Latvia: protection of whistleblowers: in the interests of companies and as a statutory obligation
Latvijas strīdu risināšanas ziņas latviešu valodā Jūs varat lasīt šeit: In Latvian

  Ieva Andersone
  Ieva Andersone
  Madara Meļņika
  Madara Meļņika
Dear clients and cooperation partners,

On 1 May 2019, the Whistleblowing Law ‒ which has been much discussed in the media, conferences, Saeima rooms and university halls ‒ will come into force.  Although this moment is several months away, a dutiful employer who wants to protect the interests and rights of its employees, as well as to avoid penalties, should start preparing for this law coming into effect.

What are the new company obligations?

Companies with more than 50 employees will need a mandatory internal whistleblowing system. Employees must be informed about the system as soon as they start work or other legal relations related to professional operations. Information about the system must be easily accessible in the workplace.

Many companies, especially international groups, already operate this system of reporting; however, this does not mean that companies can relax: attention is needed to the scope of whistleblowing topics, the obligation to notify employees and active protection of employees’ rights and identity.

What is a whistleblower?

Under the law, a whistleblower has been defined as someone who (a) reports an alleged violation that may harm their company's interests and who (b) believes that the information is true. The information must have been obtained while at work or upon establishing working relations. The law does not specify exhaustively the alleged violations to be reported; however the main risks include omission or abuse by officials of their position, corruption, tax evasion, as well as environmental, construction, public health, public procurement and human rights violations.

In the context of employment, it is significant to understand that a whistleblower is not a “traitor” who accuses or slanders colleagues in the whistleblower’s own interests. On the contrary – whistleblowing activities are fuelled by honest intent, with informants wanting to solve some wrongdoing in the working environment or to prevent crime. The law expressly states that protection for whistleblowing is removed in cases when intentionally false data or state secrets are revealed, as well as in cases when the report concerns violation of personal interests alone.

For example, whistleblowing should help a company to detect misappropriation of company funds or employees’ dishonesty. This means that it is in the interests of the company to set up a whistleblowing system.

Whistleblowing process

A whistleblower can report alleged violations via the institution’s or company’s internal whistleblowing system, via the whistleblower’s point of contact or specific associations and establishments, or by addressing the competent institution, for example, the investigative authorities or the prosecutor’s office. The State Treasury has been appointed as a point of contact for whistleblowers to supervise the newly established mechanism, control uniform implementation, facilitate understanding of whistleblowing, as well as to support whistleblowers.

A whistleblower’s report must include the information available to the informant, along with a description of the violation detailing the particular facts, as well as information about the natural persons or legal entities involved in the violation. In addition, the whistleblower must indicate whether the information about the violation was obtained while at work and whether the violation has been reported previously.
Protection of whistleblowers

As from the moment when a whistleblower reports in line with the law, they and their relatives are under specific protection. This includes the right to identity protection, the right to release from legal responsibility, the right to corresponding compensation for losses or personal damage (including moral damage), the right to assistance during litigation, as well as the right to protection against adverse consequences caused due to whistleblowing.

The obligation to protect a whistleblower’s identity is especially important. The applicant’s personal data must be immediately pseudonymised, and they can be transferred only to those parties (institutions) who require them to investigate the whistleblower’s report or a case initiated on the basis of the report, or to ensure the whistleblower’s rights. The obligation to protect personal data must be observed especially carefully: if the whistleblower’s identity is disclosed, there is a huge risk of causing adverse consequences. However, protection is also ensured on the other side: within the scope of the presumption of innocence, the identity of someone named in a whistleblowing report must also be protected.

If adverse consequences are caused to a whistleblower or any of their relatives after submission of a report ‒ for example, the person is fired or subjected to mobbing ‒ the employer will be held administratively liable. Although a legal norm regulating this liability has not yet been adopted, the transitional provisions of the Whistleblowing Law provide for it by referring to amendments to the Latvian Administrative Violations Code.

Action plan

To prepare for the law coming into force, a company should assess whether the obligation to establish an internal whistleblowing system applies to it and whether it wants to establish the system voluntarily. It is important to understand that a defective or non-existent whistleblowing system contradicts the company’s interests. For example, if the whistleblowing mechanisms cannot be used in the specific case or the reported violation is not eliminated within a reasonable period of time without an objective reason for such delay, whistleblower can provide this information to the public ‒ this would be publicity that could threaten the company’s reputation.

In order to establish an internal whistleblowing system the company needs to appoint the person responsible for the evaluation of reports and to ensure a safe option for submitting the reports. We recommend preparing internal whistleblowing guidelines, indicating what issues the whistleblowers can submit their reports about and how it should be done (this could include a specially designated form) as well as how the report would be processed and how long this would take. The deadline for reacting to the report should not exceed one week. This document would be useful both for potential whistleblowers and for report reviewers; moreover, availability of the document in the workplace would ensure compliance with the obligation to inform employees.

After the formal establishment of the system, the company must insure a proper internal revision of the reports, including appropriate protection of whistleblowers’ identity. All actions should be based on protection of a whistleblower’s identity and his other rights, as well as objective investigation of the issue. However, the most important goal is to facilitate the company's internal culture, allowing employees to understand that whistleblowing should not be a cause for fear. Whistleblowers should not be condemned, but supported, and this activity is in the interests of both the employee and the entire company, as well as the public.

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