EU whistleblower protection directive: Entities must set up internal whistleblowing channels in Malta

The Maltese government passed the Whistleblower Act in December 2021. Malta is thus implementing the EU directive on the protection of persons who report violations of EU law. The act affects private companies, public institutions and non-profit organisations. The Ecovis experts in Malta know the details.

Which companies must implement the whistleblower act?

Under the new act, private companies and public entities with more than 50 employees are obliged to set up effective internal reporting channels for whistleblowing purposes.

Moreover, entities with less than 50 employees are also obliged to implement the legal obligations if an appropriate risk assessment determines that there are possible environmental and public health risks. The law also applies to voluntary organisations which annually raise EUR 500,000 from public collections and other donations.

What are the new rules?

The most notable changes implemented under the new law are the expansion of “protected persons” and scenarios considered “improper practices.” In line with the EU directive, “protected persons” now also include shareholders, directors (including non-executive directors), trainees, former employees and job applicants.

The definition of “improper practices” has been broadened to include an action or a series of actions whereby a person has failed, is failing, or is likely to fail to comply with any legal obligation to which the person is subject to, as well as, among others, actions emanating from laws on public procurement, financial services, products and markets, and the prevention of money laundering and terrorist financing. Improper practices also include actions whereby a corrupt practice, a criminal offence, a miscarriage of justice, or bribery has occurred, or is likely to occur.

We can support you in assessing the applicability of the Whistleblower Act to your company and assist in setting up the necessary channels required by the new law.

Dr Roberta Avellino Pulé, Senior Legal Consultant, ECOVIS GRC Limited, Mosta, Malta

Which reporting channels will employers have to offer in the future?

The Whistleblower Act requires employers to have internal procedures in operation for receiving and dealing with information which, as a minimum, must include all of the following:

• Channels for receiving the reports in writing, orally, or both
• The designation of a whistleblowing reporting officer responsible for following-up on the reports
• Channels for diligent follow-up by the designated person or department

The implementation of the Whistleblower Act ensures Malta’s implementation of the provisions set out in the EU directive. It forces employers to undertake the necessary efforts and adjustments to align themselves with their legal obligations and set up effective internal whistleblowing channels within their entities.

For further information please contact:
Dr Roberta Avellino Pulé, Senior Legal Consultant, ECOVIS GRC Limited, Mosta, Malta
Email: roberta.avellinopule@ecovis.com.mt