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Managing human resources through the pandemic

Why 2021 should be a ‘Speak Up’ year in your company?

By Katarzyna Saganowska LL.M, compliance director, TMF Poland
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When analyzing changes in Polish regulatory landscape in 2021, it’s difficult not to notice regulators rising attention towards whistleblower protection. To name but a few examples; there has been a proposal for a new act on Criminal Liability of Collective Entities as well as a EU Directive on the protection of persons who report breaches of Union law, which obliges entrepreneurs to create internal processes and procedures for handling and protecting whistleblowers. Undertakings subject to the new regulations are recommended to already take the first steps to review and possibly expand the existing policies and procedures, develop the legal and ethical awareness of their staff and equip their organizations with suitable technical tools and solutions.

Poland, among other Member States, has 12 months to transpose the aforementioned EU Directive into its national legal system. While at the same time the discussions on the final shape of Act on Criminal Liability of Collective Entities are still ongoing.

The EU Directive covers a wide range of people with its protection:

- Employees and volunteers

- Shareholders or stockholders of the company

- Members of management and supervisory bodies of the company

- Subcontractors and supplies

- Clients

Legal protection will be also granted to people related to whistleblower (such as, family members) if they might face adverse consequences in connection to the filed notification.

It is important to know that the whistleblower protection mechanism depends on several premises:

- Information about infringements was obtained while performing duties

- The whistleblower is acting in a good faith

- An understanding that the infringement is related to the material scope of the EU Directive

Given this, it is fair to say that this pertains to infringements of the financial interests of EU and internal market rules. However, despite this, it seems very likely that Polish legislator will cover not only reports of violations of EU law, but also irregularities under national law, while transposing the EU provisions into national legal regime.

There are 3 ways how whistleblower can share his / her observations:

- Internal notification channels of the organization

- External reporting channels (designated by public administration bodies)

- Public disclosure (disclosure of information about infringements directly to media)

Although the wording of the Whistleblower Protection Directive promotes the use of internal channels, the final decision lies with the whistleblower. Therefore, entrepreneurs should dedicate extra effort to shaping their corporate culture in a way that encourages whistleblowers to report suspicions of infringements internally as to avoid some of the negative repercussions of the infringement being public. Efficient and transparent internal procedures will reduce the legal and reputational risks associated with the potential sharing confidential and sensitive information with clients, competitors, public authorities or the media.

Each organization with at least 50 employees has 12 months to establish internal channels and procedures for reporting infringements. It is also allowed to share resources by entrepreneurs employing less than 250 people and to outsource reporting channels.

The key is to ensure that internal/external reporting channels are anonymous and designed to protect the identity of the whistleblower from disclosure. Additionally, investigations must be carried out in a way that third parties do not discover to the source of the information.

Proper handling of reporting channels involves information obligations as well, therefore whistleblowers should, within seven days, receive a confirmation that the notification was successfully received. While within 3 months the entrepreneur should provide information on the actions taken or planned linked to revealed suspicion of potential infringement.

I believe that from the perspective of Polish entrepreneurs’ national lawgivers, while transposing the EU provisions¸ should take clear decision not only on effective and dissuasive sanctions for breaches of whistleblower protection, but also on how to penalize for disclosing false information about alleged breaches in bad faith.

To conclude, we should take for granted that there are no companies which do not face infringements, there are only the ones which do not detect them. The experience of many organizations which already introduced effective procedures of internal reporting of breaches, which validates the claim that an effective whistleblowing system constitutes a crucial element of an effective risk management system in those companies.

I truly hope that understanding of added value for entrepreneurs that results from the introduction of anonymous reporting channels will come with time. However, at the same time I find it difficult to decide if a year is enough for cultural and mental change. In Polish conditions this seems almost revolutionary? The question on how to encourage people to report irregularities in a country where the demons of the past might qualify person acting out of concern for the higher good as a ‘snitch’, is still open.

I would like to encourage as many organizations as possible to consider 2021 as the last bell to start building a culture of caring for the company as a common good because, a stable company means stable jobs.

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