EU Whistleblowing Directive - Netherlands

Existing whistleblower protection

The Netherlands was among the nine EU Member States which the EU Commission considered already had comprehensive whistleblower protection. This protection is currently set out in The House for Whistleblowers Act (the "Act") (Wet Huis voor klokkenluiders). Nonetheless, it will still need to introduce some changes to comply with the Directive.

Current implementation status

The House for Whistleblowers Act (the “Act”) (Wet Huis voor klokkenluiders) needed to be amended in order to implement the Directive in Dutch law. The Act was renamed Whistleblower Protection Act (Wet Bescherming Klokkenluiders). The legislative proposal was submitted to the House of Representatives on 1 June 2021 (the “Bill”) and was passed by the Senate on 24 January 2023 and entered into force on 18 February 2023. This means that now the local legislation applies to organisations with more than 249 employees. There are a few exceptions, such as those concerning the sanctioning abilities of the House of Whistleblowers (the Dutch Whistleblowers’ Authority) and the possibility to report anonymously, which will take effect at a later date.

Compliance dates by size of entity are:

• Organisations with more than 249 employees and organisations with less than 50 employees qualifying as an obliged entity under the Anti-Money Laundering Directive: The compliance date remains uncertain.
• Organisations with 50-249 employees: 17 December 2023.

Although the implementation deadline has not been met, the provisions of the Directive do apply to employers in the public sector as of 17 December 2021, as the Directive has direct effect on public-sector employers after passing of the implementation deadline. To employers in the private sector, the Directive will only apply after implementation in national law.

Employers must establish an internal reporting policy and reporting channel (if not already in place).
The internal reporting policy should, among others, include the officials to whom reports can be made, in what manner reports can be made (in written form, but also via telephone or other voice messaging system and in person), the strict deadline of respond, when there is a wrongdoing and who may make a report.

In addition, the internal reporting policy may not include wording prohibiting direct external reporting.

The investigation department of the House of Whistleblowers (the Dutch authority with respect to whistleblowers) may impose a fine or penalty on the employer if the employer fails to comply with the obligations regarding the establishment of the internal reporting channel and the requirements it must meet, fails to follow recommendations of the investigation department of the House of Whistleblowers or if the employer retaliates against the employee or other person/entity protected under the Act as a result of a report made by the employee.

On 18 April 2023, the Committee on Interior Affairs and High Institutions of the State/ General Affairs and House of the King (part of the Senate, and hereafter the “Committee”) submitted a letter with additional questions to the Minister of the Interior and Kingdom Relations regarding the new whistleblowing law. From this letter, it appears that certain issues remain unclear to the Committee. For employers, the most important question is whether the role of a confidential advisor could be combined with the role of independent reporting channel, since the two roles represent conflicting interests and are therefore incompatible, according to the Committee. According to the Minister, two roles can in fact be combined since the confidential counsellor merely acts as an intermediary between the reporter and the independent investigator and informs the reporter of the different possibilities. The confidential counsellor cannot follow up on a report themselves and is therefore independent in their role.

On 6 July 2023, the (outgoing) Minister of the Interior and Kingdom Relations submitted a letter to the House of Representatives providing an update on the current state of affairs. The Minister indicated that they aim to have a general order, which will include the additional rules for anonymous reporting, finalised following the summer break. It is expected that this general order will enter into force mid-2024.

On 13 September 2023, a debate between the Minister and the members of the House of Representatives took place. The main topics discussed during the debate that are important for employers, are:

• The State Secretary anticipates presenting a new bill for the implementations of sanctions and the monitoring role of the House of Whistleblowers by mid-2024. The State Secretary has expressed the intention of exploring options for funding this system through contributions from employers. The precise approach for this funding will be further elaborated upon in the near future.

• A fund has been created to ensure the provision of support to whistleblowers in the process they go through when raising particular concerns. This fund is currently operational, offering both psychosocial support and legal help. The House of Whistleblowers will most likely play a role in this. It will indicate whether it does indeed have the impression that there is wrongdoing or alleged wrongdoing, after which the provision of support can be used by the employee.

On 20 December 2023, the State Secretary informed the House of Representatives on the current state of affairs regarding the matter of whistleblowing. The most important updates from the State Secretary were:

• The expected entry into effect of an aid scheme for the granting of legal aid and mediation (in the event of a suspected wrongdoing) is 1 February 2024. On the basis of this aid scheme, (potential) reporters of wrongdoings who get into conflict with their employer after reporting may, subject to certain conditions, qualify for support from a lawyer or a mediator. There is an intention of exploring options for (partly) funding this system through contributions from employers, we still await further elaboration on this point.

• The preparation of a legislative proposal aimed at an amendment of the Whistleblowers Protection Act. The consultation period for the legislative proposal is still expected to start in the first half of 2024.

The preparation of a general administrative order (AMvB) that shall provide for further regulation on anonymous reporting. The order is expected to be presented for consultation within a number of weeks.

