The Whistleblowing Channel in Group companies

The Whistleblowing Channel in Group companies

The recent Italian Legislative Decree n. 24/2023 has implemented the EU directive n. 1937/2019 which provides limits to group companies when adopting a single Whistleblowing Channel for all companies belonging to the same group.

The EU directive n. 1937/2019 has the goal to provide similar legislations in Europe on whistleblowing. The purpose of the EU directive is also to facilitate the compliance of the multinational group companies, so when a Whistleblowing Channel is adopted in an EU country, in theory, it should be also in compliance with the other EU legislations.

Italy, implementing the EU directive with the Legislative Decree n. 24/2023, has strictly interpreted the EU directive as such imposing to multinational group companies to focus on the Italian legislation when adopting the Whistleblowing Channels.

As a matter of fact, group companies normally adopt a single (internal) Whistleblowing Channel for all group companies, where the recipient is frequently the Central Compliance or an Ethic Committee, thus excluding the subsidiaries from the management of the Whistleblowing Channel.

However, art. 4 of the Legislative Decree n. 24/2023 states that “entities in the private sector that have employed, in the last year, an average of no more than two hundred forty-nine employees, under permanent or fixed-term employment contracts, may share the internal reporting channel and its management“.

This means that group companies with fewer than 249 employees are allowed to participate to an internal group Whistleblowing Channel (as sole channel), centrally managed by the holding company. Of course, such group Whistleblowing Channels will require an intercompany agreement among holding company and subsidiaries in order to split the costs of the service.

Group companies employing more than 249 employees, however, are not allowed to participate to an internal group Whistleblowing Channel (as sole channel), shared with other companies (belonging or not to the same group).
Each company with more than 249 employees, therefore, must (also) have its own autonomous internal Whistleblowing Channel.

In order to avoid the risk to be forced to adopt two different Whistleblowing Channels in companies with more than 249 employees (i.e., one autonomous Whistleblowing Channel and an internal group Whistleblowing Channel) the holding company may outsource to external companies the management of the group Whistleblowing Channel.

If a holding company, actually, outsources the group Whistleblowing Channel the above-described limits shall not apply.