The presence of moral considerations into the legislative process seems to be increasing, as evidenced by the entry into force of the Loi Sapin II which created a protective status for whistle-blowers to encourage the denunciation of bad practices.
These two legal developments are not isolated and follow a genuine framework of moralisation that concerns all economic actors.
Furthermore, we can refer to the publication by the MEDEF (leading network of entrepreneurs in France), in September 2017, of a handbook explaining the new obligations concerning the extra-financial reporting in order to facilitate the development of the corporate social responsibility (CSR).
These two legal developments are not isolated and follow a genuine framework of moralisation that concerns all economic actors.
Furthermore, we can refer to the publication by the MEDEF (leading network of entrepreneurs in France), in September 2017, of a handbook explaining the new obligations concerning the extra-financial reporting in order to facilitate the development of the corporate social responsibility (CSR).
I. The protection of whistle-blowers
Loi Sapin II of December 9th 2016 provides for the protection of whistle-blowers and compels companies of more than 50 employees to implement a reporting procedure as of January 1st 2018.
Article 6 of Loi Sapin II defines a whistle-blower as a “natural person revealing or reporting, in a disinterested way and in good faith:
– A crime or an offence,
– A serious and manifest violation of an international commitment duly ratified or approved by France,
– A unilateral act of an international organization taken on the basis of such a commitment, the law or the regulation,
– A threat or serious harm to the public interest of which he/she has been personally aware.
The following are excluded: facts, information or documents covered by national security, medical secret or the confidential relations between a lawyer and his client “.
It has to be noted that legal entities cannot be qualified as whistle-blowers.
Article L. 1132-3-3 of the French Labour Code provides for the protection of whistle-blowers, who may not be discriminated against in the course of hiring, be excluded from a promotion or be dismissed because of the reporting effectuated:
“No person shall be excluded from a recruitment procedure or from access to an internship or a period of professional training, no employee shall be penalized, dismissed or discriminated against, directly or indirectly, notably as regards remuneration, measures of profit-sharing or share distribution, training, reclassification, assignment, qualification, classification, professional promotion, transfer or contractual renewal, for having reported an alert in accordance with Articles 6 to 8 of Law n° 2016-1691 of 9 December 2016 on transparency, the fight against corruption and the modernization of economic life “.
Hence, whistle-blowers profit from the strictly confidential nature of the procedure, and the prohibition of professional retaliation measures as well as criminal immunity. However, if the whistle-blower’s statements are defamatory, the natural person will not be protected since he/she will not be considered as a whistle-blower in the legal sense and will be subject to the sanctions provided by the French Criminal code for slander as well as disciplinary proceedings.
This protection of whistle-blowers invites companies to adopt virtuous behaviour.
Loi Sapin II also provides the implementation of the appropriate proceedings for the collection of reporting emitted by the whistle-blowers in the companies of more than 50 employees. The outline of the proceedings were specified by a Decree n° 2017-564 of 19th April 2017, which entered into force on the 1st of January 2018.
The Decree compels the company to appoint an adviser likely to receive the reports and which disposes, by its positioning, of the competence, the authority and the means sufficient for the exercise of its mission. This adviser can be a natural or legal person and not be a stakeholder of the company.
It is also the responsibility of the company to set up a procedure for the collection of reports which must be brought to the attention of all the members of its staff or its agents, as well as its external and occasional collaborators.
This procedure must specify the manner in which the whistleblower addresses his report, provides the supporting elements and communicates with the recipient.
In addition, this procedure must indicate the steps taken by the company to inform the author of the receipt of his report and the reasonable and foreseeable time necessary for its review, the measures taken to ensure the strict confidentiality of the author, the facts and persons concerned, as well as the provisions to allow the destruction of elements which could enable the identification of the author.
Finally, in terms of sanctions, Loi Sapin II provides that any person who obstructs, in any way whatsoever, the transmission of an alert is punishable by one year’s imprisonment and a fine of 15,000€.
Article 6 of Loi Sapin II defines a whistle-blower as a “natural person revealing or reporting, in a disinterested way and in good faith:
– A crime or an offence,
– A serious and manifest violation of an international commitment duly ratified or approved by France,
– A unilateral act of an international organization taken on the basis of such a commitment, the law or the regulation,
– A threat or serious harm to the public interest of which he/she has been personally aware.
