Analysis
14 July 2022

Transposition of the European Whistleblowers Directive: Towards a reinforcement of the French protection system

The text of the law aimed at improving the protection of whistleblowers, drafted by the Joint Committee, was approved by the National Assembly on 8 February and by the Senate on 16 February 2022. The entire body of the law, except for the civil fine mechanism in the event of a strategic lawsuit against public participation initially approved, was declared constitutional by the Constitutional Council, and its final version was promulgated on 21 March 2022. This text transposes into French law the European directive on the protection of whistleblowers while making reporting procedures more flexible and strengthening the existing protection system.

 

Since March 21, 2022, France has had a strengthened whistleblower protection system, with the promulgation of Law 2022-401, which transposes the European Directive of 23 October 2019. Indeed, on 8 and 16 February 2022, the National Assembly and the Senate respectively adopted the version of the text drawn up by the Joint Committee. The latter had been appointed following the differences between the versions approved by the Senate and the Assembly. Similarly, in a decision handed down on 17 March 2022, the Constitutional Council found the law to be in conformity with the Constitution, except for the provision initially provided for in the case of a strategic lawsuit against public participation.

Thus, the adoption of this legal text is part of the evolution of the approach started by the law No. 2016-1691 of December 9, 2016, on transparency, the fight against corruption and the modernisation of economic life, known as Sapin II. Indeed, this law contained the regulatory framework in force until March 2022 on this issue, whose adoption of the European directive of October 23, 2019, made it necessary to update the existing provisions.

The recently adopted text seems to further strengthen the protection of whistleblowers. In addition to bringing it into line with EU law, the new text includes a broader definition of whistleblowers and creates new categories aimed at protecting those around them and those who facilitate the reporting.

Similarly, while the conditions for accessing the protective regime are relaxed, the sanctions applicable in the event of reprisals are reinforced. For example, the new legal provisions in force include measures aimed at financially supporting the author of the report who is prosecuted for his or her actions.

 

I. The search for a whistleblower protection regime

Any disclosure of sensitive or public information, including to the authorities, may be problematic.

Except for certain assumptions[1], there is no general duty to denounce in French law[2]. On the contrary, because of the undesirable consequences that the practice of slanderous denunciation may have had in recent history, denunciation has long been frowned upon in the collective consciousness[3].

On the other hand, the law punishes the disclosure of confidential information, as it is the case for business secrets, exposing those who publicly reveal protected content to civil[4] or criminal liability[5].

The various scandals revealed by whistleblowers concerning fraud, corruption, the endangerment of individual and collective interests, and even the violation of fundamental rights and freedoms, seem to have given rise to a new approach: the notion of “informer” is giving way to that of whistleblower[6].

In this sense, the French legislator considered that the regulation and protection of whistleblowers was part of transparency, the fight against corruption and the modernisation of economic activity. Thus, the Sapin II law established a general framework in France, defining the notion of whistleblower, the attached regime, and the conditions of this status, with a view to obtaining the corresponding legal protection[7].

However, the construction of a European-level regime and the adoption of the European directive of 23 October 2019 have made it necessary to adopt a new transposition of the latter into French law.

 

A. Initial concerns about whistleblower protection at EU level

The European authorities have participated in the above-mentioned paradigm shift concerning whistleblowers. On this point, it is worth highlighting a front in the development of this protection at European level, which comes from the judgments of the European Court of Human Rights (“ECHR”) on the subject :ehe ECHR considered that a person who revealed information of general interest should be protected, under the heading of freedom of expression.

Thus, the Guja v. Moldova judgment of 12 February 2008 clearly sets out the criteria for assessing whether an interference with the whistleblower’s freedom of expression is excessive. According to this decision, the public interest in the information disclosed, its authenticity and the availability of alternative means of disclosure must be considered[8].

Similarly, the good faith of the employee, the damage caused to the employer and the severity of the sanction must be assessed[9]. Similarly, a recommendation on the protection of whistleblowers has been established by the Council of Europe. This recommendation proposes important elements of definition[10], as well as general principles that States should consider to ensure adequate protection of public interest information disclosure[11].

 

B. The construction of a uniform minimum protection regime within the European Union

The European Directive on the protection of persons reporting violations of EU law was adopted on 23 October 2019. This is a European recognition of the importance of detecting EU law breaches[12], and the response to the uneven and fragmented protection of whistleblowers by different Member States[13].

The relatively restrictive criterion, in terms of material scope, should be stressed.

Article 2 of the Directive refers only to the disclosure of information in the event of a breach of European law in certain areas, while affirming the possibility for States to open the scope of application to acts not covered by the Directive[14].

Article 4 of the Directive seems to be much broader, as it does not only refer to employees in its European conception, but to a wider group of the entity stakeholders, such as board members, shareholders or even suppliers and subcontractors, as well as their employees[15].

Likewise, it should be noted that the protection sought applies not only to natural persons, as it is the case for Sapin II law, but also to legal persons having a link with the person making the report. Finally, the Directive refers to facilitators and persons close to the whistleblower who are exposed to possible reprisals[16].

Unlike the conditions established by ECHR case law, the Directive does not require direct knowledge of the facts reported, but the mere conviction of their veracity and the existence of a link with the material scope mentioned. Similarly, the Directive does not contain any reference to the condition of disinterest[17].

Futhermore, the Directive requires the creation of reporting channels on the part of the entities concerned. However, unlike Sapin II law, it provides that the whistleblower concerned may choose between internal and external reporting channels.

In other words, in the absence of a hierarchy between the means of raising an alert, the author of the alert is free to proceed by the means he or she considers most appropriate[18]. In any case, if the whistleblower chooses to report internally, the recipient of the whistleblower’s report must provide feedback to the whistleblower within a reasonable period of time, which may not exceed three months[19].

