Noémie Haller, Counsel, on the left, and Philippe Schmit, Partner, on the right, both specialised in Employment law, Pensions & Benefits at Arendt. Marie Rusillo / Maison Moderne

Noémie Haller, Counsel, on the left, and Philippe Schmit, Partner, on the right, both specialised in Employment law, Pensions & Benefits at Arendt.  Marie Rusillo / Maison Moderne

In May 2023, bill no. 7945 has been adopted and went into effect. This law aims to transpose EU Directive 2019/1937, which covers the protection of whistle-blowers, in national law. It applies to any report concerning any violation of any national or EU law. All companies must now protect those who report breaches. Retaliatory measures such as dismissal, demotion, or salary decreases are strictly forbidden.

What employers need to know

The law applies to both the private and public sectors, and it protects both self-employed and employed workers. This includes shareholders, volunteers, interns, contractors, individuals related to whistle-blowers, applicants, and more. Administrative fines for non-compliance range between €1,500 and €250,000 and criminal fines range between €1,250 and €25,000. “Also, a whistle-blower who has been dismissed may ask for damages and to be reinstated,” explains , Counsel at Arendt.

The number of whistle-blowing cases has already risen, especially as employers are now subject to a related law (Loi du 29 mars 2023) intended to combat moral harassment in the workplace (applying to any employer irrespective of the sector and of the number of employees). The line between these laws can be blurry, and since they went into effect, there have been many reports of violations in which it is a priori not clear to which law the scope pertains.

The whistle-blowing law covers any violation of national or EU law and thus also possible breaches of labour law.

Noémie Haller, Counsel – Employment law, Pensions & Benefits, Arendt

If a company employs at least 50 people, the law on the protection of whistle-blowers requires it to implement internal reporting channels for breaches, and this also applies to public-sector entities as well as most communes. “The rules are very specific: the internal reporting channel must be secure; the identity of the whistle-blower must be protected; and at least one person within the company must be entrusted with managing reports,” says Ms Haller.

The burden for employers and how to lighten it

Even for companies with fewer than 50 employees, having a dedicated channel and staff member for managing reports can be invaluable. Otherwise, an employee might report a perceived infringement outside of the company (directly to the competent authorities or even through public disclosure), thereby damaging the company’s reputation, even if the infringement proves to have lacked merit. “Not every employer has sufficient resources, and some lack an understanding of the law. Seeking help from an expert in labour law can alleviate some of those pressures,” says , Partner at Arendt.

Arendt, for example, assists clients at any stage covered by the whistle-­blowing and moral harassment laws. They help to draft clear internal regulations. Two different internal procedures are recommended – one for whistle-blowing and one for moral harassment – as they are handled very differently. “In an investigation of a case of moral harassment, for example, the identity of subjects is not protected in the same manner as in a whistle-blowing case,” says Mr Schmit.

For most companies, it makes sense to externalise the management of whistle-blowing channels and reports.

Philippe Schmit, Partner – Employment law, Pensions & Benefits, Arendt

Arendt also offers full-service solutions to manage alerts and reports. Its employment law practice is able to receive reports on behalf of clients. Once a report is received, Arendt experts deter­mine if it is justified from a legal perspective. In consultation with the client, the firm determines if an investigation should be conducted. The firm then assists with remediation measures in order to resolve the issue so that employers feel secure and employees feel their concerns have been addressed.

Luxembourg’s whistle-blowing law goes beyond transposing into national law the EU directive on the topic. The law covers a broad scope and applies to companies of any size and in any sector. Employers need to be aware of their obligations as well as how working with an ­experienced legal advisor can help to ensure compliance and protect employees.

What to know

Every company is impacted Regardless of their size, all companies must comply with the law on the pro­tec­tion of whistle-blowers. If not, they face administrative fines up to €250,000 and criminal fines up to €25,000.

An additional obligation for larger companies  Companies with at least 50 employees must implement an internal channel for employees to report infractions and have their identities protected. Com­pa­nies with fewer than 50 employees are free to implement such internal reporting channel.

Broad range of protection The protections extend to contractors and those working for them, share­-holders, volunteers, interns, new hires, relatives of whistle-blowers, and even applicants.

Benefits of externalising Hiring an experienced legal advisor to create internal processes, collect and analyse reports, and mediate can ensure compliance and resolve conflict.

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