in the financial statements of the parent company. Moreover, a whistleblower who accuses a company of retaliatory action resulting from a SOX-protected report receives the opportunity to sue directly in a federal court without exhausting ←37 | 38→administrative resources.159 Another change is the extension of the period from ninety to 180 days after the detection of an infringement during which whistleblowers have the right to lodge a claim.
Moreover, the Dodd-Frank Act strengthened the provisions of the False Claims Act, among other things, by amending section 3730(h) by ensuring the protection of whistleblower’s colleagues.160
The protection of people who disclose perceived wrongdoings in the United Kingdom is universally considered to be one of the most developed in Europe.161 The regulations in this respect were included above all in three legal acts:162 the Public Interest Disclosure Act of 1998,163 the Employment Rights Act of 1996,164 and the Enterprise and Regulatory Reform Act of 2013.165 The United Kingdom was the first European state which introduced a regulation strictly related to the protection of whistleblowers,166 that is ←38 | 39→the Public Interest Disclosure Act (PIDA).167 Its objective was to protect public interest by quickly discovering and stopping wrongdoings in private enterprises or public institutions; similarly to American regulations.168 The PIDA fits into the British legislation on employment. Pursuant to its provisions, the Employment Rights Act of 1996 was amended.169 Moreover, it was significantly amended on June 25, 2013, as the result of the Enterprise and Regulatory Reform Act. Among the most important introduced changes at that time was the introduction of “a public interest test,” that is the obligation of an employee to demonstrate their belief that they disclose information in public interest, and the abolition of the criterion of good faith that was previously in force, whose application was limited by the above amendment only to the purposes of determining the amount of compensation for whistleblowers.170
The definition of an employee who is protected under the Public Interest Disclosures Act is broader than the definition in the Act of 1996 and covers people employed in all sectors, except for self-employed, volunteers, and employees of armed forces and intelligence service.171 Below, within the scope of the term “an employee” or “a whistleblower,” this text always includes all protected groups, regardless of the legal basis of their employment.
In the discussed Act, there are terms of protected disclosure and qualifying disclosure. Protected disclosure means a qualifying disclosure (in accordance with the definition included in Article 43B) made by an employee in accordance with the requirements specified in Articles 43C–43H of the Act. These requirements concern the making of disclosure to particular entities ←39 | 40→and the fulfilment of certain conditions. The provisions of the Act provide a number of people to whom wrongdoings may be disclosed, depending on the circumstances.
In accordance with Article 43B of the Act of 1996, “qualifying disclosure” means the disclosure of information which – following the reasonable belief of an employee who makes the disclosure in public interest – will prove one or several of the following circumstances:
1. an offence was committed, is committed, or presumably will be committed;
2. a person failed, fails, or presumably will fail to comply with any legal obligation that he is subject to;
3. there occurred, occurs, or may occur a miscarriage of justice;
4. the health or security of any person was, is, or may be at risk;
5. the environment was, is, or may be damaged; or
6. information that any issue which falls within the scope of any of the above points was, is, or may be deliberately concealed.
In accordance with the above, the disclosed information may turn out to not be true. In order to grant protection to whistleblowers, only a reasonable belief of the wrongdoing occurrence is required. Moreover, we should emphasize that an offence may take place outside of the United Kingdom. It does not matter if other than British law is applied in a case of a wrongdoing.172
The protection will not apply if, while disclosing, a whistleblower commits an offence in the form of breaking the Official Secrets Act of 1989173 or the regulations in force in the public office.174
Moreover, the disclosure of information, in which the claim for keeping the legal professional privilege may be sustained in legal proceedings, does not constitute qualifying disclosure, if it is made by a person who disclosed such information as a result of receiving legal advice.175 Whistleblower will ←40 | 41→not be protected, if they are convicted of committing such an offence or if – on the basis of presented evidence – a court is convinced that the whistleblower committed such an offence.
We should also indicate that the PIDA recognizes as qualifying disclosure only confidential disclosure that is not anonymous, which requires greater trust towards addressees.176 It seems that this measure is aimed at discouraging the anonymous disclosure of wrongdoings, because it may make it impossible to determine significant issues in the scope of the disclosed wrongdoings. Moreover, the confidentiality of the disclosure does not have an absolute character, which enables holding those people liable who disclose information, should their actions turn out to be e.g. malicious.