Finally, as regards to the protection that Member States must provide, it is worth highlighting the exemption from civil and criminal liability for reporting, as well as the psychological, legal, and financial support that the whistleblower should receive. Secondly, the directive provides for a list of prohibited measures, as they would involve retaliation against the whistleblower[20].

These prohibitions are also accompanied by a presumption against the employer[21]. Indeed, the Directive specifies that in the event of court proceedings due to harm caused to the whistleblower because of the implementation of measures by the employer, these measures should be considered as retaliation for the whistleblowing. Therefore, the burden of proof on the justification of such measures by a legitimate reason lays on the employer.

 

 

II. The transposition of the European directive in 2019 and the opportunity to improve the French whistleblower protection system

When Sapin II law was adopted in 2016, France was at the forefront of whistleblower issues[22]. However, the conditions and requirements of Sapin II law resulted in insufficient protection in practice. The issue of the particularly strict conditions for granting the whistleblower status, the disadvantages of the hierarchical reporting procedure – necessarily requiring the exhaustion of internal channels before turning to the authorities – and the economic precariousness of the whistleblower in the event of prosecution, have been put forward to explain this lack of protection[23].

These failures, as well as the delay in adapting French domestic law to the 2019 directive, have led to a bill being proposed by MP Sylvain Waserman[24]. Although the initial text was subject to an accelerated procedure at the government initiative[25], after its unanimous approval by the National Assembly, the Senate considered that some elements of the provisions were excessive[26].

However, thanks to the drafting of a reconciled version by the Joint Committee[27], the final bill adopted by the Parliament includes the most important points of the initiative. Thus, with the promulgation of this law on 21 March 2022, the legislator would have seized the opportunity to go beyond the minima set by the Directive.

 

A. The redefinition of the whistleblower and the creation of new statutes

  1. The new legal framework takes up the content of the above-mentioned Directive to reformulate the notion of whistleblower. The following aspects should be highlighted:
    • Removal of the disinterest requirement: Sapin II law imposed as a condition the absence of pursuit of a personal interest through the reporting[28] . However, the text adopted eliminates the reference to the condition of disinterestedness and replaces it with the prohibition of any financial compensation[29] . The condition of good faith initially provided for, however, remains unchanged[30].
    • Possibility of reporting facts the whistleblower has been informed in a professional context: Similarly, in accordance with the European Directive, and according to the new wording, it is not necessary for the facts reported to have been personally known by the whistleblower, insofar as his or her full conviction is sufficient, provided that he or she has obtained the information in the professional context[31]. The previous system, which excluded this last possibility, has been reformed as follows.[32]
    • Extension of the scope of reportable events: In addition, the reference to the existence of a serious and manifest violation prescribed by Sapin II law is deleted, to be replaced by the information relating to a crime, an offence, a violation of an international instrument, a law or a regulation. In addition, the concealment of these situations is included as a possible object of the alert[33].
    • The creation of new statutes and protection regime: Although the literal wording of the text does not allow for the granting of whistleblower status to legal persons, such as NGOs, trade unions or associations, the new wording includes a protection mechanism for the whistleblower’s entourage. Thus, Article 2 of the law provides for specific guarantees for natural or legal persons who facilitate the whistleblowing, for those close to the whistleblower who may be exposed to reprisals, and for legal persons controlled by the whistleblower.[34] Likewise, Article 3[35] replicates the rationae personae scope of the Directive.

B. Abandonment of the staggered reporting procedure

Sapin II Law’s article 8 provided for a staggered procedure as to the channel to be used for launching the alert[36] . It thus imposed as a precondition that the alert be raised internally. Only if no action is taken in this first phase within a reasonable period of time can a report be sent to the authorities[37].

The new law abandons this staggered procedure, in line with European provisions. Although the adopted text does not allow for direct public disclosure before the expiry of the period set by decree, which may not exceed three months[38], the abolition of a hierarchy of approaches, gives the whistleblower the choice to address the designated internal entity or to report directly to external authorities or organisations[39].

 

C. Strengthening the protection of whistleblowers

Sapin II Law initially provided for a ground of criminal irresponsibility for a person who potentially infringes a secret protected by law through his or her disclosures if the infringements are necessary and proportionate to the safeguarding of the interests at stake[40]. At the same time, protections were provided in labour law, notably against unfair dismissal[41] and imposition of reprisals[42].

In this respect, the new law in force considerably strengthens the protection designated for the whistleblower, his/her entourage, and the facilitator. The text updates the list of conduct that may involve retaliation in line with the Directive while providing for their nullity[43], and amends Article 225-1 of the Criminal Code to bring these within the scope of the offence of discrimination[44].

While civil and criminal immunity is reaffirmed, the new text adopted considers the financial difficulties that the whistleblower might face during legal proceedings against him or her. Consequently, the reform provides the possibility for judges to grant an allowance for legal costs to a whistleblower who challenges a retaliatory measure or a strategic lawsuit against public participation procedure. This allowance may be subject to a supplement during trial and the judge may turn the allowance final, even if the whistleblower loses the case[45].

Similarly, a civil fine was initially provided for in the event of abusive or dilatory proceedings against the whistleblower[46]. However, in a decision handed down on 17 March 2022, the Constitutional Council considered that this provision had been adopted according to a procedure contrary to the Constitution, insofar as it was an amendment adopted at first reading that had no link, even indirect, with the text tabled or transmitted[47].

Based on what precedes, the enacted law of 21 March 2022, containing the current system, appears to include a substantial reform to the French whistleblower protection system.

 

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