Client Alert
New Croatian Whistleblowing Act
A new Whistleblowing Act (‘the Act’) implementing the Directive on the Protection of Persons who Report Breaches of Union Law (Directive (EU) 2019/1937) (‘the Whistleblowing Directive’), came into force in Croatia on 23 April 2022. The new legal framework replaces the existing one which has been in force since 2019.
Main protection mechanisms for whistleblowers generally remain unchanged
Three general reporting mechanisms remain unchanged, and they include:
- Internal reporting (within the company) in accordance with the procedure set out under the internal bylaw;
- External reporting (to the Ombudsman); and
- Public disclosure.
However, the Act introduces a few novelties, such as – the whistleblowers may report the irregularity to the Ombudsman without previously using the mechanism of internal reporting.
New obligations and procedures in relation to internal reporting mechanism
Companies employing more than 50 employees should introduce internal reporting (as under the previous legal framework).
Additionally, companies in certain sectors (e.g. financial services, AML etc.) have the same obligation irrespective of the number of employees.
Compliance with the general standards of protection of whistleblowers is considered as best practice, even for companies that have no mandatory compliance obligation.
The report of irregularities may now be filed in several ways:
- verbally – by telephone, other voice messaging systems or via a meeting; or
- in writing – any form of communication which leaves a written record (e.g. through online mechanism).
The companies that must comply with the Act should (i) adopt a new internal bylaw before 23 June 2022, and (ii) appoint a confidential person (i.e. a person trusted to receive the reports of irregularities, among other duties) together with a deputy before 23 July 2022. Even if the companies were compliant with the legal framework that was previously in place, nevertheless new implementation deadlines should be respected.
In case of non-compliance with the Act, fines of up to HRK 50,000 (approx. EUR 6,600) for a company and HRK 30,000 (approx. EUR 4,000) for the responsible individual may be triggered.
Novelties in relation to the appointment and duties of the confidential person
The main roles of the confidential person remain the same and consist of the obligation to (i) receive the reports of irregularities from whistleblowers, (ii) communicate with whistleblowers and (iii) conduct the proceedings in relation to the protection of the whistleblowers. Additionally, the confidential person should keep a record of every report received.
Important novelty is that the confidential person may also be an external individual (e.g. a lawyer). Legal entities cannot act as confidential persons.
As under the previous legal framework, a confidential person is appointed by the company based on the proposal of 20% of the employees. However, under the Act, a works council or a trade union commissioner active within the company may also submit a proposal for the appointment of a confidential person. If the company received no proposal for appointment, it should independently appoint the confidential person.
Broader protection
Retaliatory protection for whistleblowers has been expanded to include not only the whistleblower themselves, but also related persons (e.g. assistants, relatives of the whistleblower, etc.), the confidential person or their deputy.
Threats of retaliation and attempts of retaliation by the company are also prohibited.
Identity of the persons who are reported by whistleblowers and other data included in the report are protected and are available only to confidential persons (unless the person agrees to the disclosure of such information).
If you would like to know…
- how to draft internal bylaws or update them in compliance with the new Act;
- what the company’s obligations are in case a report of irregularities is filed;
- how to implement a secure whistleblowing system for your company or need more information about our whistleblowing software designed for companies – SecuReveal; or
- have any other questions in relation to the new Act…
