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34.9 Whistleblower Protections

Overview​

Whistleblower protections encourage employees and others to report fraud, misconduct, or violations without fear of retaliation. Understanding whistleblower protections helps businesses establish effective reporting mechanisms and comply with legal requirements.

Whistleblower Definition​

What is a Whistleblower?​

Whistleblower:

  • Person who reports fraud, misconduct, or violations
  • Reports internally or externally
  • Acts in good faith
  • Reports genuine concerns
  • Protected from retaliation

Types of Reports​

Report Types:

  • Internal reports: Reports to management
  • External reports: Reports to authorities
  • Anonymous reports: Reports without identity
  • Named reports: Reports with identity
  • Protected disclosures: Legally protected reports

EU Whistleblower Directive​

EU Directive 2019/1937:

  • Establishes minimum standards for whistleblower protection
  • Applies to certain sectors and companies
  • Requires internal reporting channels
  • Protects whistleblowers from retaliation
  • Requires investigation of reports

Luxembourg Implementation​

Luxembourg Implementation:

  • Transposed EU directive into national law
  • Applies to companies with 50+ employees (as of 2025)
  • Smaller companies may have reduced requirements
  • Protections apply to whistleblowers
  • Reporting channels required

Internal Reporting Channels​

Establishing Channels​

Internal Channels:

  • Designated person or department
  • Reporting procedures
  • Confidential reporting
  • Anonymous reporting option
  • Response procedures

Channel Features​

Features:

  • Accessible to all employees
  • Confidential and secure
  • Anonymous option
  • Clear procedures
  • Response commitments

Protection from Retaliation​

Prohibited Retaliation​

Prohibited Actions:

  • Dismissal or termination
  • Demotion or disciplinary action
  • Harassment or intimidation
  • Discrimination
  • Other adverse actions

Protection Scope​

Protected Whistleblowers:

  • Employees
  • Former employees
  • Contractors
  • Suppliers
  • Others with relevant information

Investigation Procedures​

Report Investigation​

Investigation Process:

  1. Receive report
  2. Acknowledge receipt
  3. Assess report
  4. Investigate if warranted
  5. Take appropriate action
  6. Provide feedback (if possible)
  7. Document process

Confidentiality​

Confidentiality:

  • Protect whistleblower identity
  • Limit access to information
  • Maintain confidentiality
  • Only disclose when necessary
  • Protect from retaliation

Luxembourg Compliance Note​

Legal Requirements:

  • Reporting channels: Required for companies 50+ employees
  • Protection: Whistleblowers protected from retaliation
  • Investigation: Reports must be investigated
  • Documentation: Process must be documented
  • Compliance: Must comply with legal requirements

Best Practices:

  • Establish channels: Even if not legally required
  • Promote reporting: Encourage reporting
  • Protect whistleblowers: Ensure no retaliation
  • Investigate reports: Take reports seriously
  • Improve controls: Use reports to improve controls

Think It Through​

TechLux Solutions has 60 employees. What whistleblower protections must they provide? How should they establish reporting channels?

Concepts in Practice​

Whistleblower Protection Example

TechLux Solutions whistleblower program:

Reporting Channels:

  • Designated compliance officer
  • Email reporting channel
  • Anonymous reporting option
  • Clear reporting procedures
  • Accessible to all employees

Protection:

  • Policy prohibits retaliation
  • Training on protection
  • Monitoring for retaliation
  • Disciplinary action for retaliation
  • Support for whistleblowers

Investigation:

  • All reports investigated
  • Confidential investigation
  • Appropriate action taken
  • Feedback provided (when possible)
  • Documentation maintained

Result: Effective whistleblower program, protected reporting, fraud detection improved, ethical culture promoted.