THERE WILL BE AN OBLIGATION TO OPERATE AN ABUSE REPORTING SYSTEM

Entities REQUIRED TO SET UP AN ABUSE REPORTING SYSTEM

Under the Complaints Act, both private and public sector employers are covered by the obligations to report abuse. The legislation requires private sector employers to set up an internal whistleblowing system, regardless of the industry in which they operate.

The interpretative provision of the Act defines an employer as anyone who employs a natural person under an employment relationship.

As a general rule, the requirement applies to employers with more than 50 employees, with the exception of the provisions of Act LIII of 2017 on the Prevention and Suppression of Money Laundering and Terrorist Financing. They are obliged to maintain an abuse reporting system from 24 July 2023, regardless of their number of employees.

Employers with 250 or more employees will also be required to maintain an abuse reporting system from 24 July 2023.

Employers with more than 50 but not more than 249 employees will be granted a moratorium on the introduction of the legislation. In their case, the deadline for compliance with the abuse reporting obligations is 17 December 2023. 

Rules on headcount

When determining the number of employees, each company is obliged to take into account only its own number of employees, the Complaints Act does not require the application of other legislation (e.g. the rule of aggregation of the number of employees under the Act on the Labour Market Act). For companies with less than 249 employees, the Act provides for an exemption, as they may jointly set up their abuse reporting system. This could be particularly beneficial for groups of companies where the companies would be obliged to set up a whistleblowing system on the basis of their own data.

THE SCOPE OF REPORTABLE ABUSES

The law is designed to prevent abuse, so unlawful acts or omissions or other information about abuse can be reported.

Who Are entitled to make a report

The law defines the persons and categories of persons who can make a notification in the internal notification system. A whistleblower is primarily a natural person who reports information about an infringement obtained in the context of their work-related activities. Compared to the Directive, the Complaints Act extends the scope of the regulation and, in this context, persons who may be economically vulnerable in the context of their activities in relation to the employer and thus may play an important role in the detection of infringements may also be able to report. These may include, for example, subcontractors or other contractual relationships with the company, such as suppliers.

Internal abuse Whistleblowing system

In the internal whistleblowing system, the organisations concerned should have the possibility to make a written or oral report. The legislation also requires the system operator to ensure that the whistleblower can make the report anonymously.

The internal whistleblowing system may be operated by a designated person or department within the employer who cannot be instructed to do so, but may also be operated by a whistleblower protection lawyer or other external organisation that can be trusted to operate the system.

In practice, for companies, this system could be an online platform or a telephone "hotline" where employees and partners can report abuses and irregularities they have experienced through a secure and protected system that ensures that the incident is investigated and that the whistleblower is not penalised for reporting.

When making an oral notification, the organisation must make a verbatim written record of the notification and have the notifier sign the notification. The appropriate information must also be provided to the notifier when making an oral notification. 

Investigation of reports

The organisation operating the system must send the whistleblower an acknowledgement of the report within seven days of receipt of the written report made in the internal whistleblowing system. This should inform the person concerned of their rights under the law, the procedure to be followed, the protection of their data and their rights in relation to it.

Employers must investigate the notification within 30 days, which may be extended to a maximum of three months in justified cases. If the notification justifies the initiation of criminal proceedings, arrangements must be made for a complaint to be lodged.

Internal regulations

Detailed internal rules should be developed, covering:

- the definition of the notifiers

- the channels for reporting (e-mail, in-person, telephone),

- confirmation of the notification,

- rules for contacting the whistleblower,

- independent investigation of the report, measures to remedy the breach,

- the rules on feedback to the whistleblower,

- the registration and documentation of notifications,

- data protection information, confidentiality rules, (development of a GDPR-compliant data management information and regulation)

- employee education, awareness and confidence building.

PROTECTION OF THE WHISTLEBLOWER

The law regulates the prohibition of retaliation as a protective measure. Accordingly, any measure adversely affecting the whistleblower (e.g. suspension, collective redundancies, dismissal, refusal to promote, reduction of pay, refusal to train, negative performance appraisal), which is taken because the whistleblowing is unlawful. 

Those required to implement an internal whistleblowing system should therefore ensure in particular that:

- establishing reporting channels;

- designate internal or external persons to handle reports;

- regulating the handling of whistleblowing, which needs to be aligned with other internal policies, in particular in the areas of data protection, labour law, IT security, employment and property protection;

- the development and internal publication of notifiable or reportable conduct depending on the risks involved.

Supervisory Authority

Compliance with the law is checked by the Employment Inspectorate.

We are happy to assist you in drafting the relevant rules and information and in developing the procedures.