Two years have passed since the deadline for implementation of the Whistleblower Directive into Polish national law

Two years ago, on 17 December 2021, the deadline for EU Member States to implement the Whistleblower Directive (2019/1937) into national law expired. Poland did not manage to implement the regulation by this deadline and to this day – another two years later – has still failed to do so. Poland, along with Estonia, remains one of the last two EU countries that must introduce a national law on whistleblower protection.

In this article, attorney Marta Trzeciak from Ostrowski i Wspólnicy law firm, describes at what stage the work on the Polish law is currently at. She also summarises how the work has progressed so far, which areas have changed during successively published versions of the draft law.

“Once upon a time…” – 8 versions of the Polish draft law on whistleblowing

On the topic of whistleblowers in Poland, nothing happened for a long time. Three months before the deadline set by the EU Directive (i.e. 17 December 2021), it was difficult to determine even what Ministry was appointed to work on the law. Finally, in October 2021, the first draft of the Act was published.

The draft was then submitted for opinion and raised many objections. Many comments were made as part of the opinion process, reportedly several hundred pages, which stalled the legislative process for a long time.

The deadline for implementation set by the EU Directive has passed. To date, we have already become familiar with eight versions of the bill – starting with the aforementioned draft of October 2021 and ending with the latest draft of the bill, published on 1 August 2023.

Poland and 7 other countries were referred to the EU Court of Justice

Due to slow progress on the implementation of the Whistleblower Directive, on 15 February 2023, the European Commission decided to refer some Member States to the EU Court of Justice. In addition to Poland, the Czech Republic, Germany, Estonia, Spain, Italy, Luxembourg, and Hungary were concerned.

Poland may face financial consequences for failing to transpose the Whistleblower Protection Directive into national law. Currently, of the eight countries identified, only Poland and Estonia remain (the other countries have already managed to approve national legislation).

Vacatio legis – how much time to set up the internal reporting procedure?            

Some aspects have changed significantly in the course of the development of the law. One is the deadline for the entry into force of the Polish Act, and in particular, the deadline for establishing the notification procedure. This has already changed several times:

• The first draft of the law stipulated a short vacatio legis – the law was to enter into force 14 days after promulgation. At the same time, the draft did not stipulate any deadline for establishing the reporting procedure.
  
  
• In response to numerous comments, the legislator extended the deadline. Subsequent versions of the bill stipulated that the law would enter into force two months after the date of promulgation and that legal entities would have two months from the date of entry into force of the law to establish the reporting procedure. This equals to a total of four months.
  
  
• Unfortunately, there has been a ‘backlash’ in the latest versions of the Act and subsequent changes in this regard have gone in an unfavourable direction. According to the latest draft: The law is to enter into force two months after the date of promulgation, with the exception of the provisions for establishing the reporting procedure, which are to enter into force 14 days after the date of promulgation.
  
  
• It is not entirely clear whether the 14-day deadline is when the procedure should already begin to take effect for an entity, but there are increasing indications that this is how the final provision of the proposed law should be understood.These 14 days are far too little time to establish an internal procedure:
  
  
  • First, the reporting procedure is to be consulted with the trade unions (or with representatives of those providing work to the legal entity). This consultation is to last no less than 7 days.
    
    
  • Second, the draft law stipulates that the procedure is to take effect 14 days after it is made known to the aforementioned persons.
    
    

It is therefore clear from the provisions of the law itself that the process will be no less than a total of 21 days. We hope that in the course of further legislative work, the deadline for establishing the procedure will be extended.

No more two-stage implementation of the legal obligations

Originally, the bill envisaged – in accordance with the EU Directive –  subjecting private entities to the obligation to establish an internal notification procedure in two stages:

• First, the obligation was to cover entities for which more than 250 persons perform work,
  
  
• While entities for which 50-249 persons work were to be subject to this obligation in the second stage, i.e. a later deadline of 17 December 2023.
  
  

 This two-stage implementation of the Directive’s provisions has been abandoned in the latest draft of the Act. The law enters into force on a uniform date for all private entities, regardless of the number of persons providing work for them. This is due to the long delay in the implementation of the Directive and already exceeding the second deadline provided for in the Directive for entities with 50-249 employees.

Entities obliged to accept internal whistleblower reports

We are not referring to employees only!

The scope of entities obliged to accept internal reports has also changed. Initially, these were to be employers with at least 50 employees.

The current draft refers to “legal entities” in which at least 50 “individuals” perform or provide work. This change leads to the conclusion that in determining whether an entity is required to establish an internal notification procedure, not only employees, but also persons performing work under civil law contracts, among other contractors, will be included in the 50-person limit. This means that more legal entities will be obliged to adopt internal reporting.

Public entities:

In terms of public entities, it is worth mentioning that in the course of the work, organisational units of a municipality or a county with a population of less than 10,000 have been excluded from the obligation to accept internal reports.

A voluntary acceptance of internal reports by smaller entities is worth considering

We will emphasise that the absence of an obligation for smaller entities to establish an internal reporting procedure does not mean that whistleblowing will not concern them at all.

The whistleblowing law will also apply to these entities. If their employee decides to make an external report (to a competent authority) or a public disclosure, these entities will also be obliged to protect him or her (e.g., respect the prohibition on retaliation).

