What is whistleblowing?

Since at least the disclosures by Bradley Birkenfeld and the subsequent investigation against the Swiss major bank UBS, so-called whistleblowing has also gained significance in this country.

Whistleblowing and Whistleblower Protection

Whistleblowing refers to the disclosure of secret or protected information to the public. The whistleblowers, the disclosing parties, are subject to whistleblower protection. According to the OECD, this involves legal protection against discriminatory or disciplinary actions for employees who report offenses of any kind related to their workplace to the competent authorities in good faith and for valid reasons. Therefore, anyone who rightfully exposes misconduct in the workplace deserves legal protection from dismissal or other impending negative consequences.

Whistleblower Systems

Both government authorities and companies themselves have established whistleblower systems or offices to facilitate the reporting of irregularities at the workplace. In the USA, for example, various whistleblower programs have also been launched. By involving the whistleblower in the form of a premium of 10 – 30 percent of the recovered amount, the motivation to report misconduct is intended to be increased. Such whistleblower systems contribute significantly to uncovering company offenses. This is especially because a large part of the misconduct is first made known by internal company personnel. Fraud cases related to business transactions, for example, are reported by employees in about 53 percent of cases. Various studies have shown that companies can also benefit from internal whistleblower systems as they allow for early rectification of misconduct and prevention of lawsuits.

Legal Status Quo

Despite the increasing importance of whistleblowing and whistleblower systems, they are still comparatively little regulated in Switzerland. There is currently no obligation for companies to establish a whistleblower system. However, there are various soft law regulations and international standards which companies may or must observe. Special rules also apply to companies that are subject to the Sarbanes-Oxley Act. Despite the low level of regulation, existing law provides some protection for whistleblowers. Because anyone who makes a report in good faith is protected against accusations of disloyalty and defamation. Moreover, employers have a duty of care for their employees and must observe data protection regulations upon receipt of a complaint. Last but not least, there is some protection against dismissal (Art. 336 OR).

Reporting Cascade

In addition to existing regulations, the Federal Council has proposed creating a reporting cascade. According to this, employers should set up a reporting office where grievances can be reported. Only if the employer remains inactive or if reporting individuals face disadvantages (e.g., termination) should they proceed to a higher authority. If the competent authority also does nothing, the public can be approached.

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