Whistleblowing in Italy

Publication | May 2018

What conduct or disclosures are covered?

Private sector employment

The first-ever whistleblowing regulation generally applicable to the private sector in Italy came into force on December 29, 2018, with the passage of Law No. 179/2017 (the Law). The protection scheme for whistleblowers provided by the Law is applicable only when the company-employer has adopted an organizational model for crime prevention pursuant to Decree No. 231/2001 relating to corporate criminal liability (the Decree 231 Model).

In particular, the Law requires that companies having the Decree 231 Model, set up a mandatory reporting system for the protection of whistleblowers. This system must provide one or more channels allowing employees to report:

  • “unlawful conduct(s), which are relevant for the purposes of the Decree and are grounded on precise and consistent evidence” and/or
  • “violations of the Decree 231 Model that the reporting employee has become aware of by reason of his or her employment;”

in order to safeguard the company-employer’s integrity.

Government sector employment

As regards the government (or public-sector), the Law provides a general definition of the conducts and disclosures that may be reported by an employee in the interest of the integrity of the public entity: “unlawful conduct(s) of which the employee of the public entity became aware of by reason or his or her employment.”

However, the available lines of reporting in this situation are limited to:

  • the person at the government entity-employer who is in charge of corruption prevention and transparency,
  • the National Anticorruption Authority (ANAC), and
  • the judicial or accounting authority

The aim of the legislation is clearly to address bribery and corruption, accounting irregularities, money laundering and similar issues.

What is the nature of protection?

Private sector employment

The Law provides wider protection to whistleblowers in the private sector the position prior to the implementation of the Law. In particular, the Law provides that:

  • the whistleblower is protected from any retaliatory or discriminatory dismissal as a consequence of his or her reporting and the whistleblower is protected from any demotion or any other, direct or indirect, discriminatory or retaliatory measure as a consequence of his or her reporting. Any alleged infringement of this protection may be reported to the National Labour Inspectorate by the whistleblower or by his or her union representative (relating to employment law) and
  • in all cases the whistleblower’s identity is and must be kept strictly confidential (relating to privacy law).

Moreover, it is important to note these protections are afforded not only to subordinate employees but also to self-employed workers; in fact, the Law expressly refers to “the employee or the contractor”.

Government sector employment

The nature of the protection provided by the Law for the whistleblower of a government sector employer is similar to that of a private sector employer:

  • the public employee who reports, in the interests of the public administration’s integrity, unlawful conduct which he or she has become aware of by reason of employment, cannot be sanctioned, demoted, dismissed, transferred or subjected to any other organizational measures having direct or indirect negative effects on his or her working conditions because of the report he or she made (relating to employment law); and
  • the relevant government sector employer has an obligation to ensure the confidentiality of the whistleblowers’ identity (relating to privacy law).

Moreover, the Law clarifies that for purposes of application of the Law, “public employee” includes:

  • public administration employees
  • employees of public-economic entities
  • employees of private-law entities subject to public control, and
  • workers and contractors of companies or entities that are providing goods and services and/or performing works or services in relation to the public administration (in this case, the protection provided by the Law applies also to whistleblowers who are not part of the public administration, but have a significant position for the reporting of wrongdoings.)

What actions are permitted in relation to the whistleblower and any disclosed information?

Private sector employment

Whistleblowing policies may never be used as a tool to monitor or evaluate employee performance, or to investigate facts not pertaining to an employee’s working capabilities or to the employer's business.

The Law also provides specific exceptions to the secrecy regime, under certain conditions, in order to pursue the interest of preventing wrongdoings.

Government sector employment

The Law provides greater protection to Government sector whistleblowers than in the past. In particular,

  • The new regulations are mandatory for any public administration;
  • The identity of a whistleblower is better protected in that, except under specific conditions, the whistleblower’s identity must be kept strictly confidential during any disciplinary procedure against the accused person(s), as well as during any eventual trial (criminal or otherwise). In addition, reporting systems must be established to ensure the confidentiality of the whistleblower’s identity using IT modalities and encryption tools.

As with the private sector, the Law provides specific exceptions to this secrecy regime, under certain conditions, in order to pursue the interest of preventing wrongdoings.

What are the remedies/sanctions for non-compliance?

Private sector employment

In case of non-compliance, the Law provides for disciplinary sanctions against anyone who violates the measures aimed at protecting the whistleblowers.

Moreover, the whistleblower or his or her union representative has the right to report any detrimental measure against the whistleblower to the National Labour Inspectorate.

In case of non-compliance, any dismissal, demotion or any other retaliatory or detrimental measure taken against the whistleblower is null and void and the burden of proof is on the employer.

Finally, failure to implement measures to protect whistleblowers or non-compliance with Law as regards protecting whistleblowers may also lead to nullifying the exemption regime on corporate criminal liability, which would otherwise derive from the adoption of the Decree 231 Model by the employer-company.

Government sector employment

In the Government sector, the whistleblower (or his or her union representative) must notify ANAC of any alleged retaliatory or detrimental measure taken against the whistleblower, in order for any remedy action to be taken or sanction to be imposed.

Following due notification, the Law provides for the following sanctions/remedies:

  • In the event of detrimental treatment against the whistleblower adopted by the public administration, there may be pecuniary administrative sanctions ranging from €5,000 to €30,000.
  • In the event of inappropriate reporting procedures and systems for managing reports, there may be pecuniary administrative sanctions ranging from €10,000 to €50.000.
  • In the event of failure to properly examine and process received reports, there may be a pecuniary administrative sanction ranging from €10,000 to €50.000.
  • The whistleblower who has been dismissed because of his or her report is entitled to be reinstated and in this case the burden of proof is on the Government sector employer to prove that the dismissal was neither discriminatory nor retaliatory.

Is there any particular industry sector with additional rules or regulations in relation to whistleblowing?

Private sector employment

Yes. The first whistleblowing rules in Italy were applicable primarily to the financial services sector (banks, financial institutions and providers and insurance companies). For these sectors, even prior to the passage of the new Law, the adoption of whistleblowing policies was either required or recommended as part of anti-corruption schemes or management models in order to prevent certain business crimes.

Recently, Italy has adopted stricter anti-money-laundering regulation, financial intermediaries regulation and insurance distribution regulation that impose new and specific obligations on companies active in the financial services sector regarding the adoption of reporting channels and the protection of whistleblowers.

Government sector employment

Additional points to note

Notes

Private sector employment

Based on EU directives on data protection, in Italy a data controller must take all reasonable technical and organisational precautions to preserve the security of processed personal data.

Government sector employment

Not applicable


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