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New Italian Whistleblowing Law Enacted

Carnelutti & Altieri Esposito Minoli –

A new whistleblowing[1] law – law no. 179/2017 – was enacted by the Italian Parliament on November 15, 2017 (“the law”). Although its impulse to whistleblowing reports in Italy remains to be evaluated in the next years, the law certainly represents a first step of the Italian legislator toward the protection of whistleblowers. The law aims at i) strengthening the existing protection of public employees reporting misconducts that they discover within the work place while performing their services; and ii) introduce a general set of protections for whistleblowers of private companies adopting the organizational model 231.[2] This insight illustrates the main aspects of the newly established legal framework in the public and private sector.

  1. Public Sector

The Anticorruption Law 190/2012 already protected public employees reporting company’s wrongdoing learned at the workplace.

First, the new law grants a broader protection by strengthening the scope of such existing protections: they now apply to employees of both publically owned private companies and economic public entities, as well as of private companies supplying (goods or services) public entities. Second, the law provides any dismissal, change of duties or any other measure having any negative effects, direct or indirect, on their working conditions because of the whistleblowing will be null and void.[3] Furthermore, the Italian national anti-corruption authority (“ANAC”) has been involved by the new law in the whistleblowing process: the whistleblower (or unions) must inform ANAC of the company’s adoption of a measure negatively impacting whistleblower’s conditions because of his or her reporting, and ANAC is empowered to issue i) fines from Euro 5,000 to Euro 30,000 to the company regardless any other form of liability in which the company might be incurred; and ii) fines from Euro 10,000 to Euro 50,000 to the person charged with control duties who has not fulfilled such duties or purposely ignored the whistleblower’s report.

  1. Private Sector

For the first time, the law established a protective framework for private companies’ whistleblowers. In detail, the law provides private companies having implemented the Organizational Model set forth in the Legislative Decree 231/2001 (so called “model 231”)[4] to integrate a such model through a specific whistleblowing procedure and whistleblowers’ protections. As noted, the law missed the opportunity to mandate all private companies to adopt a whistleblowing compliance program. Indeed, despite many large Italian companies have adopted their model 231, Italian companies are not mandated to adopt this model under Law 231. As such, it is likely that whistleblowers within small and medium enterprises not having any ties with public entities will still not benefit from the new whistleblowing protection.

According to the law, a model 231 must implement a whistleblowing protection program including three main measures:

  • 1) effective channels through which whistleblowers can report misconducts learned while working. Any of such channels must be confidential protecting the whistleblower’s identity[5]; however, the law does not grant anonymity in all judicial proceedings arising from the whistleblowing.
  • 2) prohibition of acts of retaliation or direct or indirect discriminatory actions against the whistleblower (because of having reported a misconduct of the company). Also, alike public companies’ whistleblowers, any of those actions will be considered null and void, unless the company is able to prove that the action is unrelated to the whistleblowing activity;[6]
  • 3) a disciplinary system is required as a part of the general disciplinary system under the model 231. In particular, sanctions must be provided for those who violates the whistleblower’s protecting measures and for the whistleblowers in the event of willful or grossly negligent or purposely false reports.

 

[1] Whistleblowing refers to procedures designed to protect employees against wrongdoing in the workplace. Such procedures should clearly provide what type of irregularities must be reported, channels to report, and actions to be taken after receiving a report.

[2] The Italian framework did not provide a clear and comprehensive framework regulating whistleblowing before the new law has been enacted (there were some provisions, such as Law no. 114/2014, but only applicable to public sector’s employees).

[3] Such measures do not apply to reports that are slanderous or defamatory, or those that result in a finding of the whistleblower’s civil liability in case of wilful misconduct or gross negligence in making such reports. In the absence of good faith, the whistleblower might also be subject to dismissal without notice.

[4] Model 231 is designed to prevent the commission of a long list of crimes. Although its adoption is not mandatory, it increasingly represents a strategic choice for companies who want to exclude corporate liability for crimes committed by the relevant persons (members of the top management and of the staff, external or occasional collaborators, including any person subject to the management or supervision of the top management) in the interest and to the advantage of the companies themselves.

[5] The new law does not provide specific protections to be adopted for confidentiality regarding the identity of the whistleblower. As a general rule, however, the identity of the employee reporting its company’s misconduct cannot be revealed within the criminal, civil or disciplinary proceedings started as a consequence of the whistleblowing. ANAC is also expected to issue guidelines granting confidentiality on the report/whistleblowing during the different phases of those proceedings.

[6] However, the law does not introduce any incentives to whistleblowers who must also bear the legal fees and costs of the litigation originating from the whistleblowing.

Compliments of Carnelutti & Altieri Esposito Minoli –  a member of the EACC in New York