The PIDA offers the following modes of disclosing information with increasing thresholds of protection:177
1) internal disclosure of information to employers;
2) disclosure of information to an appointed external body (of regulatory character) or a member of Parliament; and
3) a broader disclosure of information e.g. to the police, the media, or a non-governmental organization.178
Whistleblowers are encouraged to first undertake internal actions by means of certain restrictions for disclosing wrongdoings outside of workplace.179 Internal disclosure consists of a whistleblower passing information about perceived wrongdoings on the forum of the organization.180 Such a disclosure will be protected, should the whistleblower truly believe it will prove that a malpractice occurred, occurs, or presumably will occur. Pursuant to Article 43C Paragraph 1a of the Act of 1996, qualifying disclosure occurs, should an employee disclose information to his employer. However, if the employee has justified reasons to think that the wrongdoings concern solely or above all actions of a different person than his employer, or matters ←41 | 42→that a different person than his employer is legally responsible for, then he discloses information to the relevant person.181 On the other hand, Article 43C Paragraph 2 constitutes that the employee who – on the basis of a procedure authorized by the employer – makes qualifying disclosure to other person than the employer, must be treated like a person who makes qualifying disclosure to the employer. The above provisions establish that – as a result of informing the management of the employer about the perceived wrongdoings – the management will take steps to clarify the presented information and eliminate potential threats. The objective is to discourage actions undertaken to harm the institution and enable their early detection.182
The implementation of special internal procedures of disclosure examination by employers should be recognized as a good practice. Even though the PIDA does not impose an obligation to establish such procedures, encouraging employees to report wrongdoings within the organization is in the interest of the employers. A lack of such a procedure may make whistleblowers disclose the issue outside of their workplace.183
Moreover, employees of state bodies will have protection, should they directly inform about their concerns a superior ministry and not their employer. It seems that the objective of the implementation of such regulations is to increase the certainty in the examination of the issue and the elimination of potential wrongdoings. If a whistleblower encounters negative consequences in result of disclosing information in such a way, their claim may be directed against the employer, not against the minister to whom he disclosed information.184
On the other hand, Article 43D of the Act of 1996 constitutes that qualifying disclosure also occurs if it is made during the reception of legal advice. The regulations enable employees to receive legal advice on wrongdoings perceived by them and to receive legal protection from potential negative consequences. When an employee authorizes their lawyer to further ←42 | 43→disclosure of information, e.g. to the media or the employer himself, the actions of the lawyer are considered as undertaken on behalf and for the benefit of the employee.185
The provisions impose more rigorous conditions on employees who disclose information outside of the organization.186 In such a case, the protection is granted to a whistleblower, if they disclose to a prescribed person, indicated in a special register,187 and truly believe that a relevant offence falls within the scope of matters to which such a person was appointed, and that the disclosed information and all included allegations are substantially true. What follows from the above is that whistleblowers may turn to a prescribed person with an issue within the scope of its competences. In this regard, certain institutions should be indicated, such as those that act in areas of finances, health services, environmental protection, insurance, or consumer rights, including local government.188 To obtain legal protection, whistleblowers must have reasonable belief that information and all included allegations are substantially true and relevant for the regulatory body.189 Let us indicate that contacting bodies not in the register is qualified as disclosure to the wide audience, which results in a necessity to fulfil more rigorous conditions.190
However, in a case of disclosure to the wide audience, whistleblowers omit not only their employer but also proper supervisory bodies, and they present observed wrongdoings to e.g. the police or the media in order to popularize the issue and gain special attention.191 The whistleblower when deciding on this path of disclosure – in order to receive protection – must demonstrate the important reasons that prevented him from informing in ←43 | 44→the first place his employer or the supervisory body.192 In such a case, the protection is granted to whistleblowers, if:
1) they have reasonable belief that the disclosed information and all included allegations are substantially true;
2) the disclosure is not for personal gain; and
3) all circumstances suggest that it is reasonable to disclose information, and one of the following conditions is met:
(a) at the moment of disclosure, the employee has reasonable grounds to think that they will suffer harm from the employer if the information is disclosed to this employer or a prescribed person;
(b) should nobody be provided for the objective of Article 43F – disclosure to a prescribed person – concerning a given offence, the employee has justified reasons to think that proofs connected to the given offence will presumably be concealed or destroyed if disclosed to the employer; or
(c) the employee previously disclosed the same information to the employer or to the prescribed person.
When determining whether – in all circumstances of the issue – it was reasonable to disclose information, courts consider, among other things, the identity of the person to whom the information was disclosed, the significance of the offence, and whether it still occurs or presumably will occur in the future.193 Noteworthy, the required degree of the offence’s significance will be lower when the disclosure is made to the police than if the same information is disclosed to the media.194
The provisions of the Act of 1996 also guarantee protection in the case of disclosing information that does not meet the above conditions, if it concerns exceptionally serious offenses. In accordance with Article 43H of the Act, the qualifying disclosure will take place if the employee:
– has justified reasons to think that disclosed information and all included allegations are substantially true;
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– does not disclose information for personal gain;
– discloses an offence of exceptionally serious character and it is reasonable to disclose information in all circumstances of the issue.