For this reason, it may be worthwhile for smaller entities to consider voluntarily establishing an internal reporting procedure. With access to a secure internal reporting system, the whistleblower will have the choice to make an internal disclosure (although they are not obliged to do so, they are free to choose). Thus, this may benefit the employer by minimising the risk of external reporting, or public disclosure, as the whistleblower would be entitled to protection anyway.

External reporting to local authorities

In the initial versions of the Act, it was not entirely clear which public authorities would accept external reports. The draft specified only laconically that these would be public administrative authorities that had established a procedure for accepting external disclosures.

The notion of ‘public administrative authority’ has been clarified – according to the current draft law it should be, among others, executive authorities of local government units. This means that each mayor, county executive and provincial executive will be obliged to establish an external reporting procedure. This may lead to a situation where two procedures are in effect in one office – both an internal and an external reporting procedure.

State Labour Inspection will accept external reports

Another change is for the main entity accepting external disclosure. That is, the entity responsible for accepting a whistleblower report if the reporting person cannot determine the authority competent to accept the report. Initially, this was to be the Ombudsman (RPO). This idea was strongly opposed – they did not see a possibility to accept such tasks, due to the provisions of the Law on the RPO and the inability for the already burdened Ombudsman to effectively perform its tasks in the absence of additional funding.

This idea has been abandoned and the State Labour Inspection has been designated as the main authority accepting external disclosures. This choice is also debatable, with opinions mentioning specifically creating a separate office for this role.

Criminal sanctions

Initial horror was aroused by the first versions of the act, which contained very restrictive criminal provisions. They uniformly provided for a fine, restriction of liberty or imprisonment of up to three years for, among other things;

• failing to establish an internal procedure,
• establishing one in violation of the regulations,
• obstructing reporting,
• taking retaliatory action,
• breach of confidentiality regarding the whistleblower’s identity,
• reporting false information.
  
  

 Currently, this criminal liability has been somewhat mitigated:

• A fine for failing to establish an internal reporting procedure or establishing one in relevant violation of the statutory requirements,
• For obstructing reporting: A fine, restriction of liberty or imprisonment of up to one year,
• For retaliatory action against a whistleblower: A fine, penalty of restriction of liberty or imprisonment of up to 2 years,
• And for reporting false information: A fine, restriction of freedom or imprisonment of up to 2 years.

The mitigation of criminal liability for establishing a reporting procedure in violation of the regulations is particularly welcome – as there were concerns that any slightest mistake in the procedure would result in serious criminal liability. On the other hand, the question remains whether criminal penalties are still too severe.

When will the whistleblowing law be passed?

The bill has not yet reached the Parliament and work is still underway in the government. The Minister of Family and Social Policy, in her answer to an interpellation published in November 2023, assured that work in the government is nearing completion.

However, in the meantime a new government has been sworn in on 13 December 2023, including a new Minister of Family, Labour and Social Policy. This will certainly have a bearing on the work on the whistleblower law. In media statements, the new Minister promises to quickly catch up with the implementation of the Whistleblower Directive. However, further changes to the content of the proposed law are not excluded. 

Judgment of the District Court in Toruń

The Polish law has not yet been passed, but it appears that Polish courts are beginning to apply the Directive directly. Although EU directives are not directly applicable, they require implementation into national law. This follows from the case law of the EU Court of Justice that a directive may exceptionally be applied directly if the deadline for implementation has passed, and the directive’s provisions are clear and precise. This direct application is only possible in a state-citizen relationship and therefore does not come into play in a relationship between, for example, an employee and a private entity. Recently, the judgment of our local  District Court in Toruń (where Ostrowski i Wspólnicy are located) off 12 July 2023, IV P 171/22, has made the news.

• The case concerned an employee of a public university and, as the Court pointed out, a public university is an emanation of the state, so direct application of the EU Directive was possible here.
  
  
• The employee made a number of comments and allegations about irregularities in the university’s department. When these went unanswered, he decided to publish an appeal on his social media profile.
  
  
• The employee was terminated with notice, citing as the reason, among others, his violation of the rules of social coexistence in the workplace due to repeated conduct creating tension, conflict and threats to peace, in particular by behaving inappropriately towards colleagues.
  
  
• The court held that the employee, as the reporting person (whistleblower), was eligible for protection under the Directive, and thus the employer, by terminating the employment contract, violated the prohibition on retaliation and should therefore be liable for damages.
  
  
• In doing so, the court found that two legal bases emerged in this regard, i.e. the relevant provisions of the Directive (compensation for breach of the non-compete clause) and the provisions of the Labour Code (compensation for wrongful termination). The Court pointed out that these are not competing legal bases, but provisions that remain in an overlapping relationship with each other.
  
  
• As a result, the court awarded compensation to the employee in the amount resulting from Article 471 of the Labour Code. The Court indicated that there may be doubts as to whether this amount corresponds to the requirements of compensation under the Directive, but this problem did not arise in the case in question due to the principle of binding the demand (the employee only demanded compensation under Article 471 of the Labour Code in his lawsuit).
  
  

Ostrowski i Wspólnicy will continue to monitor the work on the Polish law of whistleblower protection. We invite you to follow the Labor Law Lab’s blog (in Polish), where we keep you updated on the ongoing work in this area.

Visit our page about the EU Whistleblowing Directive or read about national whistleblower laws in the European Union to learn more.  Would you like to discuss a safe and secure whistleblowing solution for your organisation? Please book a free demo!