Sweden Takes a Major Step Forward in Whistleblower Protection with New Act

Stockholm - A Significant Move towards Strengthening Whistleblower Protection

In a significant move, Sweden has become the second EU Member State after Denmark to fully transpose the Whistleblower Protection Directive into national law, ahead of the December 17, 2021 deadline. The new Whistleblowing Act came into effect on September 29, 2021, aiming to strengthen whistleblower protection in the country’s finance industry.

Key Features of the New Act

Builds upon Sweden’s existing whistleblowing legislation introduced in 2016
Provides legal protection for employee and consultant whistleblowers reporting serious misconduct
Extends scope of protection to cover reports regarding serious violations of Swedish law, as well as other serious misconduct
Introduces new guidelines for whistleblowers, requiring them to first raise an external concern with a relevant authority before going public

Compliance Requirements

Employers in the private sector with 250 employees or more, and those in the public sector, must implement a whistleblowing scheme by July 17, 2022
Private sector companies with between 50 and 249 employees have until December 17, 2023 to comply
Individual entities within a group structure with 250 or more employees must implement their own internal system for internal reports

Expert Insights

Experts at Fylgia, a leading Swedish law firm, note that the Act includes several key enhancements to existing whistleblowing protections and measures
Emphasize the importance of reviewing and updating existing policies, guidelines, and procedures to ensure compliance
Highlight the need for training and awareness, especially for management, to ensure employees and consultants have easy access to information on how to make a report through both internal and external whistleblowing systems

Implications and Recommendations

Companies considering outsourcing whistleblowing systems must be aware of the General Data Protection Regulation, particularly in relation to data processors
The scope of protection set out in the Act may be extended through collective bargaining agreements, but any agreed limitations cannot reduce the minimum level afforded under the Act
Companies in the finance industry are advised to take immediate action to ensure compliance with the new Act and its implications for their organizations.