Whistleblowing: the impact of the EU directive in Luxembourg

Anne Morel, Head of the labor and pensions department at BSP, tells us about the implementation of the EU whistleblowing directive in Luxembourg and what questions it raises for companies.

Posted jeudi, mars 10 2022
Whistleblowing: the impact of the EU directive in Luxembourg

Anne Morel

LEADERS LEAGUE.Regarding the implementation in Luxembourg of the EU whistleblowing directive: is the country ready to implement this new regulation?

Anne Morel: Although the deadline for transposing Directive (EU) 2019/1937 of the European Parliament and Council of 23 October 2019 on the protection of persons who report breaches of Union law (the “Directive”) was 17 December 2021, a draft law N°7945 was submitted to the Chamber of Deputies on 10 January 2022 to that effect (the “Draft Law”). Going beyond the protection afforded by the Directive to whistleblowers, Luxembourg has chosen to proceed with a horizontal transposition of the Directive, which means that it would also apply to all breaches of national law. The main new provisions introduced by the Draft Law are as follows:

• Who can be a whistleblower?

The Draft Law refers to the broad notion of “worker” and provides that employees and civil servants, as well as shareholders, anyone whose employment relationship has ended or not yet started, subcontractors, etc. can be a whistleblower. All forms of retaliation, including threats and attempts to retaliate, are prohibited. In particular, the suspension of an employment contract, lay-off, dismissal, non-renewal or early termination of a fixed-term employment contract or equivalent measures are prohibited.

• Which breaches can be reported?

The current legislation only covers the reporting of offences related to corruption, influence peddling and illegal conflicts of interest. The intention is to extend the material scope of application of the Directive to breaches of national law in order to ensure a comprehensive and consistent framework to protect whistleblowers.

‘‘The EU draft law raises substantive transposition issues’’

How is it being received within the business community?

The Draft Law is generally well received by the social partners as there is an intent to provide whistleblowers with clear and effective protection. However it raises substantive transposition issues. Indeed, the Employees’ Chamber (CSL) is pointing to the fact that there is no intention for employees’ representative bodies to be consulted during the setting up of internal whistleblowing procedures and that priority was given to internal whistleblowing. Thus, internal and external whistleblowing reporting channels should be put on an equal footing so that a potential whistleblower can always have a choice between one or the other, without ever risking losing the protection afforded them.

The Federation of Luxembourgish Industrials (FEDIL) also recognised that “there is a need to put in place a whistleblower protection framework to help ensure compliance with these rules”. However, it pointed out that such requirement represents a heavy bureaucratic burden for smaller and medium-sized enterprises, which are concentrating their efforts on compliance with other European rules (e.g. personal data protection or geo-blocking). As the Directive provides for a broad definition of a whistleblower, which goes beyond the employment relationship to include subcontractors, shareholder suppliers and even unpaid volunteers or short-term trainees, FEDIL noted that it was imperative to avoid companies being at the mercy of external whistleblowers whose intention was to damage the company’s reputation and supported the idea that the reporting channel should initially be internal.