The following are excluded: facts, information or documents covered by national security, medical secret or the confidential relations between a lawyer and his client “.
It has to be noted that legal entities cannot be qualified as whistle-blowers.
Article L. 1132-3-3 of the French Labour Code provides for the protection of whistle-blowers, who may not be discriminated against in the course of hiring, be excluded from a promotion or be dismissed because of the reporting effectuated:
“No person shall be excluded from a recruitment procedure or from access to an internship or a period of professional training, no employee shall be penalized, dismissed or discriminated against, directly or indirectly, notably as regards remuneration, measures of profit-sharing or share distribution, training, reclassification, assignment, qualification, classification, professional promotion, transfer or contractual renewal, for having reported an alert in accordance with Articles 6 to 8 of Law n° 2016-1691 of 9 December 2016 on transparency, the fight against corruption and the modernization of economic life “.
Hence, whistle-blowers profit from the strictly confidential nature of the procedure, and the prohibition of professional retaliation measures as well as criminal immunity. However, if the whistle-blower’s statements are defamatory, the natural person will not be protected since he/she will not be considered as a whistle-blower in the legal sense and will be subject to the sanctions provided by the French Criminal code for slander as well as disciplinary proceedings.
This protection of whistle-blowers invites companies to adopt virtuous behaviour.
Loi Sapin II also provides the implementation of the appropriate proceedings for the collection of reporting emitted by the whistle-blowers in the companies of more than 50 employees. The outline of the proceedings were specified by a Decree n° 2017-564 of 19th April 2017, which entered into force on the 1st of January 2018.
The Decree compels the company to appoint an adviser likely to receive the reports and which disposes, by its positioning, of the competence, the authority and the means sufficient for the exercise of its mission. This adviser can be a natural or legal person and not be a stakeholder of the company.
It is also the responsibility of the company to set up a procedure for the collection of reports which must be brought to the attention of all the members of its staff or its agents, as well as its external and occasional collaborators.
This procedure must specify the manner in which the whistleblower addresses his report, provides the supporting elements and communicates with the recipient.
In addition, this procedure must indicate the steps taken by the company to inform the author of the receipt of his report and the reasonable and foreseeable time necessary for its review, the measures taken to ensure the strict confidentiality of the author, the facts and persons concerned, as well as the provisions to allow the destruction of elements which could enable the identification of the author.
Finally, in terms of sanctions, Loi Sapin II provides that any person who obstructs, in any way whatsoever, the transmission of an alert is punishable by one year’s imprisonment and a fine of 15,000€.
II. The publication of a handbook by the MEDEF concerning corporate social responsibility (CSR)
The MEDEF (leading network of entrepreneurs in France) published a handbook in 2017 concerning the declaration of extra-financial performance and the new legal and regulatory provisions.
With regard to CSR, France has transposed European Directive 2014/95/EU of 22 October 2014 on the publication of non-financial information. The MEDEF specifies that this new legislative and regulatory system profoundly modifies the field of companies concerned by extra-financial reporting and information to be communicated.
The MEDEF also indicates that companies must understand and integrate these developments. These constitute the entities concerned, the nature and scope of the information to be produced, the planned verification work, the links between the declaration of extra-financial performance and the other applicable reporting texts.
This new system clearly affirms the search for more relevance and utility for companies and their stakeholders. It is now a question of informing a proactive and tailor-made declaration of non-financial performance, presenting: the business model of the company, the main risks on major non-financial issues (social, environmental, human rights and the fight against corruption), the policies implemented to respond to them and the results of these policies.
With regard to CSR, France has transposed European Directive 2014/95/EU of 22 October 2014 on the publication of non-financial information. The MEDEF specifies that this new legislative and regulatory system profoundly modifies the field of companies concerned by extra-financial reporting and information to be communicated.
The MEDEF also indicates that companies must understand and integrate these developments. These constitute the entities concerned, the nature and scope of the information to be produced, the planned verification work, the links between the declaration of extra-financial performance and the other applicable reporting texts.
This new system clearly affirms the search for more relevance and utility for companies and their stakeholders. It is now a question of informing a proactive and tailor-made declaration of non-financial performance, presenting: the business model of the company, the main risks on major non-financial issues (social, environmental, human rights and the fight against corruption), the policies implemented to respond to them and the results of these policies.
