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Are you ready for the Whistleblowing Directive?

Nicola Zehnder
Manager | Compliance, RegTech & Managed Legal Services | Whistleblowing Specialist | Sports Regulatory Leader | Legal, PwC Switzerland

All EU member states have to transpose the Whistleblowing Directive into their national law by December 2021. What are the key requirements for companies in the EU? And why might Swiss companies be affected by the tighter regulation in the EU as well?

Instances of wrongdoing inside companies and organisations often come to the surface when whistleblowers speak up. Whistleblowers are individuals who come across information about illegal or unethical activities or omissions that may harm the public interest and report it to their employers, competent authorities or the press. They have an important role in uncovering misconduct, and should therefore be protected.

However, there was no uniform level of protection in the EU member states until the “Directive on the protection of persons who report breaches of Union law” (“EU Whistleblowing Directive”) came into force in December 2019. Member states need to transpose the minimal requirements laid out in this Directive by December 2021.

Who is affected?

As a general rule, all companies in the EU need to comply with the requirements set out in the national law of each member state that needs to respect the minimum requirements of the EU Whistleblowing Directive. Furthermore, it is possible for EU member states to provide even stricter regulations in their national law for companies based in their country. It is therefore important for companies to familiarise themselves with local requirements as soon as possible. Companies based in Switzerland might also be affected by the EU Whistleblowing Directive via the corresponding national law if they have subsidiaries in an EU member state.

What are the key requirements?

In general, companies with over 50 employees need to implement an effective and efficient whistleblowing reporting channel. For companies in the financial industry, a whistleblowing reporting channel needs to be implemented regardless of the number of employees. The sharing of resources for reports and investigations is possible for companies with between 50 and 249 employees as long as confidentiality is guaranteed.

The EU Whistleblowing Directive stipulates a three-step reporting channel: an internal reporting channel, an external reporting channel (law enforcement agency or competent authority) and lastly public disclosure if the law enforcement agency or competent authority does not take satisfactory measures. The Directive also provides for certain rules relating to the process, deadlines and responsibilities. Due to the sensitivity of the involved data, data protection regulations need to be taken into account.

Further, employees at national or local level, volunteers, interns, non-executive members and shareholders need to be protected against any form of retaliation (suspension, termination, refusal of promotion etc.).

How can PwC support you?

Based on our collaboration with the international PwC network we are constantly monitoring the national legislation in all member states, and our experts at PwC can support you in developing and implementing or enhancing an appropriate and trustworthy incident reporting system. Even for (Swiss) companies that do not fall under the scope of the Directive, an appropriate whistleblowing system reduces the risk of public discrimination against named parties, and by acting as ethical role models companies also strengthen the trust of employees, third parties and the public. 

If your company wishes not only to be compliant but also to demonstrate good corporate governance and promote an ethical culture, get in touch with us!

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Contact us

David Bundi, MLaw

David Bundi, MLaw

Director | Head of Compliance, RegTech & Managed Legal Services | Metaverse Strategy & Regulatory Leader | Legal, PwC Switzerland

Tel: +41 79 625 58 20

Nicola Zehnder, MLaw, Attorney-at-Law

Nicola Zehnder, MLaw, Attorney-at-Law

Manager | Compliance, RegTech & Managed Legal Services | Whistleblowing Specialist | Sports Regulatory Leader | Legal, PwC Switzerland

Valérie Bourgaux, MLaw, LLM

Valérie Bourgaux, MLaw, LLM

Senior Associate | Compliance, RegTech & Managed Legal Services | AI, Metaverse, Data Protection & Whistleblowing Specialist | Legal, PwC Switzerland

Tel: +41 58 792 47 66