EU Whistleblowing Directive: Latvia
1. Has the EU Whistleblowing Directive been implemented in your country? If not: At what stage is the legislative process and when do you expect the national legislation to enter into force?
Yes. The EU Whistleblowing Directive was implemented in Latvia by the new Whistleblowing Act, which was adopted on 20 January 2022 and came into legal effect on 4 February 2022. The new Whistleblowing Act replaced the previous one, which was adopted on 11 November 2018 and was effective between 1 May 2019 and 3 February 2022. Therefore, the whistleblowing as a mechanism was known in Latvia before the official implementation of the EU Whistleblowing Directive.
2. Will your national legislation apply to businesses with fewer than 50 employees?
Article 5(1) of the Whistleblowing Act provides that only businesses that have 50 or more employees are obliged to establish an internal reporting channel. Businesses which employ fewer than 50 employees can establish internal reporting channels at their own discretion or implement a shared group reporting channel. If businesses with fewer than 50 employees implement an internal reporting channel at their own discretion, the Whistleblowing Act is applied to reporting, handling of reports and protection of the whistleblowers.
3. Are there any additional reporting matters (other than the ones included in the EU Whistleblowing Directive)?
Article 3 of the Whistleblowing Act describes reporting matters more broadly, allowing to report any violations related to the public interest.
In addition to the reporting matters covered in the EU Whistleblowing Directive, the Whistleblowing Act highlights other reporting matters, including:
1) inaction, negligence, abuse of office or other unlawful acts of public officials;
2) corruption, violations of the rules on financing political organizations (parties) and their associations and restrictions on pre-election campaigning;
3) embezzlement of public funds or property;
4) tax evasion;
5) threat to building / construction safety;
6) threat to occupational safety;
7) threat to public order;
8) violations of human rights.
The list of additional reporting matters is non-exhaustive. The Whistleblowing Act is prepared in such way that individuals can report any cases related to public interest. The persons responsible for reviewing the reports determine if the reported matter is of public interest and falls within the substantive scope of the Whistleblowing Act.
4. Can a grievance/an interpersonal grievance constitute a reporting matter?
No. Pursuant to Article 3(3)(3) of the Whistleblowing Act, reporting on personal interests is not considered whistle-blowing pursuant to the Whistleblowing Act. Also, whistleblower’s reports are individual; therefore, collective grievances do not constitute reporting matters.
Individual and collective grievances are considered in accordance with the special provisions of the Civil Act, the Labour Act and the Labour Disputes’ Act and are subject to different proceedings.
5. What internal whistleblowing channels will companies need to put in place in your country?
The Whistleblowing Act does not provide that specific channels must be used in companies. Thus, companies have a discretion to decide on types of internal whistleblowing channels which suit them the best.
Companies can choose one or more different options for internal reporting, for example:
1) A special separate e-mail address for filing whistleblowing reports;
2) An e-mail address of the person, who is responsible for handling whistleblowing reports;
3) Online or web-based individual reporting channels;
4) Special mailbox at the premises of the undertaking;
5) Oral reporting / reporting in presence of the person, who is responsible for handling whistleblowing reports in the undertaking.
To ensure that internal reporting is efficient, companies are strongly advised to prepare and implement internal whistleblowing policies, which detail how reports are filed, processed and reviewed at the company. It must be noted that a failure to establish efficient internal reporting channels and whistleblowing policy might result in direct whistleblowers’ reporting to competent authorities or in exceptional cases – public reporting.
6. Must the internal reporting channel permit oral reporting?
It is not mandatory to provide an oral reporting option. If the oral reporting is allowed, internal procedures must be established, providing how oral reports are processed or formed for further review (e.g., the responsible person in the company prepares a report in writing based on an oral report, which in any case must be subsequently signed by the whistleblower.
7. Can the internal reporting channel be outsourced?
Pursuant to Article 5(1) of the Whistleblowing Act, private entities can use the services of third parties to ensure operation of the internal whistleblowing system and handling of whistleblowers’ reports. Outsourcing can be ensured by law offices, auditors or other reliable external parties.
