Finland will implement the Whistleblowing Directive through the proposal for the Finnish Whistleblowing Act, which was recently submitted to the Parliament. The proposed Act is supposed to come into force as soon as possible.
What will the Whistleblowing Act entail?
The proposed Whistleblowing Act would provide new protective measures for the so-called whistleblowers reporting breaches of Union law and different kinds of new sanctions. The Act is proposed to contain a prohibition of countermeasures and prevention of reporting, exemption from liability, confidentiality and reverse burden of proof, as well as a possible right to compensation for both the employer and for the whistleblower.
Violation of the proposed Act could result in the organisation having to pay damages and/or compensation to the whistleblower who has been subjected to countermeasures, while a whistleblower who intentionally has made a false report through the channel should compensate their employer for the damage caused.
The proposed Act would create an obligation to establish internal reporting channels, through which breaches of Union law within the organisations could be reported. It should be possible to make reports either written or orally, and the organisation would be able to decide whether it will also accept anonymous reports. The proposed Act would also entail an obligation for the authorities to establish a centralised external reporting channel.
Who will establish internal reporting channels?
Organisations who regularly employ at least 50 employees must establish internal reporting channels regardless of industry. A group of companies may establish one common reporting channel.
When setting up an internal reporting channel, the organisation should inform its employees of the introduction of the reporting channel, the procedures related to reporting, the procedure for reporting through the centralised external reporting channel and the conditions for receiving whistleblower protection.
When receiving reports through the reporting channel, the organisations would have an obligation to investigate the correctness of the report. The organisation will further be obliged to acknowledge the receipt of the report to the whistleblower within seven days and to take further action within three months.
Who will receive protection?
The condition for receiving protection when reporting through a reporting channel is that
- the reported breach will fall within the scope of the Act,
- the whistleblower will fall within the personal scope of the Act, e.g. employees, subcontractors, shareholders, interns and volunteers,
- the proposed three-step reporting procedure will be followed, and
- the whistleblower has a justified reason to believe in the accuracy of the information they reported at the time of reporting.
The condition for the whistleblower to fall under the personal scope of the Act always requires that the whistleblower has received information about the breach in or in connection with their work. The proposed Act would also provide protection from countermeasures for other people who are not whistleblowers but could be subject to countermeasures.
The proposed Whistleblower Act will come into force as soon as possible. The proposed Act also contains a transition period, which entails that organisations must implement their internal reporting channels within three months of the Act coming into force. In addition, the proposed Act contains a transition period until 17 December 2023 for establishing an internal reporting channel for legal entities in the private sector that regularly employ less than 250 employees, and for bringing voluntary reporting channels into compliance with the requirements of the Act.
If you have any questions about the proposed Act, need assistance with establishing internal reporting channels or with actual investigation processes due to whistleblowing, please contact the undersigned or your regular Borenius contact.