The law added a section to the Labor Code on the protection of employees against corruption, influence and the misuse of privileged information.   Employees who report a colleague’s misconduct to the employer or wrongdoing by the company to the competent authorities may face retaliation up to a dismissal. However, according to this law, an employer cannot retaliate against the person who has filed a complaint or informed the employer of wrongdoing.

Assuming that an employee is the victim of an adverse reaction by its employer, the employer bears the burden of proof to justify that this adverse reaction is factually justified.

Protection against dismissal

An employee cannot be a victim of retaliation because of his/her protests or refusal to a fact that he/she considers, in good faith, as being constitutive of illegal interests, corruption or influence, and that is committed by his/her employer or any other senior in rank, colleagues or external people connected to the employer (article L.271-1(2) of the Luxembourg Labor Code).

Any termination of the employment contract because of whistle-blowing is therefore null and void and may lead to re-hiring within the company. The dismissed whistle-blower can alternatively claim for damages for abusive dismissal.

Can the whistle-blower be anonymous?

In Luxembourg, the  data  protection agency issued recommendations on whistle-blowing based on the WP29 guidelines and discourages anonymous denunciations to better protect the authors of the alarms. Best practices in the financial sector In December 2012, the Luxembourg Financial Sector Supervisory (CSSF) issued a Circular 12/5526 applicable from 1 July 2013 amending the corporate governance practices.

One of the key requirements of the circular is the implementation of a whistle-blowing procedure that must offer the opportunity for any staff member to raise important and legitimate concerns on risks and governance issues outside the hierarchical reporting lines, up to the board of directors.

The whistle-blowing procedure shall protect the confidentiality of the whistle-blowers and reports should be made in good faith and should not be exposed to any sanction, backlash or detrimental consequence.

Therefore, companies regulated by the CSSF must comply with the circular and its standards regarding whistle-blowing.  Other companies have no obligation but should implement an ethics policy, including whistle-blowing rules based on current Luxembourg regulations.