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Protection of Whistleblowers

The aim of the act Protection of Whistleblowers No. 40/2020 is to encourage the reporting of breaches of legal obligations and other reprehensible misconduct and so seek to suppress such conduct.

Protection of Whistleblowers - aim of the act

To this end, the act authorises employees acting in good faith and believing that a breach of legal obligations or other reprehensible misconduct has taken place in their employer’s operations to report information or pass on materials to a person within the company, or to the police authorities or other appropriate public surveillance authorities, e.g. the Parliamentary Ombudsman, the Auditor-General or the Administration of Occupational Safety and Health.

In the case of employees of central or local government, or of undertakings that are 51% or more in public ownership, this is not merely an authorisation but an obligation to report.

English:

Protection of employees

The Act contains provisions that confer a certain protection on employees who report violations of legal obligations or other reprehensible misconduct in the operations of their employers. This protection is subject to the condition that the employee complies with the provision of the Act and follows the procedural rules set out in it.

Amongst other things, this protection means:

  • That divulging the information is not regarded as a violation of the non-disclosure or confidentiality obligations by which the employee is bound; nor does it entail criminal or tortious liability for the employee and it cannot result in sanctions by the executive branch of government or encumbering measures according to labour law.
  • That the employee may not be subjected to unjust treatment; such treatment includes, e.g., a reduction of entitlements, a change of working conditions to the employee’s disadvantage or termination of the employee’s engagement.
  • That if a dispute is brought to court over the employee’s position, he or she shall be granted legal aid at the district court, Court of Appeals and Supreme Court level.
  • That the party receiving the information or materials is obliged to treat in confidence all personal data regarding the identity of the whistleblower unless the latter gives his or her unequivocal consent to having his or her identity revealed.

The main rule is that external whistleblowing must be preceded by internal whistleblowing

The general rule is that whistleblowing outside the company or organisation, e.g. taking the matter to the media, is not permitted unless the channels for ‘internal whistleblowing’ have first been exhausted.

‘Internal whistleblowing’ is when the employee, acting in good faith and believing that a breach of legal obligations or other reprehensible misconduct has taken place in the employer’s operations, reports information or passes on materials to a person within the entity or to the police or another surveillance authority, as appropriate, e.g. the Parliamentary Ombudsman, the Auditor-General or the Administration of Occupational Safety and Health.

Conditions governing external whistleblowing

External whistleblowing’ is when an employee, acting in good faith and believing that a breach of legal obligations or other reprehensible misconduct has taken place in the employer’s operations, reports information or passes on materials to a party outside the entity, e.g. to the media.

Whistleblowing of this type is subject to the following conditions:

  1. The whistleblower shall normally have exhausted the channels for internal whistleblowing.
  2. The divulging of the information must be made in good faith, i.e. the whistleblower must have good reason for believing that the information or materials are correct, that making them public is in the public interest and that no other course of action is available to prevent the violations or conduct in question.
  3. The whistleblower must have just reason to believe that the conduct in question is of a type that could be punishable by imprisonment.

External whistleblowing is also permitted in very exceptional cases when, for valid reasons, internal whistleblowing is not possible; this refers to instances where making the information known is regarded as involving such important public interests that the interests of the employer or of other persons must give way to having the information brought to the notice of an external party, for example

so as to protect:

  1. The security of the state, or the national interest in the sphere of defence
  2. Important national economic interests
  3. Human health
  4. The environment

Feedback to the whistleblower on measures taken

The person who receives the information within the company or organisation, i.e. the employer or the employer’s representative, shall inform the whistleblower whether the information given resulted in any action being taken, and if so, what action was taken. It is desirable that the employer state a time limit in its rules of procedure so that the whistleblower will not interpret delay as meaning that his or her call for action has been rejected or that the employer has failed to act.

Procedural rules on whistleblowing at the workplace

Under the Protection of Whistleblowers Act, companies or other workplaces with a staff complement of 50 or more on an annual basis are obliged to set rules, in consultation with the employees, on procedure for whistleblowing. The aim of this is to make it easier for the employees to rely on the Act and for the employer to respond to whistleblowing.

The rules are to be set out in writing, and shall cover the receipt, handling and processing of reports of possible breaches of legal obligations or other reprehensible conduct in the employer’s operations. The rules shall be accessible to all employees and may not in any way curtail their rights according to the Act.

Here follow some points that employers must bear in mind when drawing up such rules:

  • Rules of this type must be in place in companies or other workplaces with a staff complement of 50 or more.
  • Employees must be consulted when the rules are drawn up.
  • The rules must be in writing and must be accessible to all employees.
  • The rules may not curtail employees’ rights as set out in the Protection of Whistleblowers Act.
  • The rules shall state who, within the company or organisation, is to receive whistleblowers’ reports and how they are to be handled.
  • It is sensible to state a time limit for informing the whistleblower of whether his or her report was considered as giving grounds for action so that the whistleblower will not interpret delay as meaning that his or her call for action has been rejected or that the employer has simply failed to act.

