Whistleblowing, Compliance, and Investigations
Whistleblowing
On June 24, 2021, the Danish Whistleblower Act was enacted, implementing the Whistleblower Directive (2019/1937). The purpose of the act is to protect employees who report violations from retaliation.
At Littler | Denmark we offer a full-service internal whistleblower program in collaboration with our IT provider. We draft whistleblower policies, implement the scheme, and handle all reports through the external IT platform located outside the company’s own IT-systems.
Internal and External Whistleblower Schemes
The act mandates all workplaces in both the private and public sectors with 50 or more employees to establish an internal whistleblower scheme. In addition to internal schemes, the Data Protection Agency has established an external whistleblower scheme known as the National Whistleblower Scheme.
Who can use whistleblower schemes?
The company’s employees can make reports to an internal whistleblower scheme and the National Whistleblower Scheme. In addition, companies may choose to extend the scope to other individuals who obtain information about the company, such as independent contractors collaborating with the reported business.
What can be reported through the scheme?
According to the Danish Whistleblower Act, only specific matters may be reported through whistleblower schemes, including violations of certain EU legal acts, other serious legal violations, or other serious matters. Generally, this scope includes information about criminal offenses, including confidentiality breaches, misuse of financial resources, theft, fraud, embezzlement, and bribery.
Reports concerning the employee’s own employment relationship and conflicts between two or more employees generally fall outside the scope of the act and should be handled through the companies regular HR procedures. However, if the report pertains to serious matters such as sexual harassment or other serious harassment based on race, political or religious affiliation, etc., it may fall within the scope of the whistleblower scheme.
When are whistleblowers protected?
To be protected under the act, whistleblowers must have reported to an internal whistleblower scheme or to the external National Whistleblower Scheme. Furthermore, whistleblowers are covered by protection when publicly disclosing information about violations if the disclosure meets the conditions outlined in section 5(2) of the act.
To obtain protection under the act, the whistleblower must have acted in good faith regarding the accuracy of the information, and the information must fall within the scope of the Danish Whistleblower Act.
The scope of the protection
The protection provided by the Danish Whistleblower Act includes a complete prohibition of any form of reprisal against the whistleblower. This means that a whistleblower must not face any unfavorable treatment or sanctions in response to a report or disclosure.
A whistleblower subjected to reprisals is entitled to compensation.
Compliance Advice
In short, compliance means adherence to rules and guidelines.
Compliance advice is advice aimed at identifying risks, ensuring compliance with specific sets of rules, and preventing the company from facing claims related to rule violations.
Often, it is more cost-effective for companies to avoid legal violations rather than trying to correct them after the damage is done. Ensuring compliance is particularly important in areas where rule violations entail a significant financial risk, such as the risk of fines or other economic sanctions.
In the field of employment law, compliance advice may be relevant with regard to the data protection regulations, as violations of the GDPR can result in substantial fines. International companies establishing themselves in Denmark without prior experience with the Danish labor market may also benefit from general compliance advice.
Such advise may involve a review of employment documents, such as employment contracts and policies, to identify and amend provisions which are impractical or incompliant with the law.
In other cases, companies may have a specific legal or contractual obligation to ensure compliance. As an example, in the construction industry, social clauses are usually agreed upon, creating an obligation for the contractor to conduct audits their subcontractors’ salary, and working terms and conditions to ensure compliance with certain standards.
At Littler | Denmark, we have extensive experience advising Danish and international companies on compliance with employment law regulations.
