Disclaimer: To provide employers with quick and practical information about how to comply with their obligations between now and the entry into force of the Law (as defined below), this newsflash was written on the basis of Bill of law no. 7945 as debated and voted on in Parliament on 16 May. Readers should be aware that the final version of the Law has not been made official at the time of publication of this newsflash and that the Law as published may contain additional details for future consideration.
Luxembourg should have implemented European Parliament and Council Directive (EU) 2019/1937_ of 23 October 2019 on the protection of persons who report breaches of EU law by 17 December 2021.
Bill of law no. 7945_, which implements the Directive into Luxembourg law, has just been exempted from the second constitutional vote and so the law should be published shortly in the Official Journal Mémorial (the "Law").
The Law makes fundamental changes to Luxembourg's existing legal framework. Unless otherwise stated, it will enter into force on the 4th day after its publication in the Official Journal.
Below are the main elements to note from the perspective of
Luxembourg employment law.
1. Objective
The aim is to create a harmonised legislative framework to
protect whistle-blowers against all forms of retaliation that might
deter or intimidate them, in order to guarantee the rule of law.
Ultimately therefore, the Law enforces the right to freedom of
expression, subject to certain rules.
2. Sectors affected
Every economic entity in Luxembourg will be affected by the Law,
whether they are in the public sector or the private sector. In
particular, the following can be whistle-blowers in a work-related
context and are therefore protected: public and private sector
workers, job applicants, former workers, interns, volunteers,
self-employed persons, shareholders, managers,
facilitators1, and third parties or legal entities
linked to a whistle-blower.
3. Infringements covered
Although the Directive only covers the disclosure of information about the breach of certain pieces of EU legislation, the scope of the Law extends to any breach of national or EU law (act or omission) and to all cases in which the whistle-blower had reasonable grounds to believe that the information fell within the scope of the Law. However, only information obtained in a work-related context is covered.
The Law provides for several exclusions from its scope. In
particular, whistle-blowers whose communications are covered by any
of the following are excluded: (i) secrecy of communications
between a lawyer or a notary and their client (legal professional
privilege), (ii) secrecy of judicial deliberations, and (iii)
medical secrecy (medical professional privilege).
4. Employers' obligations
The Law creates an obligation to establish internal reporting
channels and procedures which applies to:
- Legal entities in the private sector with 50 or more workers.
Entities with between 50 and 249 workers have the option to share
the resources required for receiving and following up on reports.
The staff delegation should also be involved in setting up the
reporting channels.
- Legal entities in the public sector, other than
communes with fewer than 10,000 inhabitants.
The obligation to set up internal reporting channels will apply from the entry into force of the Law. However, for private sector businesses with between 50 and 249 workers, the obligation is deferred to 17 December 2023.
The internal whistle-blowing procedure must meet certain criteria (including security and confidentiality, and clear and easily accessible information) and must be carried out within certain time limits. These can be summarised as follows:
5. Other reporting channels
In addition to the opportunity to report a breach of the law
through an internal channel, a whistle-blower may also:
- Make a report via an external reporting channel to one of 22
competent authorities, including the Inspection du Travail et
des Mines (Inspectorate of Labour and Mines), the
Commission de Surveillance du Secteur Financier (CSSF) or
the Administration des Contributions Directes (Direct Tax
Authority).
- Make a public disclosure.
The Law states that internal reporting is the preferred
procedure in the first instance. However, this is a recommendation
and not an obligation.
6. Protection of whistle-blowers
Protection of whistle-blowers is a matter of public policy and is thus mandatory. It applies provided the whistle-blower has made a report within the meaning of the Law, is acting in good faith, and had reasonable grounds for believing the information reported was true and that its disclosure was necessary. A whistle-blower's identity must remain confidential. They are also protected against any form of threatened, attempted, or actual retaliation (such as unfavourable modification of employment contract, withholding of promotion, or dismissal), which will be null and void by operation of law.
The Law introduces various measures to ensure effective
protection for whistle-blowers. These include for instance reversal
of the burden of proof in their favour, an expedited procedure
before the competent courts, various types of remedies with
different outcomes, and partial immunity from liability.
7. Sanctions
There are a number of penalties for non-compliance with the
Law:
- Anyone who retaliates or brings vexatious proceedings against a
whistle-blower will be liable for a fine of EUR 1,250 to EUR
25,000.
- Employers who, among other things, fail to comply with their
obligation to set up an internal reporting channel, hinder a report
or refuse to remedy an identified breach will be liable for a fine
of EUR 1,500 to EUR 250,000 (which can be doubled for repeat
offences).
- Anyone who reports false information will be liable to a prison
sentence of eight days to three months and a fine of EUR 1,500 to
EUR 50,000. They may also be held civilly liable.
Finally, it is interesting to note that Parliament has
encouraged the Luxembourg government to carry out a qualitative
evaluation of the implementation of the Law, once it has been in
force for two years.
Footnote
1. Natural persons who assist a whistle-blower in the reporting process in a work-related context, and whose assistance should remain confidential.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.