We are seeing a range of approaches by reference to 'wait and see' or pro-active implementation, the predominate trends are 'wait and see' where, as applicable, companies are applying global whistleblowing policies without adaptation or pro-actively implementing the core requirements under the Directive even though the local position is unclear.

It should be noted that as a result of the failure to meet the implementation deadline of 17 December 2021, the Netherlands received a letter of formal notice from the European Commission. The letter of formal notice was the start of the official infringement procedure. The Netherlands responded to this letter and the European Commission issued a ‘reasoned opinion’ concluding that the Netherlands has not taken all measures necessary to ensure full transposition of the Directive and that the pending legislative process does not justify the delay. The implementation deadline of 17 December 2021 was missed. The European Commission had to decide ultimately by mid-November 2022 whether or not to initiate an infringement procedure at the European Court. As these proceedings are confidential, it has not been made public whether or not any proceedings were initiated.

Is the scope of the Act in line with the scope of the Directive?

Yes. In addition, the Act also offers protection when reporting the event of a suspected act or omission whereby the public interest is at stake in the violation of a statutory provision, a danger to the safety of persons, a danger to the deterioration of the environment, a danger to the proper functioning of the public service or an enterprise as a result of an improper act or omission, not being a breach of Union law (“infringements under/suspected wrongdoing under national law”).

The protection for reporters of suspected wrongdoing under national law and reporters of information about a breach of Union law are put on an equal footing under the Bill.

In two respects, the Act chooses not to apply the provisions of the directive to (reporters of) infringements under national law.

(i) Firstly, this applies to the requirements for external reporting channels; under the Act, these do differ:

In the Netherlands the following competent authorities will be designated in relation to establishing external reporting channels: the Netherlands Authority for Consumers and Markets (ACM), the Netherlands Authority for the Financial Markets (AFM), the Netherlands Data Protection Authority (AP), the Dutch Central Bank (De Nederlandsche Bank N.V.), the House for Whistleblowers, the Inspectorate for Health and Youth Care (IGJ) and the Dutch Healthcare Authority (NZa).

The statutory requirements for the external reporting channel only apply to reports on an infringement of Union law and not when it concerns an infringement under national law (as defined above). Suspicions of wrongdoing under national law may be reported externally and end up with a supervisor or inspection that has not been designated as a competent authority. However, also in these cases, the identity of the reporter must be kept secret and personal data of all persons involved must be handled confidentially. For organisations that receive work-related reports of suspected wrongdoing, it applies that they must make known within which period the reporter will be informed about the progress of the investigation and any follow-up report.

(ii) Secondly, on the basis of the directive, reporters of a breach of Union law can also make a report if the breach is 'reasonably likely' to occur. However, this protection is not extended to reporters of 'probable' wrongdoing under national law. The government considers such an extension contrary to legal certainty.

Finally, and as mentioned above, the Directive not only allows for reporting of infringements of Union law that have taken place, but also reports that are 'very likely' to take place. This expansion is limited to the extent that the legislative proposal provides that a breach of Union law 'of minor importance' need not be addressed; in such cases the competent authority 'may' decide that no further action is taken on a notification.

How does the Directive differ to the Dutch regime?

The legislative proposal includes (amongst others) the following key changes:

• In our view, the most important and far-reaching change is that reporters will be given the opportunity to report directly externally (outside their own organisation). At the moment, there is still the obligation to report internally first. An external report can be made to a 'competent authority' designated in the Act. A reporter may also make a report public in certain circumstances, for instance through the press. These changes mean that whistleblowers can make a report of wrongdoing outside the organisation without the organisation being aware of it itself. If the external 'competent authority' subsequently makes a mistake in the reporting procedure, the whistleblower has the right to make the abuse public.

• The Act shifts the burden of proof: The employer will have to prove that the disadvantage suffered by the reporter is unrelated to the report. According to the current law, the reporter themself must prove that they have been disadvantaged because of the report.

• The Act also provides for several protection and support measures in order to protect the reporting persons against retaliation such as dismissal, suspension, transfer, or harassment. The prohibition on detriment includes any form of detriment against a reporting person, including threats of and attempts to do so. Furthermore, the burden of proof no longer lies with the reporting person, but with the employer that has imposed the detrimental measure, which must in turn demonstrate that the detriment sustained by the reporting person is not a result of their report (reversal of the burden of proof). Other measures are in respect of compensation of reporting persons in respect of legal proceedings and competent authority providing reporting persons with evidence and documents.

• The Act currently only provides protection for (former) employees and public servants and as mentioned. This protection will be extended to the broader circle of natural persons and legal entities as referred to in the Directive (e.g. self-employed persons, shareholders, board members, facilitators, interns, or even third parties closely associated with a reporter such as colleagues or family members). In the explanatory memorandum to the legislative proposal, it is specified that this also includes confidential advisors and trade union representatives.