Spain has taken a significant step in strengthening its legal landscape by transposing the EU Whistleblower Directive into domestic legislation. Law 2/2023, also known as the Whistleblower Protection Law in Spain, has a profound impact on entities with more than 50 employees, mandating them to meet specific compliance obligations. In this article, we dissect the multidimensional implications of this pivotal law.
The Labour and Employment Perspective
The Whistleblower Protection Law’s backbone is closely intertwined with labour and employment legislation. It is a noteworthy development that the law stipulates the whistleblowing system to be rolled out in consultation with the workers’ statutory representatives. The law also highlights that protocols should be in place to prevent workplace misconduct, such as bullying, sexual harassment, and discrimination against LGTBI individuals.
This development implies that the workers who are often the protagonists in the whistleblowing scenario are protected, and their rights and obligations are acknowledged. Such a structure enhances the ethical fabric of the workplace while ensuring labour law requirements are met.
The Data Protection Perspective
A significant change brought about by the Whistleblower Protection Law in Spain is the classification of the governing body as the controller of the whistleblowing system. This shift places the governing body under the legal obligation to comply with all provisions of data protection legislation.
However, the law’s introduction raises a few challenges, including defining the processing of sensitive data and storing personal data resulting from communications received in the whistleblowing system. Therefore, a detailed examination of these aspects is vital from a data protection standpoint to avoid substantial fines that could reach up to 20 million euros.
The Criminal Law Perspective
From the criminal law standpoint, ensuring the whistleblowing system’s compatibility with an organisation’s right to defence in a criminal proceeding becomes crucial following the Whistleblower Protection Law’s implementation. Furthermore, the law’s impact on the organisation’s existing compliance standards and systems for reporting irregularities is equally significant. This requirement provides an additional layer of protection for the organisations while ensuring strict adherence to the law.
The Corporate Governance Perspective
The Whistleblower Protection Law offers flexibility to corporate structures, allowing a single whistleblower system for an entire group or individual systems for each subsidiary. The decision to choose the most suitable model hinges on multiple factors such as corporate structure, governance, and the level of decentralisation each group seeks to adopt.
Anti-Money Laundering and Counter-Terrorist Financing Perspective
The Whistleblower Protection Law extends its scope to all entities obligated to prevent money laundering and terrorist financing. Implementing a whistleblowing system to report breaches of related regulations helps meet the requirements outlined by the law and plays a pivotal role in combating financial crimes.
The Current Scenario: Whistleblowing in Spanish Companies
According to a study by EQS Group, 62% of Spanish companies received whistleblower complaints last year. These complaints ranged from conflicts among personnel to violations of social norms and human rights, and even corruption. Despite this, 58% of the companies reported making changes to adapt to the Whistleblower Protection Law, reflecting a commitment to compliance and transparency.
In conclusion, Spain’s Whistleblower Protection Law impacts multiple aspects of business law, from labour and employment to corporate governance. As Spanish companies continue to adapt to the law’s requirements, it will be crucial to monitor how effectively they implement these changes. Moreover, it will be interesting to observe the law’s impact on combating financial crimes and enhancing the overall transparency in Spain’s corporate landscape.