Archive for November, 2018

Whistleblowing: The British Way

Friday, November 30th, 2018

What Happened?

In seeking to limit the abuse of whistleblower legislation, the United Kingdom enacted the Enterprise and Regulatory Reform Act of 2013, which amended the Public Interest Disclosure Act of 1998, and mandated that all disclosures of misconduct be made in the “public interest.”

The Background

In 1998, the United Kingdom became one of the first jurisdictions in the European Union to implement its own set of whistleblower protections with the Public Interest Disclosure Act (PIDA). Under the PIDA, a whistleblower had to make a qualified and protected disclosure in good faith to be considered a whistleblower and therefore receive protection under the Act. A disclosure is considered qualified when it concerns one of the following subject matters: a criminal offense, breach of legal obligation, miscarriage of justice, danger to any individual’s health or safety, damage to the environment, or a deliberate concealment of any of the aforementioned matters. A disclosure is considered protected when it is made to the appropriate party. However, as more disclosures were made, Parliament realized the PIDA contained a loophole that enabled individuals to bring claims of a private nature under the Act.

The Motivation of Parliament

Parliament discovered that individuals were raising concerns about their personal employment contracts under the PIDA. Individuals were able to satisfy the elements of a qualified disclosure by raising their concerns under the “breach of legal obligation” prong of the Act. Clearly, this was not Parliament’s intent when they enacted the PIDA and was a blatant misuse of whistleblower laws. To correct this misapplication of whistleblower protection, Parliament enacted the Enterprise and Regulatory Reform Act of 2013 (ERRA) that amended the PIDA so that a whistleblower will only be protected for disclosures deemed to be made in the “public interest.”

Who Can Be A Whistleblower Under the British Law?

In order to be considered a whistleblower and eligible for whistleblower protection, a whistleblower must make a qualified and protected disclosure in the “public interest.” As stated above, a disclosure is qualified and protected when it regards one of the six aforementioned subject matters and when it is made to the correct party. The ERRA does not define the term “public interest.” When a whistleblower reasonably believes the disclosure is being made in the “public interest” the whistleblower will be entitled to protection even if the disclosure is not found to be in the “public interest.”

What Protections Can A Whistleblower Receive?

In the United Kingdom, whistleblower protection extends to trainees, temporary employees, employees, consultants, and suppliers. However, a whistleblower who is not an employee is not afforded the same protection as a whistleblower who is an employee. A whistleblowing employee is protected from unfair dismissal and detrimental treatment, whereas a whistleblowing nonemployee is only protected from detrimental treatment.

A whistleblowing employee is presumed to be unfairly dismissed if their disclosure was the cause of their dismissal. When hearing a complaint of unfair dismissal, an employment tribunal can order reinstatement or compensation of the whistleblowing employee. In addition, an unfair dismissal claim for a whistleblowing employee is not subject to the statutory cap that normally applies to damages in a standard unfair dismissal claim. Further, an employment tribunal can also offer interim relief to a whistleblowing employee if the tribunal finds that the whistleblowing employee is likely to win the unfair dismissal case.

How Does One Blow The Whistle In The United Kingdom

A whistleblower must disclose misconduct in the correct manner and to the correct party in order to be considered a whistleblower and receive whistleblower protection. A whistleblower may disclose misconduct to their employer, in accordance with their employer’s whistleblowing procedures, or to a prescribed person. A prescribed person is an outside party, set by the Secretary of State, and named in the PIDA. In certain instances, the PIDA does permit a whistleblower to disclose misconduct to other parties such as the media. However, the disclosure will only be eligible for protection if an employment tribunal determines that the disclosure was reasonable at the time it was made.

The Take Away

When comparing American whistleblowing laws to those in the United Kingdom, the countries’ differentiating perceptions of whistleblowers are instantly discernable. The United States focuses on the protections and the rewards whistleblowers are entitled to receive for the risks they take when coming forward. The United Kingdom focuses on the elements whistleblowers must establish in order to be considered a whistleblower and receive protection under the law. The United Kingdom further distinguishes itself from the United States by not offering a financial reward to whistleblowers out of the fear that it would corrupt the whistleblowing process with greed. Similar to France and Italy, the United Kingdom seems to automatically distrust whistleblowers and be more concerned with their motive than with pursuing their concerns of misconduct.

