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What you need to know about the
whistleblower scheme

A whistleblower scheme is a powerful tool because it helps to shed light on serious conditions in the company that are either harmful or can develop into this over time. Whether it is fraud or person-related matters, a whistleblower scheme is a tool for maintaining an open and honest form of business.

Why is everyone
talking about whistleblowers?

From December 17, 2021, it became mandatory to have a whistleblower scheme if one is a private company with more than 249 employees. From December 17, 2022, the same will apply if you are a small company with more than 49 employees. We look at where the legal requirement for a whistleblower scheme originates and what such a scheme tries to come to terms with.

Where does the legal requirement for a whistleblower scheme originate?

On February 25, 2021, the Ministry of Justice submitted a proposal for a law on the protection of whistleblowers in accordance with the European Parliament’s directive, which was adopted on October 23, 2019. In short, the directive requires companies of various sizes to establish a whistleblower scheme.

Later in the year, on June 29, 2021, the Danish Parliament passed a law on the whistleblower scheme valid from December 17, 2021, for private companies with more than 249 employees and for public institutions with more than 49 employees.

The Whistleblower Act also applies to smaller companies with more than 49 employees. For these, the whistleblower scheme must not be implemented until 17 December 2023.

In addition to reports of violations of EU legal rules, which relate to e.g. public procurement, financial services, products and markets, the prevention of money laundering and the financing of terrorism, etc., the law will also cover “serious offenses in general, or other serious matters“.

Serious offenses in general are understood to be offenses of criminal law rules. This can be, for example, fraud, embezzlement and theft.

In other serious matters, these are generally matters of such a nature that a disclosure will be in the best interests of society or the public. This means, among other things, that the scope of the scheme includes sexual abuse and harassment in various guises. If it affects freedoms or personal integrity, it falls within the core area of the scheme. However, it is always a concrete assessment from report to report to find out whether the notified case falls outside or within the scope of the Act.

Legal requirements for the implementation of a whistleblower scheme

From December 17, 2021, companies with more than 249 employees were required to establish an internal whistleblower scheme where employees anonymously can report violations.

The term internal whistleblower scheme means that the scheme is only made available to the company’s own employees, but it can also be made available to others, such as external suppliers, volunteers, trainees or former employees.

In relation to a report, an impartial, independent unit must be appointed internally. Either in the form of a person or a department that administers the whistleblower scheme. A unit that, in other words, receives alerts and has contact with the whistleblower without receiving instructions regarding the specific case processing. In relation to the designation of a whistleblower unit, there must be an organizational distance between the unit and the management. It is therefore advantageous to outsource the whistleblower scheme in whole or in part to third parties, e.g. lawyers, if these live up to the law’s requirement of impartiality.

In addition, an independent and independent external whistleblower scheme will be established at the Danish Data Protection Agency, which can deal with violations of the above matters.

How does a whistleblower scheme add value to a company?

A whistleblower scheme is a powerful tool because it helps to shed light on serious conditions in the company that are either harmful or can develop into this over time. Whether it is fraud or person-related matters, a whistleblower scheme is a tool for maintaining an open and honest form of business.

The Whistleblower Act stipulates that as a company you must establish procedures on how to handle reports from whistleblowers, and in addition there are also documentation obligations.
In practice, this will mean that you must document that you have implemented anonymous reporting channels and that you have appointed impartial members of a whistleblower unit. Furthermore that you have described specific procedures on how the unit can receive reports, provide a confirmation to the whistleblower, make a follow-up on the report itself and give a feedback – being, a message to the whistleblower about what follow-up actions you have done. All within some deadlines described in the Whistleblower Act.

There are several administrative tasks in maintaining a whistleblower scheme, and it is therefore advantageous to implement a whistleblower system, where the procedures are prepared for practice in accordance with current legal requirements, where high security around the whistleblower is guaranteed, and where the GDPR regulations are complied. In addition, a whistleblower system can increase the security and well-being of your company, because anonymous communication channels have been established and specific procedures for how reports of various grades are to be handled.

Do you want to hear more about what D4Whistler can offer your company?

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