On March 13, 2023, Law 2/2023 of February 20, regulating the protection of persons who report regulatory violations and the fight against corruption, entered into force. It transposes Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019, and is known as the Whistleblowing Directive.
The law defines whistleblowing as the act of informing an authority or the public of unlawful or unethical conduct taking place in an organization.
The purpose of this regulation is to protect and encourage the reporting of irregularities or unlawful conduct occurring in the business and organizational environment. This law establishes a legal framework to protect employees, suppliers, customers and other individuals who report in good faith illegal actions, fraud, corruption, discrimination and other crimes within an organization.
First, the law establishes that all companies with more than 50 workers must implement an internal whistleblower channel. This channel must be accessible and visible to all employees and must allow anonymous and confidential reporting. In addition, the channel is required to be managed by a person or entity independent of the company.
One of the most important aspects of the law is the protection provided to whistleblowers. It is established that no employee may be sanctioned, dismissed or discriminated against for making an internal complaint. In addition, it establishes the obligation of companies to protect whistleblowers and maintain the confidentiality of their identity.
In the event of retaliation against the whistleblower, the law contemplates the possibility that the affected worker may resort to the courts to claim compensation for damages.
In accordance with the provisions of the Law, the following are considered retaliation: (a) suspension of the employment contract, (b) dismissal or termination of the employment relationship (including non-renewal or early termination of a temporary employment contract after the probationary period has expired), (c) imposition of any disciplinary measure, (d) demotion or denial of promotion, (e) Substantial modification of working conditions, and (f) the non-conversion of a temporary employment contract into a permanent one, in case the worker had legitimate expectations that he/she would be offered a permanent job, among others.
Another noteworthy aspect of the law is the obligation of companies to implement effective risk prevention, detection and management measures in the area of ethics and legality. The regulation establishes that companies must implement policies and programs to prevent and detect unlawful conduct, and to manage the complaints received.
The law also establishes the obligation of companies to diligently, effectively and impartially investigate complaints received and to inform complainants of the actions taken.
The law establishes penalties for those who fail to comply with its provisions. Penalties may include fines, suspension or cancellation of business licenses and other measures that may be appropriate depending on the seriousness of the violation. And failure to comply with the obligation to have an internal information system in place shall be considered a very serious infringement.
The law also provides for the creation of a public registry of companies that have implemented the internal complaints channel. This registry will be in charge of the Ministry of Labor and will serve as a mechanism for transparency and social control over the companies.
It should be noted that the maximum period for the implementation of the internal information systems is three months from the entry into force of the law, which will be twenty days after its publication in the Official State Gazette.
Although exceptionally, in the case of private sector legal entities with 249 or fewer employees, the deadline is extended to December 1, 2023.
In short, Law 2/2023 constitutes an important measure to promote transparency, ethics and legality, as well as the culture of ethics and regulatory compliance in the business and organizational environment, establishing protection and collaboration mechanisms in case of internal complaints, seeking to ensure the protection of bona fide whistleblowers.