The Act provides for the Minister of Finance and Economic Affairs to issue rules in this area for public bodies and state-owned enterprises. Local authorities (municipalities) are to issue rules for the workplaces under their authority, and the Administration of Occupational Safety and Health is to publish a model for the rules on its website for use by other workplaces. The Act also provides that the Administration of Occupational Safety and Health is to monitor that employers adopt such rules.

Model for rules on procedure for whistleblowing

Model for rules on procedure for whistleblowing are available here for the use ofenterprises that are in private, or mainly private, ownership.

‘Internal whistleblowing’: when an employee, acting in good faith and believing that a breach of legal obligations or other reprehensible misconduct has taken place in the employer’s operations, reports information or passes on materials to a person within the entity or to a public surveillance authorities.

‘External whistleblowing’: when an employee, acting in good faith and believing that a breach of legal obligations or other reprehensible misconduct has taken place in the employer’s operations, reports information or passes on materials to a party outside the entity, e.g. to the media. External whistleblowing is not normally permitted unless all opportunities for internal whistleblowing have first been exhausted.

‘In good faith’: this means that the employee has good reason to consider that the information or materials shared are correct, that it is in the public interest to share them and that he or she has no alternative method of preventing the breach of legal obligations or the misconduct involved.

‘Reprehensible misconduct’: conduct which jeopardises the public interest, e.g. conduct which threatens people’s health or security, or that of the environment, without constituting an evident breach of legal obligations.

‘Employee’ means, for the purpose of these rules, a person who, due to his or her position, has access to information or materials referring to his or her employer’s activities by virtue of working for the employer by engagement or temporary or permanent appointment to a position, or as an independent contractor, member of the board, trainee, temporary worker or volunteer. The employee shall enjoy protection under the Protection of Whistleblowers Act, No. 40/2020, after termination of this role.

Employees of [XXXXXXXX ehf./hf.] may, acting in good faith and believing that a breach of legal obligations or other reprehensible misconduct has taken place in the company’s operations, report information or pass on materials to a person within the company who is able to take steps to have such conduct stopped or to respond to the illegal or reprehensible misconduct, or to the police authorities or other appropriate public surveillance authorities, e.g. the Parliamentary Ombudsman, the Auditor-General or the Administration of Occupational Safety and Health.

Whistleblowers may report the matter to their immediate superiors. [Here it shall be stated how reports of misconduct or violations of legal obligations are to be handled within the company and who is to receive such reports.]

The person who receives the information or materials shall be obliged to take steps to have the illegal or reprehensible misconduct stopped, or to respond to the situation in some other way.

The person who receives the information or materials shall inform the whistleblower whether they resulted in any action being taken, and if so, what action was taken. [1]

The person who receives the information or materials shall treat in confidence all personal data regarding the identity of the whistleblower unless the latter gives his or her unequivocal consent to having his or her identity revealed.

An employee who has passed on information or materials without this leading to a satisfactory response within the company may, acting in good faith, share the information or materials in question with external parties, including the media, as long as the employee has just reason to believe that the conduct in question is of a type that could be punishable by imprisonment.

In very exceptional cases when, for valid reasons, it would be out of the question to proceed as described above, the information may be passed to external parties without any internal whistleblowing having first taken place. 

The condition for this is that the sharing of the information is regarded as involving such important public interests that the interests of the employer or of other persons must give way to having the information brought to the notice of an external party,

for example so as to protect:

  1. The security of the state, or the national interest in the sphere of defence,
  2. Important national economic interests,
  3. Human health,
  4. The environment.

 

 [1] It would be sensible to state a time limit here so that the employee will not interpret delay as meaning that his or her call for action has been rejected.

Providing that the conditions of the Protection of Whistleblowers Act, No. 40/2020, are met, the divulging of information or sharing of materials shall not be regarded as a violation of any non-disclosure undertaking or confidentiality obligation by which the employee is bound by law or in other ways. Divulging or sharing information of this type shall not result in the imposition of criminal or tortious liability on the person concerned and cannot result in administrative sanctions or encumbering consequences under labour law.

Employees who have divulged information or shared materials under the Protection of Whistleblowers Act may not be subjected to unjust treatment. Treatment of this type includes, e.g., reduction of entitlements, changing working conditions to the employee’s disadvantage, terminating employment contracts, cancelling employment contracts or making the whistleblower suffer for his or her actions in another manner. Violation of this provision may lead to punishment by fines or up to two years’ imprisonment.

If a dispute is brought to court over the position of an employee regarding whether or not the divulging of information or sharing of material was lawful, or because the employee has been subjected to unlawful treatment after the incident, the employee shall be granted legal aid (representation, free of charge) in the district court, Court of Appeals and the Supreme Court. Legal aid shall be cancelled if it is demonstrated in court that the employee was not acting in good faith when divulging the information or sharing the materials.