The proposed legislation includes provisions for holding members of the management boards of capital companies liable in case of breach of the obligations set out in the Act.
Podsumowanie
- Legal entities, including Polish limited liability companies (spółka z ograniczoną odpowiedzialnością), will be required to establish an internal reporting procedure for violations of EU laws. This requirement generally applies to entities with at least 50 employees, but there are exceptions. Other legal entities may also implement the procedure voluntarily.
- Establishing an internal reporting procedure that complies with the requirements of the Whistleblower Act is a demanding process that involves meeting an extensive list of requirements.
- Failure to establish an internal reporting procedure, or creating a procedure that violates the Act's requirements, may result in criminal liability in the form of a fine.
Work on the whistleblower bill in Poland
The draft of the Act on Whistleblowers aims to implement the provisions of Directive (EU) 2019/1937 of the European Parliament and of the Council of October 23, 2019 on the protection of persons who report breaches of EU law. It is worth noting that the deadline for the implementation of the Directive passed on December 17, 2021. This may lead to an intensification of efforts to avoid negative consequences resulting from the Polish legislator’s failure to meet the deadline.
Under the provisions of the bill, board members of capital companies are specifically responsible for fulfilling obligations set out in the Act. Since members of the management board may face criminal liability for failing to fulfill their duties, they should ensure that their company’s activities comply with the regulations on whistleblower protection.
Obligation to introduce an internal notification procedure in Poland
When considering the liability of members of the management board, the first thing to note is the requirement to establish an internal notification procedure. According to the draft of the Whistleblower Act, legal entities, including Polish limited liability companies (spółka z ograniczoną odpowiedzialnością), must establish both an internal notification and follow-up procedure.
As a general rule, this requirement applies to entities with at least 50 employees, but there are exceptions. Entities engaged in financial activities, anti-money laundering and terrorist financing, transportation security, and environmental protection must establish the procedure regardless of their workforce size. Entities not legally obligated under the draft of the Act on Whistleblowers may establish an internal notification procedure on an optional basis.
In accordance with current wording of the bill, the deadline for capital companies (including limited liability companies) to establish an internal notification procedure is as follows:
- for entities with 50 to 249 employees – December 17, 2023;
- for entities with 250 or more employees, and for entities providing financial services or products, or operating in other fields mentioned above, the deadline is 2 months from the date of the Act coming into force.
Important
Establishing an internal notification procedure that complies with the requirements of the draft of the Whistleblower Act is a complex and demanding process. The Act sets out a detailed catalog of information and requirements that must be fulfilled as part of the procedure. Entrepreneurs should not delay work on the procedure until the last moment, as there may not be enough time to meet the obligations in a timely manner.
Benefits of implementing the notification procedure in Poland
Implementing an internal notification procedure can bring benefits not only to employees but also to board members themselves. The catalog of individuals who can report on breaches of EU laws, according to the Act, is very broad, which means that board members of Polish limited liability companies can also become whistleblowers and benefit from the protection.
In addition, implementing an internal notification procedure can increase trust in the company and help prevent repeated violations. A properly implemented and maintained notification procedure is essential for the proper functioning of a company, providing increased security and better care for the needs of employees, regardless of the company’s size. Entrepreneurs should consider developing a notification procedure as soon as possible within their business.
Criminal liability for violations of the Whistleblower Act in Poland
According to the bill, failure to comply with the Act on Whistleblowers will result in criminal liability. A fine of up to PLN 5,000 will be imposed on a member of the company’s management board who fails to establish an internal procedure for notifications, or establishes a procedure that violates the requirements of the Act.
Disclosing the identity of the person who made the notification, the person who assisted in making the notification, or associated person, in violation of the law, is punishable by restriction of liberty or imprisonment for up to one year.
Actions that prevent or significantly impede the making of a notification may also result in criminal liability. If violence or threats are used, the penalty of imprisonment can be up to three years.
Retaliation against the person who made the notification, as well as the person assisting or associated person, is strictly prohibited. The Act includes a fine, restriction or imprisonment of up to 2 years, and up to 3 years of imprisonment if more than two retaliatory actions are taken.
Finally, it is important to note that whistleblowers themselves may also face criminal liability. This is because making a notification knowing that a violation has not occurred is punishable by restriction of liberty or imprisonment for up to 2 years.
The introduction of the whistleblower regulations into the Polish legal system will certainly be a real revolution, but also a challenge for entrepreneurs. Board members of companies should, above all, ensure the timely introduction of the required procedures and ensure their proper, safe functioning, so as not to expose themselves to criminal liability in this regard.
HOW CAN WE HELP?
The Corporate Legal Advisory Team at Grant Thornton offers consulting services to assist organizations in achieving legal compliance with EU whistleblower protection regulations. Our team helps ensure that your organization’s procedures are in line with these regulations and that appropriate actions are taken to protect whistleblowers.
AUTHOR: Magdalena Wołczek, Junior Associate, Corporate Legal Advisory
