How to prepare your organization for the new Whistleblowing legislation

The new EU directive provides whistleblowers secure channels and protects them from retaliation. All countries in the EU have to implement the directive, which places essential responsibilities on organizations. Setting up a whistleblowing channel is one of the necessary steps to comply. Implementing new or adjusting your existing processes to handle incoming cases is also important.

We have spoken to Hampus Löwstedt, Legal Advisor at Företagarna, to understand how companies can prepare for and adapt to the new requirements.

In December 2021, the legislation “Protection of Persons Reporting Irregularities Act” entered into force in Sweden. What is new from previous legislation?

The new act, commonly referred to as the “New Whistleblowing Act”, is based on the EU directive and replaces the previous legislation in Sweden. The former legislation that has been active since 2017 was built upon 11 paragraphs, whereas the New Whistleblowing Act contains 60 paragraphs in total.

Some of the differences that I think are important to highlight is that in the previous act, only employees and hired labor were protected. With the new legislation, an expanded group of people is protected, including employees, consultants, candidates, shareholders, volunteers, interns, and more. People connected to the reporting person, such as colleagues or relatives, are also protected.

According to the new law, to be protected against retaliation the report must contain irregularities of public interest or implicate breaches of the Union Law observed in a work-related context. Whereas the previous legislation stated that people were only protected if reporting “serious irregularities”. This is an important change since it broadens the scope of what people can report and still be protected. 

Furthermore, the new legislation does not only include protection against retaliation due to reporting irregularities but also protection against actions that are hindering reporting.

Something that has been broadly discussed is the new requirement placed on companies to introduce internal reporting channels. This means that the new act is not only stipulating what kind of protection a reporting person has against reprisals but also sets up requirements on how the reporting actually should take place.

What do organizations need to do to adapt to the new directive?

All organizations that have 50 or more employees at the beginning of each calendar year are obliged to provide an internal channel for reporting suspected irregularities. For companies with 250 or more employees, this requirement comes into effect on July 17, 2022. Companies with 50 to 249 employees have to provide an internal channel no later than December 23, 2023.

It is also important that organizations educate themselves properly. I hope that this blog post can give some guidance but I would also recommend organizations to read the full legislation, which is pedagogically written and fairly easy to understand. As a member at Företagarna, you are also welcome to contact us to discuss the new act or get other legal guidance.

Whom can organizations appoint as their case handler?

The person or unit that an organization appoints as its case handler should be both independent and impartial. It can either be a person that is employed by the organization or provided externally by a third party.

What is important to think of as an organization operating in several EU countries?

If your operation stretches across several EU countries it is important to look into and stay up to date with the local legislation. All EU Member States are required to implement the new directive but the actual legislation can look different in different countries.

How can the new directive help organizations?

The legislation is primarily designed to protect reporting persons, but by looking at this all together it can also be of great help for organizations. With the new and widely extended legal framework, companies get more guidance in regards to what the internal procedures should look like. Having internal reporting channels can help organizations identify, investigate and address irregularities early. Therefore the new legislation does not only benefit individuals and the society but also the organization where an irregularity might have occurred.

Thank you Hampus for the chat and your detailed replies!

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