The new legislation on the protection of persons who report and disclose in public breaches of European and Bulgarian law

The Act on the Protection of persons who report and disclose in public breaches (hereinafter referred to as the “Whistleblowing Act”) was promulgated in the Official Gazette No. 11 of 02.02.2023. The Whistleblowing Act implements at a national level the requirements of Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law („Whistleblowing Directive“). The adoption of the Whistleblowing Act is also a part of Bulgaria’s Recovery and Resilience Plan.

The Whistleblowing Actaims to ensure the protection of persons in the public and private sectors and persons related to them who report or publicly disclose information about breaches of Bulgarian law or the European Union acts („whistleblowers“), which have come to their knowledge in the course of, or, in connection with the performance of their working or official duties, or another work-related context.

Scope of the Whistleblowing Act

The scope of the Whistleblowing Act is broad and encompass reports or public disclosure of information on breaches of Bulgarian legislation and/or a wide range of EU acts in a number of areas of significant public interest, such as:

• public procurement;
• financial services, products and markets, and prevention of money laundering and terrorist financing;
• product safety and compliance;
• transport safety;
  
• protection of the environment;
• radiation protection and nuclear safety;
• food and feed safety, animal health and welfare;
• public health;
• consumer protection;
• protection of privacy and personal data;
• security of network and information systems.

Also, in the scope of the Whistleblowing Act are included breaches affecting the financial interests of the Union and the internal market as referred in the Treaty of Functioning of EU, including the breaches of competition and state aid rules, as well as breaches of the rules of corporate tax or to arrangements the purpose of which is to obtain a tax advantage that defeats the object or purpose of the applicable corporate tax law.

The Whistleblowing Act shall apply towards reports and public disclosure of information for breaches of Bulgarian legislation in the area of:

• payment of due public state and municipal claims;
• labour law;
• civil servant legislation.

Protected persons

A wide range of persons is protected under the Whistleblowing Act, aiming to stimulate whistleblowing and public disclosure of information about breaches of European and national law that threaten or harm the public interest and European Union law.

Under the conditions and procedures set out in the Whistleblowing Act could be protected whistleblowers who file a report or publicly disclose information about a breach that became known to them in their capacity as:

• worker, employee, civil servant or other person who performs labor, regardless of the nature of the work, the method of payment and the source of financing;
• a person who works without an employment relationship and/or as freelancer and/or as craftsman;
• volunteer or intern;
• partner, shareholder, sole owner of the capital, member of a management or control body of a commercial company, member of the audit committee of an enterprise;
• a person who works for a natural or legal person, its subcontractors or suppliers;
• a job applicant who participated in a competitive examination or other form of selection for employment and in this capacity has received information about a breach;
• a worker or an employee, when the information was received within an employment or service relationship that was terminated at the time of the submission of the report or the public disclosure of the information about breaches.

Protected under the Whistleblowing Act are also the following persons and entities:

• any other whistleblower who reports a breach that became known to him in a work-related context;
• persons who assist the whistleblower in the reporting process;
• individuals who are related to the whistleblower and who may be subject to retaliation because of the whistleblower;
• legal entities in which the whistleblower owns shares, works for, or is otherwise associated with in a work – related context.

Measures to protect whistleblowers

The Whistleblowing Act introduces several groups of measures for the protection of the persons who fall under its scope, including the right to compensation for material and non-material damages, support measures in legal or other proceedings, exemption from legal responsibility in certain cases and under conditions expressly defined in the Whistleblowing Act, the confidentiality of the whistleblowers’ identity, etc.

It is important for employers that are obliged to implement the Whistleblowing Act to note that the act prohibits any form of retaliatory action against persons entitled to protection that is repressive in nature and puts them at a disadvantage. Including but not limited to, such actions could be the below listed, as well as threats or attempts of such actions, which are related to the legal relationship in which the protected person is with the relevant employer, such as:

• suspension, lay-off, dismissal or application of other legal ground for termination of the legal relationship;
• demotion or withholding of promotion;
• change of place of work or labor duties, reduction of salary, change in working hours;
• withholding of training for maintenance and improvement of professional capacity of the employer or worker;
• a negative performance assessment or employment reference;
• imposition or property and/or disciplinary measure;
• coercion, intimidation, ostracism, harassment for taking retaliatory actions or actions expressed physically, verbally or in any other way that are intended to harm the dignity of the person;
• creating a hostile professional environment, discrimination, disadvantageous or unfair treatment;
• failure to convert a temporary employment contract into a permanent one, where the worker had legitimate expectations that he or she would be offered permanent employment;
• early termination of a temporary employment contract or failure to renew it when such is allowed by the law.

Prohibited are also the following retaliatory actions:

• harm, including to the person’s reputation, particularly in social media, or financial loss, including loss of business and loss of income;
• blacklisting on the basis of a sector or industry-wide informal or formal agreement, which may entail that the person will not, in the future, find employment in the sector or industry;
• early termination or cancellation of a contract for goods or services, when the whistleblower is a supplier;
• cancellation of a licence or permit;
• medical referrals.

Obliged entities under the Whistleblowing Act

Several categories of employers are subject to the Whistleblowing Act, namely: the employers in the public sector, excluding the municipalities under 10,000 citizens; the employers in the private sector with 50 or more employees; the employers in the private sector, regardless of the number of employees, engaged in providing of financial services.

The Whistleblowing Act should be applied by the employers in the private sector with more than 249 employees from 4 May 2023 and by the employers in the private sector with 50 to 249 employees from 17 December 2023.

Reporting channels

• Internal reporting channel to be organised by the respective employer that is an obliged entity under the Whistleblowing Act, through which reports are to be submitted, recorded, and processed, and based on the internal inspection to be taken adequate follow-up actions, if and when they are necessary;
• External reporting channel – a unit within the Commission for Personal Data Protection (CPPD), which will act as a Central External Whistleblowing Authority, receiving signals and forwarding them to the relevant competent state authority. Whistleblowing to European Union institutions is also considered an external reporting channel.

Whistleblowers may choose to report through one reporting channel, a combination of two reporting channels, or to use all three reporting channels simultaneously.

Mandatory actions to be taken by obliged entities under the Whistleblowing Act

• Adoption of internal rules for the implementation of the Whistleblowing Act, which content should comply with the legal requirements;
• Establishment of an internal reporting channel, whereas it is mandatory to define the procedure for submission and registration of reports in accordance with the rules provided for in the Whistleblowing Act, internal processing of the reports, follow-up actions after the completion of the internal inspections;
• Appointing persons who will accept, register and process the reports for breaches;
• Establishment and maintenance of a register of reports, containing at least the mandatory information under the Whistleblowing Act and maintained in an order and manner to be determined by the CPPD;
• Ensuring the confidentiality of the identity of whistleblowers and affected persons and of the information provided, subject to the conditions set out in the Whistleblowing Act;
• Amendment of internal rules and policies for the processing of personal data concerning the application of the Whistleblowing Act;
• Preparation and disclosure of information concerning the implementation of the Whistleblowing Act, conduct of training and implementation of other appropriate measures to encourage internal whistleblowing.

“Dr. Miroslava Hristova” Law Firm may assist all interested employers in drafting the necessary internal documents (rules, sample documents and forms, orders, information materials, etc.), as well as in the implementation of the relevant internal processes in connection with the Whistleblowing Act. For more information, please contact us at the following email address: office@recht.bg.

The foregoing information is compliant with the Whistleblowing Act by March 10, 2023, and it is a general and non-exhaustive review of the provisions of the said legal act. The above information does not constitute legal advice or guidelines for action by persons interested in the subject matter of this article.