Sweden: Whistleblowing Law Now in Effect

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By Marcus Hoy

Implementation of provisions of the whistleblowing law effective Jan. 1 could be “time- and cost-consuming,” and not all companies are likely to be fully compliant. While no figures on the extent of compliance are available, Bjorn Rustare of the Roschier legal firm told Bloomberg BNA March 2 that some companies could face difficulties in setting up the required internal mechanisms.

“Naturally, the main challenge for employers has been to set up compliant whistleblower mechanisms,” Rustare said. “Once these are in place, the task of strengthening the system in favor of the employee is unlikely to be difficult or costly.”

Targeting ‘Serious Breaches'

Aimed at increasing protections for whistleblowers, the Swedish Whistleblowing Act (2016:749) requires employers to establish mechanisms allowing employees to report serious workplace breaches internally or through a trade union without fear of reprisal. Any form of retaliation against employees who report serious wrongdoing is outlawed, and employees have a new right to sue for damages if they believe they have been subject to illegal retaliation.

The law defines “serious workplace breaches” as those that may result in a prison sentence or other breaches of a “similarly serious nature.” All companies are covered by the new law, regardless of size, and employment contracts that contravene the law will be deemed invalid. Before the law's enactment, Sweden had no specific workplace whistleblowing legislation in place, and many companies had no internal mechanisms to facilitate whistleblowing.

“Since implementing a whistleblower system may be both costly and time-consuming, it can easily be concluded that some small and medium-sized companies are not yet in full compliance,” Rustare said. “In practice, no court case could reasonably have been filed during the short period of time since the legislation was adopted and we have not yet received any information from our clients on this issue. We are likely to get a more detailed idea of their adherence later this year.”

Contradictory Laws?

Some confusion could result from the application of the Swedish Data Protection Authority’s instructions for processing personal data in whistleblowing systems, Rustare added, which were issued in 2010 and thus predate the new law.

“The DPA states that only personal data related to persons in key positions where serious improprieties are alleged concerning accounting, auditing, bribery or banking and financial crime are to be handled in a company's whistleblower system,” Rustare said. “Thus it remains unclear how companies should handle other whistleblowing matters in a way that does not interfere with the Swedish Personal Data Act. It could be that this ambiguity might deter some companies from launching their whistleblower systems.”

To contact the reporter on this story: Marcus Hoy in Copenhagen at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

Full text of the Whistleblowing Act is available in Swedish here.

For more information on Swedish HR law and regulation, see the Sweden primer.

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