Croatia: Croatia Enacts Whistleblower Protection Act

Croatian employers have until the end of this year to partially comply with the recently enacted Act on the Protection of Whistleblowers (Zakon o zaatiti prijavitelja nepravilnosti; "Whistleblower Protection Act"), with which they must come into full compliance by March 2020. The Whistleblower Protection Act defines who will be deemed a whistleblower and enjoy protection for whistleblowing. In contrast, the current whistleblower provisions are scattered throughout a number of laws, such as the Criminal Code, the Trade Act, the Employment Act and others. Consequently, research conducted in 2017 has shown that around 60 % of Croatian examinees do not know how to report corruption.

The Whistleblower Protection Act follows Recommendation CM/Rec(2014)7 of the Committee of Ministers.

Persons affected by the Whistleblower Protection Act

Protection is provided to a wide circle of persons, not only employees, but any natural person who reports workplace irregularities. This may include volunteers, students, contract workers, undeclared workers, as well as job interviewees. On the other hand, public authority bodies as well as legal entities are recognised as employers.

Whistleblowers may not be placed in a disadvantageous position

The Whistleblower Protection Act prohibits companies from preventing the reporting of irregularities, i.e. any illegal conduct against public interest. Reporting of irregularities (whistleblowing) is not considered a violation of business secrets.

Bylaws or acts of an employer which prohibit the reporting of irregularities or which deny or violate the rights of whistleblowers are without legal effect.

In addition, an employer must not place a whistleblower in a disadvantageous position because of reporting. This encompasses "regular" acts of retaliation, such as termination of employment, salary decrease, demotion and work overload, as well as more sophisticated acts of mobbing such as assigning meaningless tasks or tasks far below the employee's qualifications, or not assigning any tasks at all.

Reporting may be (i) internal, (ii) external and (iii) public disclosure. 

Internal whistleblowing means reporting to an employer

An employer must:

  1. enable internal reporting of irregularities;
  2. at the proposal of at least 20 % of its employees: (A) appoint a confidential person to whom irregularities are reported, alternatively such a person will be appointed by an employer, and/or (B) revoke an already appointed confidential person and appoint a new one within a month from revocation;
  3. at the proposal of the confidential person, appoint their deputy;
  4. protect a whistleblower from harmful actions and take measures to stop such actions and eliminate their consequences;
  5. keep received information from unauthorised disclosure;
  6. eliminate identified irregularities.

Employers with more than 50 employees must organise internal reporting procedures and appoint a confidential person by means of a bylaw. The rights of whistleblowers may not be decreased by such a bylaw. A bylaw that does not comply with the Whistleblower Protection Act does not have legal effect.

The confidential person must notify the Ombudsman about all reported irregularities within 30 days from the decision rendered in respect of the reported irregularity. If the irregularity has not been resolved with the employer, the reported irregularity must also be forwarded to the authority competent to investigate the irregularity (e.g. State Attorney, State Inspectorate).

External and public disclosure

Irregularities may be reported to the Ombudsman as a competent authority, provided that at least one of the following conditions has been met:

  1. there is an imminent threat to life, health, safety, largescale harm or destruction of evidence;
  2. there is no possibility of internal reporting;
  3. the whistleblower has not been informed within 30 days of the results of the actions undertaken or no actions have been undertaken in response to the information provided in the process of internal reporting;
  4. there is a concern that internal reporting cannot ensure the right to protection, protection of the identity of a whistleblower or confidentiality of reported information;
  5. there is a founded concern that a whistleblower might be placed in a disadvantageous position due to reporting or if the protection measures undertaken were not effective;
  6. the whistleblower no longer works for the employer.

In exceptional cases, irregularities may be publicly disclosed, without prior reporting to an employer or Ombudsman, if there is an imminent threat to life, health, safety, largescale harm or destruction of evidence.

Whistleblowers have right to court protection, damages and confidentiality of their identity

Whistleblowers have the right to the confidentiality of their identity being maintained. They may also seek court protection for any damages suffered and request that the judgment be published in the media. The Whistleblower Protection Act provides elective jurisdiction, so that besides the defendant's business seat, whistleblowers may also seek protection from the court of their residence or where the damage occurred. The burden of proof will shift to the employer if the whistleblower demonstrates that it is probable that they were placed in a disadvantageous position and that one of their rights has been violated.

Sanctions and entry into force

Monetary fines range from HRK 10,000 to HRK 30,000 (approx. EUR 1,350 to EUR 4,050) for minor offences and HRK 30,000 to HRK 50,000 (approx. EUR 4,050 to EUR 6,750) for more serious offences.

The Whistleblower Protection Act will enter into force on 1 July 2019, but employers still have six months thereafter to establish a bylaw that will organise their internal reporting procedure and nine months for a bylaw that will organise the appointment of a confidential person.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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