On the other hand, Paragraph 2 of the Article constitutes that – during the examination whether the disclosure of information in all circumstances of the issue is reasonable –the identity of the person to whom the information is disclosed is specifically considered; e.g. the police or the press. The provisions do not contain any particular guidelines on the basis of which a given offence may be recognized as “particularly serious.” This issue is decided individually for every case.195
In accordance with the British legislation, a dismissal of a person disclosing cases of violations will be recognized as unfair if its only or main reason is the fact that a whistleblower made a protected disclosure. Moreover, employees are also protected from suffering any other detriment related to the whistleblowing activity, e.g. making threats or limiting promotion opportunities. People who make protected disclosures in accordance with the provisions of the PIDA and were dismissed or suffered other detriment due to their whistleblowing activity may file a complaint to employment tribunals, which deal with the issues of whistleblowers in the United Kingdom. In their jurisprudence, employment tribunals are limited to deciding on the occurrence of the detriment of whistleblowers and on the amount of due compensation; i.e. they do not decide on the wrongdoings identified by employees.196
In accordance with Article 47B introduced by the PIDA to the Act of 1996, an employee has the right for his situation not to deteriorate due to any action or any deliberate negligence on the part of the employer, ←45 | 46→undertaken on the basis of the protected disclosure made by the employee. Noteworthy, the employer will be also held responsible in a case when the employee, after informing about wrongdoings, is exposed to detriment colleagues, e.g. intimidation or harassment. Such an activity is treated as also made by the employer.197 It does not matter if it happened with the knowledge or permission of the employer.198 The employer may defend himself by indicating that he undertook all reasonable steps to avoid detriment due to the abovementioned actions.199
If the employment tribunal recognizes the complaint of an employee as valid, it may grant him compensation from the employer.200 Its amount is established based on what is just and right in all circumstances of the issue, taking into consideration the violation that is the subject of the complaint and also every detriment suffered by the whistleblower due to the deterioration of his situation.201 Compensation should cover in particular reasonable costs bore by the whistleblower or lost profits – e.g. the remuneration for the unemployment period – which he could expect if he did not lose the job or did not experience other victimized actions of the employer.202 Noteworthy, recognized compensation is not subject to the statutory limit that is applied in standard claims of unjustified dismissal.203 However, we should remember that the employment tribunal has the right to reduce all compensations even by 25 %, if it deems that the protected disclosure of information was not made in good faith.204 In the case of litigation, the employer must provide proof. He must explain in front of the tribunal the reasons for which he undertook negative activities towards the whistleblower and prove that they were not the consequence of the disclosure of information.205
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Another European country that has regulations on whistleblower protection is Romania. The relevant act is the Law No. 571/2004 regarding the protection of the staff of the public authorities, public institutions, and other units that notifies breaches of the law.206 This regulation is the result of actions undertaken to fight corruption in public administration. The provisions of the Law No. 571/2004 enable one the disclosure of a broad scope of wrongdoings and provide protection from retaliation. However, this protection is limited to individuals of the public sector.207 Although, private entities have the possibility of implementing solutions from the public sector in their internal regulations.208
Article 3 of the Law No. 571/2004 includes a definition of disclosure in public interest, which should be recognized as disclosing in good faith the case of unlawful activity, violation of ethical professional standards or the principles of good administration, productivity, effectivity, economy, and transparency. Not all disclosed information may be protected.209 Pursuant to Article 5 of the Law No. 571/2004, the disclosed wrongdoings may concern:
a) actions of corruptive character or actions connected to such or to ones directly related to them, frauds, breaches of responsibilities, or professional responsibilities related to the breach;
b) unlawful actions against the financial interest of the European Community;
c) practices or treatment which privileges or discriminates individuals listed in Article 2 of the Law;
d) breaking of provisions concerning incompatibilitas and the conflict of interest;
e) the abuse of material and human resources;
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f) biased political activity by means of occupied office, except for people elected or appointed on political rules;
g) breaking of the law on access to information and transparency of decisions;
h) breaking of provisions concerning the public procurement and nonrefundable financing;
i) incompetence and negligence of responsibilities;
j) subjective evaluation of the personnel during the process of recruitment, selection, promotion, degradation, and dismissal;
k) breaking of administrative procedures or establishing internal procedures that are against the law;
l) issuing administrative acts or other acts in the interest of a particular group or a clientele;
m) flawed or fraudulent management of property of public authorities, public institutions, or other establishments provided in Article 2 of the Law;
n) breaking of other provisions issued in order to achieve the principle of good administration or to protect the public interest.
