Following the entry into force in 2019 of EU Directive 2019/1937 on the Protection of Whistleblowers, also known as the “Whistleblowing Directive”, companies are required to set up an internal whistleblower channel.
In this way, employees or any third party, whether or not related to the company, can make complaints anonymously.
Through such complaints, they will be able to report any presumably illegal or unethical behavior in the company.
The Council of Ministers recently approved the Preliminary Draft Bill in charge of regulating the protection of those people who report corruption, serving as a transposition of the aforementioned Directive.
¿What is a whistleblower channel?
An internal whistleblower channel is an alert procedure implemented in a company, with the aim of detecting the existence of possible malpractice in it, and reporting it to the responsible for regulatory compliance.
The whistleblowers, through this channel, will transmit the information in a secure manner, thus avoiding any risk of leakage that could damage the company’s reputation or harm the reporter.
The purpose of implementing the whistleblower channel in companies is none other than to protect whistleblowers.
In this way, whistleblowers will be able to make reports and may choose to do so anonymously, if they wish.
Advantages of implementing a whistleblower channel in the company
The implementation of a whistle-blowing channel in the company involves several advantages:
- Early detection of those criminal behaviors that, if they are not stopped, would eventually get worse and cause economic, organizational and reputational damage to the company.
- By offering the possibility of reporting anonymously, employees will be encouraged to participate in the reporting of criminal acts of which they are aware.
- The company’s internal investigation of these conflicts will make it possible to resolve them internally, without the need to go to court.
- The transparency of the company’s operations will be promoted, as well as its ethics.
What companies are required to implement a whistleblower channel?
They will have the duty to implement a whistleblower channel:
- Those private companies that have more than 50 workers on their staff
- Public companies that have less than 50 workers, as long as they do not belong to municipalities with less than 10,000 inhabitants.
- Those companies affected by the Money Laundering Prevention Law (regardless of their number of employees).
- Companies that dedicate their activity to financial products and markets.
- All companies dedicated to transport security.
- Companies affected by environmental protection laws.
- Those companies with a compliance program.
- Companies that have an Equality Plan, since they must implement a channel for reporting sexual or gender-based harassment.
- Those companies or entities in the sports, leisure or educational field if they have the presence of minors. In that way, they can report situations of harassment or violence.
Minimum requirements for the whistleblower Channel
Any whistleblowing channel must be secure and effective, and must ensure the transparency of the procedure at any time. In addition, it must comply with the following requirements:
- Ensure the confidentiality of the whistleblower.
- Allow anonymity if the whistleblower desires it.
- The whistleblower channel must be easily accessible not only for those who are part of the company, but also for third parties who may have witnessed an irregularity or illegal action.
- Obligation of the company to notify employees and the work council of the existence of the whistleblowing channel. They must be informed of the procedure to be followed, the purpose of its implementation and the format for presenting the report.
- Need to send an acknowledgement of receipt to the whistleblower within seven days of receipt of the report.
- Periodical review to ensure the correct functioning of the whistleblower channel in the company.
Responsible for processing reports
All companies must designate a person in charge of the Internal Information System, who will be responsible for receiving, organizing and receiving reports.
This responsible may be a single person or a collegial entity, and will be who decides if the reports should be processed and, therefore, an internal investigation process should be initiated.
Some of the reports will contain sensitive information, so the Responsible for the Internal Information System must treat them with the necessary diligence, and may be assisted by an external provider, that is, an external whistleblower channel agent.
How to implement a whistleblower channel in the company
The guidelines to consider when implementing a whistleblower channel in the company are the following:
- Establish the different communication channels that can be used to make and receive reports, and inform employees about them.
- Create a regulation for the whistleblower channel.
- A person in charge of the Internal Information System must be appointed.
- Create and establish an action protocol when processing and managing complaints.
- A book-record of the complaints, whether received or processed, as well as the resolution of the same, must be kept.
- Inform about the existence and regulations of the whistleblowing channel.
Functioning of the whistleblower channel
The functioning of the whistleblower channel must be simple, effective and accessible to all employees and third parties who maintain a relationship with the company or are aware of a practice against the legal system inside the company:
- First, the whistleblower will emit a report or communication through the reporting channel provided by the company.
- After this, the Responsible for the Information System will manage and study this communication, determining if it should be admitted for processing. They will study if there are indications that the reported irregularity is being committed or not.
- The organization will have a period of 7 days to communicate the reception of the report to the complainant.
- In case it is decided to process it, they will have a period of 3 months to investigate and instruct about the facts denounced.
- If the case is particularly difficult, this period may be extended for a period of 3 more months.
- All reports filed must be kept in a register-book, to which the judicial authority will have access in the case of a judicial proceeding.
- With respect to the period of retention of information, the maximum period of conservation of the register-book will be 10 years.
- All individuals or organizations affected by the processing of the report in question will be notified.
- Once the investigation is completed, the resolution of the case will take place. Three possible results:
- Archive of the complaint.
- Adoption of disciplinary measures.
- Communication to the corresponding authorities.
Sanctions for companies that do not have a whistleblower channel implemented
The need to establish a mandatory whistleblower channel for companies will be accompanied by sanctions imposed to all those companies that, having the duty to do so, do not implement them.
A minor infringement is, for example, not complying with the obligation to cooperate in the investigation of a report.
A serious infringement will be, among others, violating the duty of secrecy in those cases that cannot be qualified as a very serious infringement.
With regard to the very serious infringement, an example would be to take any reprisal against the whistleblower, resulting from its communication.
Despite there is no specific sanction for those companies that, having the duty to implement a whistleblower channel, do not do so, they will be sanctioned as well, for being considered non-compliant with the Law.
For any further information, Auratech Legal Solutions will be at your disposition.
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