1 March 2018 is the day on which the act on transparency in public life enters into force. The law imposes a number of new duties on employers, including the duty to implement internal policies and practices concerning prevention of corruption, the duty to verify whether employees or members of the company’s governing bodies were persons acting in a public capacity, and forcing organisations to prepare for a new type of protected employee – the whistle-blower.
The act imposes on medium and large entities a general burden to undertake organizational, personnel, and technical steps to counteract creation of an environment that is conducive to crimes of corruption by persons who act on behalf and to the benefit of the trader.
The duty is particularly important because the employer’s failure to perform it, or performing it superficially or – which is most controversial – ineffectively, makes them liable for a pecuniary penalty of between 10,000 PLN and 10,000,000 PLN imposed by the Chairman of the Office of Competition and Consumer protection (UOKiK) upon the application of the head of the Central Anti-Corruption Bureau (CBA). Another severe effect of the penalty is also a ban on being awarded public contracts for a period of five years.
The act indicates various special duties whose implementation will also be the employer’s obligation. The description of the duties stirs a lot of doubt and legal dilemmas, mainly due to their defective and imprecise wording, especially in the context of the employer’s liability where they have taken preventive measures which turn out to be ineffective. Also those employers who have implemented procedures based on compliance solutions arising from American, British, or French law must consider whether their solutions meet the standards laid down in the new act.
Although the majority of the act goes into effect on 1 March 2018, the regulations concerning anti-corruption duties are subject to a vacatio legis of six months, which means that they will go into force from 1 September 2018. It is worth using this time to implement appropriate procedures and documentation, and for training employees in them.
Conflict of interest prevention
On the basis of the act on transparency in public life, a person holding a public position may not be employed or perform remunerated activities in or for a commercial law company, nor can the person be a member of its management or regulatory body while exercising public functions. Furthermore, they are barred from doing so for a period of three years after the termination of holding a mandate if the individual participated in decision-making processes directly concerning the entity or if they managed a unit or an organizational cell in which the decision was taken.
The act introduces a relatively broad definition of a person holding a public function, which may create more ambiguity.
The infringement of the above ban by a business entity is subject to a pecuniary penalty of 10,000-50,000 PLN imposed by way of an administrative decision of the Head of the CBA.
Furthermore, the act provides for a new category of specially protected employee – the whistle-blower. The status of whistle-blower is granted by the Prosecutor who informs the business entity about having granted a given person such status if the person reports to the enforcement authorities information about a possibility that a crime has been committed by the entity to which the person is bound by an employment contract, a business relation, or any other contractual relationship. The catalogue of crimes subject to whistle-blowing is laid down in the act and concerns primarily the crimes of corruption and economic nature.
The act determines fairly precisely the conditions for granting the status of whistle-blower, although the decision on automatic disclosure of the fact to the employer stirs doubts because in most countries the identity of a whistle-blower is a highly guarded secret. What is more, the entitlements of the whistle-blower, including in particular protection against being made redundant and against making the terms of his/her employment less advantageous without the prosecutor’s consent, and the possibility of receiving financial gratification for the notification (a possibility to punitive damages to hr benefit of the whistle-blower) leaves the door wide open for abuse against which employers will have somewhat less room to manoeuvre than previously.
Author: Janusz Zagrobelny