Blowing The Whistle: Italian Style

Monday, November 12th, 2018

The Event

On November 30, 2017, the Italian Government enacted Law 179: “Provisions for the protection of whistleblowers who report offences or irregularities which have come to their attention in the context of a public or private employment relationship.” This Law established the first set of whistleblower protections in the private sector in all of Italian legislative history.

The Background

Before the enactment of Law 179, Italian anti-corruption law was mainly governed by Legislative Decree 231, enacted on June 8, 2001, and Law 190, enacted on November 6, 2012. Legislative Decree 231 concerning the “administrative liability rules for legal persons, companies and associations, including those without legal personality.” This Decree established direct liability of legal entities for crimes committed by their agents while acting on behalf of the entity for the purpose of benefiting the entity for the first time in Italian history. Even though Decree 231 was groundbreaking in and of itself, this Decree did not contain any protections for whistleblowers. Eleven years later, the Italian Government enacted Law 190 concerning “measures for the prevention and repression of corruption and illegality in the Public Administration.” This Law established the first set of whistleblower rules in Italian history; however, the rules only applied to public entities. Although both of the aforementioned laws were revolutionary and the first of their kind in Italy, they were not enough to effectuate real change.

The Motivation For The Change In The Law

Historically, Italy has been regarded by some as one of the more corrupt countries in the European Union. Even though Decree 231 established direct liability of legal entities for certain crimes committed by their representatives, and Law 190 established regulations for whistleblowing against public entities corruption was still widespread. The Organization for Economic Co-operation and Development’s 2014 Foreign Bribery Report concluded that less than 2 % of the foreign bribery cases were detected through whistleblowing. This motivated the Italian Government to enact Law 179 which amended portions of Decree 231 and Law 190 to provide whistleblowers greater protection and extend those same protections for whistleblowers in private entities.

Who Can Be A Whistleblower Under Italian Law?

In the public sector, whistleblower protections apply to public employees, employees of publically owned private companies, economic public entities, and employees or collaborators of private companies supplying goods or services while carrying out works for public entities that report or denounce misconduct discovered while performing their services under Law 190 and Law 179. In the private sector, whistleblower protections apply to private employees who report or denounce misconduct pursuant to Legislative Decree 231that they witnessed in carrying out of their functions under Law 179. In both the public and private sector, whistleblower protection does not apply to reports that are slanderous, defamatory, or those that either maliciously or negligently turn out to be unfounded.

What Protections Can A Whistleblower Receive?

In both the public and private sector, entities are prohibited from imposing conditions that directly or indirectly affect whistleblowers in a negative way including, but not limited to, imposing disciplinary measures, sanctions, demotions, or dismissals of whistleblowers. If entities are found to have implemented any of the aforementioned measures, those measures are to be considered null and void. In the event that whistleblowers are discriminated or retailed against, they can report the event to the Anticorruption Authority (ANAC) in the public sector, and the Italian Labor Authorities and relevant trade unions in the private sector. Those authorities are supposed to determine if discrimination or retaliation has occurred, and if so, impose sanctions.

How To Blow The Whistle In Italy

In the public sector, public entities are required to adopt internal whistleblower protection measures to preserve the whistleblower’s identity, and establish procedures for managing whistleblower reports under Law 190 and Law 179. If the public entity fails to establish adequate procedures sanctions may be imposed. In the private sector, Law 179 only imposes reporting requirements on private entities that had already enacted a reporting system under Decree 231. Private entities must create one or more channels that allow employees to internally report misconduct, at least one alternative reporting channel to guarantee the confidentiality of the whistleblower’s identity, and appropriate measures to protect the whistleblower’s identity and to maintain the confidentiality of information. If a private entity interferes with any of the reporting requirements sanctions are to be imposed.

The Take Away

The Italian Government is taking steps to combat corruption; however, it is likely not enough. Law 179 fails to include any financial incentives. It is interesting that even though monetary rewards have proven to be an effective tool in whistleblower cases, European countries have not been including them in their whistleblower laws. It raises the question if these countries are actually trying to root out corruption, or if they are just trying to convince the electorate that they are doing so.