The provisions of the Act enable whistleblowers to choose the path of disclosing wrongdoings. It is possible to use any channel in all circumstances.210 Their register was included in Article 6 of the Law No. 571/2004. Namely, it is possible to disclose information:
– directly to the supervisor of a person who broke the law;
– to the head of a public authority, institution, or budget unit, in which the person who violated the law is employed or in which an illegal practice was disclosed, even if the author of the disclosure cannot be identified;
– to a disciplinary committee or another similar body within the public authority;
– to judicial bodies;
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– to bodies responsible for detecting and examining conflicts of interest and discrepancies;
– to a parliamentary committee;
– to the mass media;
– to professional bodies, trade unions, sector organizations; or
– non-governmental organizations.
However, the literature indicates that – despite the lack of indication of the order of using the abovementioned channels – the initial exhaustion of internal ways of disclosure seems to be an element that demonstrates the good faith of whistleblowers.211 On the other hand, disclosing information about wrongdoings directly to the media – instead of the bodies proper for their resolution – may indicate the lack of whistleblowers’ good faith.212 The Law No. 571/2004 lists a number of principles of whistleblower protection in public interest. Among other things, the list includes the principle of liability, according to which the violation of law disclosed by whistleblowers must be supported by information or proofs concerning the committed act. On the other hand, the principle prohibiting the abuse of sanctions towards the person disclosing the violation of law constitutes that such a person cannot be submitted to unfair sanctions or be more severely penalized for other disciplinary misconducts. Whereas, the principle of good leadership constitutes that employees are encouraged to disclose in public interest in order to improve the administration potential and to increase the prestige of the public authorities, public institutions, and other entities specified in the Law No. 571/2004. The principle of good faith is also rather significant for whistleblowers, in accordance with which a person, who is an employee of public authorities, institutions, or another entity specified in the Law, and who discloses an action which constitutes a violation of rights, is guaranteed protection if they believe that such an action indeed occurred and that it was unlawful. The disclosure made in public interests uses the presumption of good faith unless it is disproved. Moreover, upon the request of the whistleblower, against whom began disciplinary proceedings as a result of the disclosure of information, the disciplinary committee or any similar ←49 | 50→body within the organizational structure of the public authorities has the obligation to invite the press and a representative of a trade union or professional body. The disciplinary committee has the obligation to provide the whistleblower with protection by means of concealing their identity if any indicated person is their supervisor or has the power of control over the whistleblower. Moreover, if the whistleblower acted in good faith, the court may decide on the invalidity of the disciplinary or administrative sanctions applied towards them in the scope of retaliation actions undertaken due to his activity.
Slovenia has no act devoted exclusively to the protection of whistleblowers. Moreover, the provisions of the Slovenian labor law do not provide specific protection for people who disclose the perceived wrongdoings.213 However, the protection of whistleblowers is inscribed in the anti-corruption activities of the state. The main act concerning the discussed issue is the Integrity and Prevention of Corruption Act of 2010.214 This Act covers a broad scope of good manners recognized in the international arena in the field of whistleblower protection. Its provisions regulate such issues as the disclosure of wrongdoings, the guarantee of identity protection for whistleblowers, definitions of illegal and unethical actions or sanctions in a case of the violation of the whistleblower protection. This regulation does not provide the obligation to make disclosures of perceived wrongdoings nor the financial rewards for such actions.215
Article 1 of the Integrity and Prevention of Corruption Act establishes the means and methods for the purposes of strengthening integrity and ←50 | 51→transparency in order to prevent corruption and avoid and eliminate conflicts of interest. On the other hand, in accordance with Article 4 of the Act, “corruption” means any violation of the proper conduct of responsible officials in public or private sector – which also means the conduct of people who initiate such violations – or of people benefiting from the violation in order to gain undue, promised, offered, or transferred directly or indirectly benefits, or in order to gain undue, demanded, accepted, or expected benefits for own gain or for the gain of any other person.
Chapter III of the Act consists of regulations concerning the protection of people working in public and private sectors, who in good faith and in a reasonable way disclose their suspicions about illegal or unethical conducts, is crucial for the subject matter of the present study.216 This chapter is composed of three articles, which concern the disclosure of corruption and the protection of disclosing people (Article 23), the disclosure of unethical and unlawful action (Article 24), or the means of protecting the disclosing person (Article 25).
