On February 15, 2023, the European Commission referred eight member states, including Italy, to the Court of Justice for failing to transpose and notify national measures implementing Directive (EU) 2019/1937 on whistleblowing.
In Italy, the transposition process is in an advanced stage, and on February 14, 2023, the Italian draft legislative decree transposing the directive received positive feedback from the justice and labor committees of the Chamber of Deputies with a few comments to be considered by the government.
Comments concerned issues such as sanctions for whistleblowers who make false reports and the prohibition on using external reporting channels after a previous internal report is dismissed.
But what happens if a whistleblower leaks confidential information and documents obtained during employment to journalists? Can whistleblower status be invoked? Can the protection of the right of expression offered by Article 10 of the European Convention on Human Rights be invoked?
On February 14, 2023, the Grand Chamber of the European Court of Human Rights (ECHR) ruling in the case Halet v. Luxembourg answered those questions in the affirmative. The court confirmed established principles of ECHR case law on whistleblowing protection by refining the criteria for their implementation in the current European and international context.
The LuxLeaks case
The case, widely known as “LuxLeaks,” concerned Raphaël Halet’s disclosure of documents protected by professional confidentiality, namely 14 tax returns of multinational companies obtained from his workplace. Following a complaint by his employer, Halet was sentenced on appeal to pay a criminal fine of 1,000 Euros and ordered to pay a symbolic sum of 1 Euro as compensation for non-pecuniary damage suffered by his employer. The Court of Appeals found that the disclosure of documents subject to professional confidentiality had caused harm to Halet’s employer that outweighed the public interest in disclosing the information.
Based on Article 10 of the European Convention on Human Rights, Halet argued that the criminal conviction was disproportionate interference with his right to freedom of expression, but the ECHR held that Article 10 had not been violated, because Halet’s actions did not meet the case-law criteria for whistleblowing.
Therefore, Halet requested that the case be referred to the Grand Chamber. The chamber reversed the lower court’s decision and gave him whistleblower status. It also said that the public interest in disclosure of the information outweighed Halet’s employer’s and its customers’ interest in confidentiality.
The Grand Chamber ruling: Key elements of whistleblowing protection
The ECHR reiterated that the protection enjoyed by whistleblowers under Article 10 of the convention is based on features specific to an employment relationship: duty of loyalty and, when appropriate, the obligation to comply with a statutory duty to maintain confidentiality. However, a whistleblower’s position of economic vulnerability vis-à-vis their employer and the risk of retaliation must also be considered.
The ECHR also pointed out that, in the absence of an unequivocal legal definition of “whistleblower,” the existence of grounds for protection needs to be assessed on a case-by-case basis.
In the LuxLeaks case, the Grand Chamber deemed Halet a whistleblower and granted protection of his right to freedom of expression that prevailed over his employer’s interest in confidentiality, based on the following:
(1) The availability of alternative channels for disclosure: Public disclosure is a last resort to be employed when it is manifestly impossible to do otherwise. Internal channels are, in principle, the best means for reconciling employees’ duty of loyalty with the public interest served by disclosure. However, certain circumstances justify the direct use of external reporting. Indeed, turning to an external reporting channel—including, when necessary, the media—is acceptable when the report concerns practices relating to employers’ normal activities, such as in the LuxLeaks case, and respect for the right to impart information of public interest.
(2) The whistleblower’s conduct: The whistleblower is required to behave responsibly by seeking to verify, insofar as possible, that the information to be disclosed is authentic before making it public. The whistleblower is also required to act in good faith (i.e., not for profit or to harm the employer). The ECHR believed both of these criteria were met in the LuxLeaks case.
(3) Public interest in the disclosed information: The information disclosed must contribute to debate on matters of public interest. Interest in specific information may be so strong that it overrides even the legally imposed duty of confidentiality, which was what the ECHR determined in the LuxLeaks case.
(4) Detrimental effects of disclosure: When whistleblowing protection is evaluated, the detrimental effects on the employer shall not be assessed only in terms of potential financial impact or reputational damage if no longer-term damage has been detected. Instead, all possible detrimental effects must be considered, including detrimental effects on the employer’s customers. In the LuxLeaks case, the ECHR stated, “In the light of its findings as to the importance, at both national and European level, of the public debate on the tax practices of multinational companies, to which the information disclosed by the applicant had made an essential contribution, the public interest in the disclosure of that information outweighed all of the detrimental effects.”
