On 21 April 2022, a draft law implementing Directive 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 (the “Draft WBA”) was published for public consultations. The consultations period will end on 23 May and shortly after that the Draft WBA will likely be submitted with the Bulgarian Parliament.

What is the Draft WBA in a nutshell?

Once enacted into law, the new rules will introduce for the first time in Bulgaria a general whistleblowing framework requiring from companies to enable whistleblowing within and outside their organizations by establishing internal reporting channels and protecting reporting persons from retaliation.

Who is protected under the Draft WBA?

Persons reporting or disclosing publicly:

(i) breaches of national or EU law concerning public procurement, financial services, anti-money laundering, product safety and compliance, transport safety, protection of the environment, radiation protection and nuclear safety, food safety, animal health and welfare, public health, consumer protection, personal data protection and security of network and information systems; or

(ii) breaches affecting the financial interest of the EU as per Art. 325 of the TFEU; or

(iii) breaches relating to the Internal Market, including breaches of competition law, state aid and corporate taxation; or

(iv) crimes of which the person has become aware in connection with its duties*,

who have become aware of such breaches or crimes in their capacity of:

(i) employees (incl. when the information is obtained in the context of a terminated employment relationship), interns*, volunteers* or self-employed; or

(ii) shareholders or members of a management or supervisory body; or

(iii) employees of a subcontractor or supplier; or

(iv) job candidates* (“Whistleblowers“).

In addition, all persons who are facilitating the Whistleblower or are connected with her/him and may suffer retaliation in a work-related context (colleagues, relatives etc.) and all legal entities that the Whistleblower owns, works for or is otherwise connected with in a work-related context will also benefit from the protection provided by the law.

Who is obliged to act under the Draft WBA?

The Draft WBA applies to: (i) all employers in the public sector (e.g. state agencies, government etc.) and (ii) the employers in the private sector (a) having more than 50 employees or (b) falling within the scope of certain EU acts concerning financial services, banking, insurance, capital markets, anti-money laundering etc.

What are the key obligations under the Draft WBA?

The employers covered by the Draft WBA will be required to establish internal reporting channels which guarantee the completeness, integrity and confidentiality of the reported information and enable the storing of such information on durable mediums allowing for subsequent inspections based on it.

The procedure for using the internal reporting channels will have to be communicated in clear and accessible terms, including by making it available on the employers’ websites and the work premises.

The reporting channels may be operated internally by a person or a department designated for that purpose or externally by a third party. 

The Draft WBA envisages that employers having 50 – 249 employees may use a common internal reporting channel. The equivalent provision of Article 8, para. 6 of the Directive (EU) 2019/1937 has sparked controversy among multinational companies developing uniform reporting tools for all entities within their groups. The European Commission Expert Group has opined that[t]here is no exception from [the 50-employees threshold] rule exempting from this obligation legal entities belonging to the same corporate group” and “[t]herefore, national transposition laws that would allow corporate groups to only establish reporting channels in a centralised manner at group level would constitute an incorrect transposition of the Directive“. The official reasoning and motives of the Draft WBA do not provide guidelines in that regard, but an interpretation in line with the opinion of the Expert Group seems probable.

Employers will be required to accept, keep written/electronic records of and follow up on both identified and anonymous reporting. The term for performing the check and follow up is 3 months as from the reporting receipt.

What protection is provided under the Draft WBA?

Similarly to the Directive, the Draft WBA prohibits all forms of retaliation against Whistleblowers, including suspension, dismissal, demotion, withholding of promotion, negative performance assessment, discrimination or unfair treatment, early termination of contracts for goods or services etc.

The Draft WBA provides that in case of breach the Whistleblower will be entitled to a compensation for the material and moral damages suffered. Hopefully, this rule will be further elaborated by the Bulgarian Parliament, including, for example, with regard to its possible conflict/relationship with the liability for unlawful dismissal under the Bulgarian Labour Code.

In another ambiguous text that should be subject to further consideration and clarification in the final law, the Draft WBA provides that all retaliation measures against the Whistleblowers shall be prohibited “until the completion of the verification of the reporting or until the end of the court proceedings“.

What would be the sanctions for breaches of the whistleblowing requirements?

The envisaged fines for breaches of the new whistleblowing rules may amount up to c. EUR 10,000 and c. EUR 15,000 in case of consecutive violations.

*Local-specific requirement

The information contained in this article is provided for information purposes and is not intended to be a legal advice and should not be relied or acted upon as such.