New Protection for Whistleblowers under Financial Law
18/10/2017

Until recently, persons blowing the whistle on breaches of financial legislation were not protected under Belgian law. Consequently, the decision to report a breach often left the whistleblower unemployed. After all, no one likes a tattletale.

The Act of 31 July 2017[1] remedies this situation by introducing protection for persons who inform the Belgian financial regulator (the Financial Services and Markets Authority or "FSMA") of breaches of financial legislation.[2]/[3]The new act states general principles for the protection of whistleblowers,[4] while it is up to the FSMA to elaborate these rules and convert them into a regulation. It is specifically stated that the rules are of mandatory application, meaning they cannot be waived in advance (for example in a service agreement or employment contract).  Please find below a brief overview of the main principles.

When a person reports a breach of financial legislation to the FSMA, the FSMA guarantees the informant's anonymity. Unless the whistleblower agrees, his or her identity will not be disclosed. The FSMA can however confirm that a person is a whistleblower in a dispute between the whistleblower and his or her employer. Anonymity helps to ensure that whistleblowers avoid possible sanctions or harassment at work. The downside is that it may encourage baseless reporting.

In addition to anonymity, a person who reports a breach in good faith is also protected from civil, criminal and disciplinary claims. Professional sanctions against whistleblowers cannot be imposed either. Accordingly, a whistleblower cannot be held liable in any way for the disclosure in good faith of information to the FSMA. It should be noted that such protection is not limited to employees who provide the FSMA with information about their employer and extends to persons acting in other capacities as well, such as employees of a group company and self-employed service providers and their employees. However, only people acting in good faith are protected. It may be difficult to determine whether a person is indeed acting in good faith. In practice, such a determination will often be made by a court. It is expected that, in the absence of clear evidence to the contrary, the courts will be inclined to give whistleblowers the benefit of the doubt.

Special protection is available for employees, based on the rules governing claims for discrimination, assault, and moral or sexual harassment at work. The basic rule is that any form of retaliation, discrimination or other type of unfair or unfavourable treatment in connection with a notification in good faith by an employee is prohibited. The employer bears the burden of proof in this regard. This means that when an employee claims that a certain action can be attributed to the fact that he or she was a whistleblower (or that the employer suspected the employee of being a whistleblower), the employer must prove that the action in question is unrelated to the whistleblowing. It is obvious that meeting this burden of proof will be extremely difficult. On the other hand, whistleblowers are only protected for a period of twelve months from the time of the notification or, if proceedings are brought during this period, until the court renders a final decision. In practice, this means that employers will not be inclined to dismiss whistleblowers during the aforementioned twelve-month period. Furthermore, the protection continues even after the end of employment. This is intended to prevent retaliatory actions after the end of the employment relationship, such as when the employer refuses to write a recommendation letter or a fixed-term employment contract is not renewed due to whistleblowing.

If a whistleblower is dismissed or the employer unilaterally modifies his or her employment conditions, the whistleblower can claim damages or request reinstatement (to his or her original position with arrears of salary). With regard to damages, the employee can opt to either prove his or her actual damage or claim a fixed amount equal to his or her gross remuneration for six months.

In conclusion, the suggestion of the Market Abuse Regulation and of certain members of parliament to adopt a specific royal decree providing financial incentives for whistleblowers was not followed, despite the findings of the parliamentary committee of inquiry set up to investigate the bankruptcy of Optima Bank. The committee's investigation revealed that the independence of the compliance officer could have been improved had there been a financial incentive to report breaches that later turned out to be true. For the time being, it appears that the legislature is not prepared to adopt such a far-reaching measure.

 

[1] Act of 31 July 2017 amending the Act of 2 August 2002 on the supervision of the financial sector and financial services, in order to implement Regulation (EU) No 596/2014 on market abuse and transpose Directive 2014/57/EU on criminal sanctions for market abuse and implementing Directive (EU) 2015/2392 on reporting to competent authorities of actual or potential infringements.

[2] For a list of the relevant rules, see Article 45 of the Act of 2 August 2002.

[3] The Act of 31 July 2017 entered into force on 21 August 2017.

[4] Article 69bis of the Act of 2 August 2002.

Voir aussi : NautaDutilh ( Mrs. Elke Janssens )


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