State / municipal authorities and companies are not allowed to use outsourcing for internal reporting.
8. Is there any statutory obligation to provide whistleblowers with any information about the internal and/or external reporting channels? If so, must this information be given in local language?
Article 5(4) of the Whistleblowing Act provides that all persons shall be informed of the internal whistleblowing system and internal reporting channels at the start of their traineeship, employment, service or other professional relationship. Also, the company must ensure that the information about the whistleblowing system is easily accessible and available at the place of work.
There is no statutory obligation to inform whistleblowers about external reporting channels.
Since the internal whistleblowing channels are related to public interest issues, then information must be given in local (Latvian) language pursuant to requirements of the Official Language Act. Also, for foreign employees, information about the internal reporting channels must be available in the language they understand.
9. Is there a mandatory procedure that companies will need to follow once a report is filed?
Generally, the procedure for review and investigation of the reports is left at the companies’ discretion. However, the Whistleblowing Act provides that a company must observe some statutory procedures and deadlines, when handling whistleblowing reports.
Pursuant to Article 7(2) of the Whistleblowing Act, companies must provide notification of the receipt of the report immediately, but no later than in 7 days’ time after the receipt of the report. Also, notification of acknowledgement must be provided to the whistleblower in 3 days’ time after decision to acknowledge the report as a whistleblower’s report is adopted.
Article 11(1) of the Whistleblowing Act provides that whistleblower’s data must be pseudonymized immediately after the report is qualified as whistleblower’s report. Whistleblower’s report and documents related to investigation are confidential and with limited access. Illegal disclosures may result in criminal liability.
Article 7(7) of the Whistleblowing Act provides that a company must inform the whistleblower about the progress of investigation within 2 months after the report was qualified as the whistleblower’s report.
After the investigation is complete, the company must inform the whistleblower about the facts established, decisions adopted, and measures taken to comply with Article 7(8) of the Whistleblowing Act.
10. What are the works council’s or other representative bodies’ participation rights in respect of whistleblowing systems?
Pursuant to Article 9 of the Whistleblowing Act, trade unions as employee representative bodies can provide support, including counselling, to whistleblowers and persons wishing to report to promote whistleblowing and whistleblower protection.
Similarly, trade unions can provide support to employees in accordance with their bylaws, where persons have reported or wish to report concerns related to whistleblowing.
Trade unions may also, without a specific authorization, apply to an authority (body) or a court on behalf of a whistleblower they represent in accordance with their statutes, and defend the rights and legitimate interests of the whistleblower.
11. Which categories of persons can be whistleblowers in your country?
Pursuant to Article 1(1)(7) of the Whistleblowing Act, a whistleblower may be a natural person who provides information about an alleged violation concerning public interest, if the information was obtained during the fulfilment of work duties (namely, not only performance of employment work duties, but also in case of work duties of the service providers), while establishing of legal relationship related to the fulfilment of work duties or during practice (internship).
Therefore, whistleblowers can only be natural persons. The definition is broad and covers employees, candidates, trainees, interns, self-employed persons, clients, business partners, etc.
12. Can reports be anonymous?
Anonymous reports fall outside of the legal framework governing whistleblowing in Latvia. Notwithstanding the foregoing, companies have a discretion to investigate anonymous reports at their own initiative. In case an anonymous whistleblower is subsequently identified as the whistleblower, he or she is a subject to the statutory protection guarantees, including protection against adverse consequences.
Latvia decided that anonymous reporting may result in excessive amounts of groundless reports, and that protection of anonymous whistleblowers against potential retaliation cannot be ensured.
13. What protection will be afforded to whistleblowers under your national legislation? Does that protection still exist if the disclosure is determined to be without merit or if the report was maliciously made?
The Whistleblowing Act provides that a whistleblower is afforded protection of identity, protection against adverse consequences resulting from whistleblowing, exemption from legal liability.
