What exactly is Whistleblowing?
Whistleblowing refers to the disclosure and reporting of misconduct, wrongdoing, illegal activities, or ethical violations within an organization by employees or other individuals with insider knowledge. A whistleblowing reporting channel provides a secure and confidential way to share such concerns. It encourages potential whistleblowers to come forward with their observations without fear of retaliation.
How does it help companies or society?
By identifying problems at an early stage, companies can react quickly, minimize damage, and protect their integrity. A well-implemented reporting channel also promotes a transparent corporate culture and fosters a shared understanding of ethical behavior within the organization. Ultimately, however, a whistleblowing system not only protects the company—it also serves the broader public interest.
Who can report – and what counts as a violation?
The law allows not only current employees but also former staff members, job applicants, and business partners to submit reports. Reportable violations cover a wide range of issues, including:
- Corruption and bribery
- Violations of financial control and accounting rules
- Environmental offenses
- Breaches of labor laws
- Data protection violations
Reporting misconduct: the EU whistleblower directive
In the EU, many companies are now legally required to establish a whistleblowing reporting channel. This obligation applies, among others, to:
- Companies and public institutions with at least 50 employees
- Companies with an annual turnover of more than 10 million euros
- Companies operating in the financial sector
When setting up a whistleblowing system, companies must follow these guidelines:
- Confidentiality: The identities of the whistleblower and all individuals mentioned in the report must be protected. While anonymous reporting is not mandatory, it is strongly recommended.
- Multiple reporting channels: There must be more than one way to report misconduct, including both written and verbal options.
- Handling of reports: All incoming reports must be reviewed carefully, and appropriate follow-up actions must be taken. The responsible body must investigate violations and misconduct effectively.
- Documentation: All reports must be recorded in a whistleblowing report and deleted three years after the case is closed. In some cases, longer retention may be required.
- Protection from retaliation: Whistleblowers must be protected from any form of disadvantage in their professional environment.
- Duty to inform: Companies must inform their employees about the available reporting channels and procedures for reporting misconduct.
Setting up a whistleblowing channel: your options
When establishing a reporting channel, companies have several options:
- Internal solution: Set up an internal department or appoint responsible staff members with the required expertise, who are independent in carrying out this function.
- External solution: Engage a specialized service provider or an ombudsperson (e.g. an attorney) to manage the reporting process.
- Digital solutions: Implement a web-based whistleblowing system. Regardless of the chosen approach, it is essential to ensure that the whistleblowing channel operates independently and is equipped with the necessary resources and competencies.
Whistleblowing regulations in Switzerland
As a non-EU member, Switzerland is not required to implement the EU whistleblower directive. A draft law on the "protection of employees reporting irregularities in the workplace" was rejected by the Swiss parliament in 2020. As a result, there is currently no nationwide legal framework for the protection of whistleblowers in Switzerland. However, the canton of Geneva has enacted a specific law that applies to employees of cantonal administrations, municipal authorities, and public institutions within the canton. In addition, the Swiss Federal Audit Office operates its own whistleblowing channel. Several public administrations have also established complaint offices, and some private companies have voluntarily set up internal reporting systems.
When must Swiss companies comply with the EU directive?
The situation is different for Swiss companies that also operate within the EU. If your company has a subsidiary or legal entity based in an EU member state, it is generally expected to comply with the EU Directive 2019/1937. This includes providing an internal reporting channel and investigation process that is compliant with the GDPR. In such cases, adherence to the whistleblowing obligation of the European Union becomes not just a matter of best practice—but a legal necessity.
What is the status in the EEA – for example, Liechtenstein?
The EU whistleblower directive does not automatically apply to countries in the European Economic Area (EEA) such as Liechtenstein. For it to take effect, the directive must first be formally incorporated into the EEA Agreement—a process that is still ongoing. As of now, no specific timeline has been set for its adoption in Liechtenstein. Nonetheless, it is foreseeable that the directive will become relevant within the EEA. Companies based in Liechtenstein should therefore familiarise themselves with the requirements of the whistleblowing obligation of the European Union and assess whether they could fall under future regulation. Taking proactive steps—such as establishing internal reporting channels and training employees—is already considered best practice in the field of compliance.
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