Noerr: HR challenges and the new Whistleblowing Act in Romania
Opinion by authors: Oana Piticas (Coordinator White Collar Crime Practice) si Andrada Popescu (Senior Associate).
The Whistleblowing Act in Romania (currently in the form of a revised bill, again waiting for a final vote in the Parliament) has been hotly debated over and over again during the past year: authorities, consultants, lawyers, employers and anti-fraud specialists have been going through the bill in detail and working out the challenges it will raise, both for public entities and private companies.
The focus of the bill is on granting proper protection for whistleblowers and on future compliance challenges, especially for private companies employing at least 50 employees. However, not much has been said about how the future Whistleblowing Act will shape a company’s relations with its employees in the long run. In other words, the impact of the Whistleblowing Act on employment regulations remains unclear, because (allegedly) more pressing concerns have taken precedence to date. Nevertheless, we consider that focusing on future HR challenges is highly advisable and hope to provide a different perspective on this key matter.
We have analyzed how the workplace will be different and what HR representatives should take into account in light of the new Whistleblowing Act, already considered a key instrument for increasing business transparency and preventing fraud.
Whistleblowing: A fine line between loyalty and fairness
Whistleblowers have never enjoyed a good reputation, regardless of the wrongdoings they have helped uncover. This perspective will most likely survive even after the whistleblowing bill passes and despite the fact that the bill focuses on (as the name shows) protecting people who report breaches of the law. There are many reasons for this perspective, which places the whistleblower in a conflict between the search for fairness and respect for individual rights and liberties, and the disclosure of wrongdoings involving the employer. Therefore, especially in case of external and public reports that could lead to serious consequences for an employer, the relationship between the latter and the whistleblower becomes tense and is marked by mutual dissatisfaction and potential abuse. Such sensitive matters have to be managed by HR representatives and this is not an easy task to do. The following matters (some of which are specific to the Romanian Whistleblowing Act, some not) will have to be considered in particular:
#1 Employment confidentiality seen in a new light
Employment relations are founded on longstanding principles, including the obligation of employees to maintain confidentiality with regard to employer-specific matters (such as finances, client portfolio, know-how, commercial secrets etc.). However, in light of the upcoming Whistleblowing Act, employees are no longer liable for disclosure of confidential matters if such disclosure is deemed necessary to uncover a breach of law by an employee. Moreover, whistleblowers are not liable for infringements of IP rights, commercial or professional secrets, GDPR breaches or harm to a person’s reputation or image, should such infringements be generated as a result of a whistleblowing report (internal, external or public). Therefore, employment confidentiality is to be seen in a new light from now on, albeit still subject to legal limitations and the employer’s right to respond to a breach of confidentiality. Moreover, such a breach of confidentiality can no longer be regarded as misconduct leading to a disciplinary investigation and a penalty for the employee.
Last but not least, the liability exemption will be extended even further and cover the actions of an employee that would otherwise be considered misconduct if committed for the purpose of obtaining access to information or data about a potential breach of law. In this case, disciplinary investigations will also be considered illegal, with all related consequences.
#2 Increased protection against whistleblowing-related harassment
While direct retaliation and/or harassment by the employer of an employee who has decided to blow the whistle is more easily preventable, the same does not apply to bullying or harassment initiated by coworkers. In other words, employers cannot easily control a collective response towards a whistleblower, although, from a legal perspective, it should be able to. Here we refer to Government Ordinance no. 137/2000 on the prevention and penalization of discrimination, which imposes a general obligation on every employer to prohibit and prevent any form of discrimination or harassment in the workplace.
Unless the prohibition of direct or indirect whistleblowing-related harassment and discrimination becomes a general principle in every company, with the right tone set at the top, employers will become susceptible to claims for damages and serious lawsuits, since ostracization of a whistleblower is a common and unfortunate reaction we see every day. It is especially this reaction that entitles the whistleblower, according to the upcoming Whistleblowing Act, to obtain full compensation for any damages suffered as a result of a whistleblowing report.
#3 Disciplinary investigations
The general rule in this regard is clear: any form of retaliation for a whistleblowing report is forbidden, especially retaliation consisting in a disciplinary investigation or employment penalty. It is also clear that the limitation of the employer’s disciplinary prerogative refers solely to the act of whistleblowing – however, what is or is not linked to a whistleblowing report is not as clear and will be determined by the courts of law when dealing with cases of potential retaliation disguised as a disciplinary measure imposed for a different instance of misconduct.
However, a reference point in this regard is provided by the whistleblowing bill: as per the express provisions of the current bill, any employee subject to a disciplinary investigation initiated within one year of the filing of a whistleblowing report will benefit from free legal assistance during that disciplinary investigation. In other words, it is presumed that disciplinary investigations initiated in the first year after a whistleblowing report might be still connected or linked to the whistleblowing report, regardless of the official or formal reason for the disciplinary investigation.
The challenges above are just some of the aspects to consider from an HR perspective and we consider that many more will follow once the whistleblowing bill is passed. Employment relations and overall workplace regulations will be impacted by this game-changing law and employers will have to adjust longstanding guidelines to accommodate a new principle: fairness trumps loyalty, at least when it comes to potential breaches of the law. Internal matters in a company, protected to date by specific legal means and employer rights, will lose this protection in favor of a more transparent working environment.