Additional protective measures that facilitate the rights of the whistleblower include:
– legal aid provided by the Government;
– exemption from the payment of court costs in civil proceedings and from the payment of a state fee in administrative proceedings before a court;
– interim relief in civil proceedings and in administrative proceedings before the courts;
– appropriate compensation for damages for loss or personal injury, including moral injury;
– advice on the protection of their rights;
– exemption from the obligation to comply with the out-of-court procedure in administrative proceedings.
If the report is not qualified as the whistleblower’s report, then the whistleblower forfeits the protection afforded by the Whistleblowing Act. Administrative liability might be imposed on persons who intentionally file malicious reports.
14. How much compensation can be awarded to a whistleblower if they are penalised for having made a report?
There are no statutory limits or quotas for compensations if whistleblowers are penalized. Since the whistleblowing is still quite new instrument in Latvia, there is no extensive or well-established case law on specific or approximate range for compensation.
If any material damage is caused, it is calculated and compensated pursuant to the Civil Act and the Civil Procedure Act in court proceedings. A compensation for moral suffering is awarded in case of illegal conduct against the whistleblower. The amount of the moral compensation is determined by the court in each individual case.
15. How should the employer deal with persons named in the report?
Reports are confidential and shall be treated as such. Information in the whistleblower’s report and the related investigation thereof is limited access information.
The Whistleblowing Act does not provide special provisions for protection of witnesses or other persons named in the report, e.g. offender, clients, colleagues, family members, etc. At the same time, it is forbidden to disclose information revealing the identity of the natural or legal person that is reported by the whistleblower.
Disclosures may be allowed only to the person responsible for investigation based on the whistleblower’s report, or persons, who work for the investigation initiated. In exceptional cases, disclosure may be allowed, if it is necessary for the protection of the whistleblower, his /her relative or associated person.
If, after finalizing the investigation, the person named in the whistleblower’s report shall be held accountable, the company (employer) can apply disciplinary measures, terminate an employment contract, inform the police or other responsible authorities accordingly.
It must be noted that any illegal disclosures related to persons or information covered by the report, may result in criminal liability.
16. Does your national whistleblowing legislation create offences for non-compliance and what penalties do such offences attract?
An administrative fine is imposed for causing adverse consequences to the whistleblower, his relatives or related persons. Administrative fines are between EUR 30 and EUR 700 for a natural person, and from EUR 70 to EUR 14,000 for a legal entity.
An administrative fine in the amount between EUR 30 and EUR 700 can be imposed for knowingly making false statements in whistleblower’s reports (malicious reporting).
An administrative fine in the amount between EUR 15 and EUR 350 for natural persons or EUR 35 – EUR 7000 for legal entities may be imposed for obstructing or attempting to obstruct whistleblowing, including obstructing the submission or consideration of a whistleblower’s report.
Administrative fines are imposed by the State Labour Inspectorate.
Articles 200, 329 and 330 of the Criminal Act provide that a criminal liability may be imposed for breach of the duty of maintaining the confidentiality of the identity of reporting persons.
Pursuant to Article 731 of the Civil Procedure Act, a procedural fine may be applied for bringing vexatious proceedings against whistleblowers, their family members, related parties or colleagues in relation to reporting.
Article 298 of the Criminal Act provides that criminal liability may be imposed if retaliation results in filing malicious report with the intention to initiate criminal proceedings against whistleblower, family members, related parties in relation to reporting.
17. Are there any other practical steps that companies can take to prepare for the new whistleblowing regime?
Since the whistleblowing regime is in effect in Latvia for 3 years, most of the companies subject to the Whistleblowing Act have already implemented measures appropriate to ensure efficiency. Must probably some minor amendments were required to the internal policies after the Whistleblowing Act came into legal force.
Practical steps that companies can take range between preparing clear and efficient internal whistleblowing policies, establishing internal reporting channels and designating responsible persons, as well as properly informing the employees, other persons to whom the internal whistleblowers system could be applicable about this system and its principles.