On 16 May 2023, Bill of law No. 7945 was exempted from the second constitutional vote, meaning that Luxembourg will soon have a whistleblowing law, which will significantly impact employers.
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, facilitators[1], 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 three 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.
