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By Marcus Hoy
April 15—A new law designed to better enable Dutch employees to report workplace misconduct will benefit both employees and employers, an official at the nation's largest employers' organization tells Bloomberg BNA.
The Netherlands's Corporate Governance Code already requires stock market-listed corporations to implement whistleblower-enabling policies. The new law will extend such obligations to all Dutch companies with 50 employees or more. Listed corporations will also be covered by the act and required to ensure their policies comply with both the CGC and the new law.
In an April 13 statement, Mario van Mierlo, social affairs policy adviser at the Confederation of Netherlands Industry and Employers, said that an earlier version of the new Whistleblowers Institute Act (34 105) had failed to gain parliamentary approval due to objections from employers' groups. The new law was approved by parliament March 1 and is due to take effect July 1.
Under the new rules, affected companies will be obliged to formulate policies allowing employees to report workplace breaches such as unsafe conditions or corruption. While companies will be allowed some flexibility in the wording of their policies, they must all offer a description of the internal mechanisms that allow alleged breaches to be reported. Policies should determine how reporting is handled internally and detail who the breach should be reported to.
All employers will be required to handle reports confidentially if asked to do so and allow the employee the opportunity to receive advice in confidence. Employers will also be under an obligation to provide information to the employee on how a suspicion of wrongdoing may be reported externally. Each company's whistleblower policy must receive approval from the company's works council. Employers will not be permitted to take retaliatory action against any employee who alleges misconduct.
While an independent Whistleblowers' Advice Center already exists in the Netherlands, the new law requires a Whistleblowers' Institute to be established with the power to investigate cases and to provide legal protections for whistleblowers. As a general rule, employees will not be allowed to file complaints with the Whistleblowers' Institute if they have not already filed an internal complaint, though exceptions to this rule can apply.
The institute's investigatory branch will rule on whether a complaint merits investigation and, if so, conduct the investigation and compile a report. While the report's recommendations will be nonbinding, they may potentially trigger criminal enforcement if not adhered to. Any published report will anonymize the names of the parties involved.
In his opinion, van Mierlo said, confidentiality would be a key factor in the implementation of the new law.
“Whistleblowers have traditionally not fared well in the Netherlands,” he said. “There have been many cases in which employees have lost their jobs after bringing up cases of perceived misconduct. This has not been in the interest of companies in both the public and private sector. It is in companies' interest that employees are able to raise concerns about perceived misconduct while protected by the law.”
“Whistleblowers will initially be obliged to raise their concerns within their organization,” van Mierlo said. “Caution and confidentiality will be leading principles here, and this will also be important in relation to communication with the media. A lack of care with the information might seriously damage a company.”
The two main functions of the Whistleblowers Institute—investigating cases and providing legal protections for whistleblowers—should be kept distinct from each other, van Mierlo said.
“It is essential that these two departments remain separate,” he said. “The whistleblower has to maintain the integrity of his own case. The department has to keep the information provided by the whistleblower confidential and will not be allowed to share this information with the other department or to make the information public.”
The original 2014 legal proposal that placed the institute under the umbrella of the National Ombudsman was withdrawn following objections from employers' organizations, van Mierlo said. Under the new law, the Ombudsman will rule on disputes between the government and citizens but will not intervene in disputes between individuals and private companies.
In an April 12 statement provided to Bloomberg BNA, Menno Weij, attorney at the Amsterdam-based Solv legal firm, agreed that the law would bring positive benefits to both employers and employees.
“This law contributes to the legal protection of whistleblowers by ensuring that an employee who acts in good faith is not disadvantaged in his legal status for reporting a potential breach,” Weij said. “This is a positive step forward. According to the information provided by the Advice Center for Whistleblowers, many cases have been observed in which employees who uncovered breaches got into trouble because they exposed the breaches in the media. This new law improves employees' opportunities to report wrongdoing and also improves their protections.”
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