The upcoming amendments to the Act, which implements the provisions of Directive (EU) 2019/1937, will further define the subject and scope of whistleblowing, enhance protections for whistleblowers, and refine the procedure for handling whistleblower reports.
The Bulgarian Whistleblower Protection Act, in effect in 2024 for all employers with more than 50 employees, aims to protect individuals who report suspected violations of laws, regulations, or other legal requirements within organizations. The Act, which transposes the requirements of Directive (EU) 2019/1937, defines both the subject and the scope of whistleblowing, provides important protections for whistleblowers, as well as a procedure for handling whistleblower reports.
To summarize the scope of the Act, all employers with more than 50 employees (and all employers, regardless of the number of their employees, in the financial and insurance sector, certain entities designated as operating in the public interest, obligated persons under the Act on Measures Against Money Laundering etc.) are under obligation to:
· establish an internal reporting channel for whistleblowers;
· introduce rules for internal reporting and follow-up on the reports received, subject to regular review and update (at least once every three years);
· designate at least one person or unit from within or without the organization, who is tasked with handling reports;
· provide clear and accessible information to the staff of the company;
· fulfill various other recording and reporting tasks;
It is important to note that the Bulgarian Whistleblower Protection Act extends the breaches that the whistleblowers may report significantly farther than the EU Directive, by including labor law violations and general crime within its protection scope. In practical terms, this means that the employers will need to be on constant alert, as labor regulation is particularly easy to violate even unconsciously. International companies that choose to replicate their existing rules from other EU jurisdictions (where whistleblower protection has long been established) will need to be especially cognizant of that fact.
The key provision of the Act is protection from retaliation. Whistleblowers who report suspected violations are entitled to protection from retaliation, including dismissal, demotion, harassment, or any other negative action taken by an employer in response to a whistleblower's report. The protection measures also apply to facilitators, third persons who are connected with the reporting persons, such as colleagues or relatives, and legal entities that the reporting persons own, work for or are otherwise connected with in a work-related context. Employers who engage in retaliation may face fines. In addition, they will be liable for compensating the whistleblower for any material and non-material damages suffered. The burden of proof that the damages were not caused as a result of the whistleblowing will be on the employer.
The Act establishes a procedure for handling whistleblower reports. When a whistleblower reports suspected violations internally, the employer must respond within a specified timeframe and take appropriate action to address the issue, for which a record must be taken. Should the whistleblower decide to go outside the organization, the responsible state organization – the Personal Data Protection Commission – will act as a ‘mailbox’, transmitting the reports to the competent authorities for appropriate actions.
While the Act provides important protections for whistleblowers, it does not allow for anonymous reports. However, it does require employers and authorities to keep the identity of the whistleblower confidential and protect them from retaliation. Here, among other services, is where Penev LLP can be of assistance:
Our team has broad and successful experience in compliance matters, including Personal Data Protection and Anti-money Laundering regulations. We stand ready to assist in:
· drafting and/or reviewing the internal rules and regulations for whistleblowing protection, including bringing rules from other jurisdictions in compliance with Bulgarian regulation;
· establishing and evaluating the internal whistleblowing reporting channel(s), as well as administering it;
· serve as the unit tasked with handling reports, since the easiest way to ensure the identity of the whistleblower will remain confidential is for the handling unit to remain outside the organization, especially when handled by attorneys with duty of confidentiality;
· record and/or transmit to the relevant authorities all reports received under the act, as well as provide appropriate feedback (as required under the Act) to the report-maker about the measures undertaken as a result of their report.
Overall, the Bulgarian Whistleblower Protection Act provides important protections to individuals who report suspected breaches of regulations within organizations. By protecting whistleblowers from retaliation, the Act promotes transparency, accountability, and ethical behavior in Bulgarian public and private entities. However, the Act has some limitations.
The requirement for whistleblowers to provide their identity may discourage some individuals from coming forward with information, particularly if they fear reprisals from their employer or colleagues. In addition, the Act does not provide for specific training for company or government officials, which may limit its effectiveness. However, it is prudent to bring a business of any size in compliance as soon as possible, since in the present times of political uncertainty, Bulgarian regulations can suddenly loom large. Should you have any questions or need assistance, please do not hesitate to contact Penev LLP.
