Switzerland potential whistleblower legislation
2 January 2023

The term ‘Whistleblowing’ refers to the reporting of any wrongdoing and/or misconduct that includes unethical behavior, fraud, corruption, mismanagement, cronyism, abuse, bribery, racism, intimidation, harassment, crime, etc. within organizations. These defects, which are also ubiquitous in our society, can devalue the reputation of an organization if left concealed and untreated. The notion and practice of combating wrongdoing and misconduct have been on the rise in business organizations. The employees are most likely to be the first ones to witness wrongdoing and/or misconduct in the organizations, hence it is very important for the organizations to have a ‘complaint management system’ in place and to make sure that the employees who want to lodge complaints against any wrongdoing and/or misconduct in the organizations have all the necessary support. It will not be wrong to say that it becomes a moral obligation for the employees to report any wrongdoing and/or misconduct in the organization that they have witnessed and/or become aware of.

Trends of Whistleblowing in Business

Whistleblowers are often found to be an invaluable part of the process of detecting crime and complying with relevant legislation. It was found in research conducted by PricewaterhouseCoopers, that “professional auditors only detected 19% of fraudulent activities at private corporations, while whistleblowers detected and exposed 43%.” This study also reveals that ‘whistleblowers saved their shareholders billions of dollars’. A study named ‘Who Blows the Whistle on Corporate Fraud’ by the University of Chicago Booth School of Business, unveils the same kind of outcome which states ‘‘employees clearly have the best access to information. Few, if any, fraud can be committed without the knowledge and often the support of several of them. Some might be accomplices…but most are not.’’

Though business organizations of modern days tend to have whistleblower policies, however, they might, at times, seem very inadequate to support whistleblowers where they would be propelled to lodge complaints voluntarily against any wrongdoing and/or misconduct in the organization. It is therefore very important to have an apt and robust legal framework for whistleblowers in place, which would obligate the organizations to construct a practice of whistleblowing in their organizations. Many jurisdictions have a sufficient legal basis for whistleblowers, however, many still lack. As of 2020, ‘laws as regards whistleblower protection have been enacted at least 59 countries’. The idea of legislating whistleblower laws is to ‘incentivize whistleblower disclosures and protect whistleblowers from retaliation’.

Whistleblowing Legislation in Switzerland

It is very disconcerting that whistleblowers in Switzerland are not protected by law. There are currently no legislative provisions in Switzerland that protect whistleblowers from retaliation. In fact, the existing laws have been shaped in a way that intimidates employees to raise their voices against any wrongdoing and/or misconduct in the organization, as it has been enunciated in Article 321a Para 4 of the Swiss Code of Civil Obligations that “For the duration of the employment relationship the employee must not exploit or reveal confidential information obtained while in the employer’s service, such as manufacturing or trade secrets; he remains bound by such duty of confidentiality even after the end of the employment relationship to the extent required to safeguard the employer’s legitimate interests”.

One might argue that this legal provision does not patently say anything against raising one’s voice against the wrongdoing and/or misconduct in the organization, however, the counterargument could be that such enunciation of the law does not manifestly immune whistleblowers either. One may reckon that the latter overrides the former because there are no laws in Switzerland that shield whistleblowers against any unwarranted consequences. There is, however, an interpretation of this Article, which says exceptions to this Article are “only allowed if the public interest in disclosing the information is deemed higher than the interest of the employer in keeping the information a secret”. However, it is still not clear as to which particular disclosures would be deemed to be serving the public interest. The absence of a legal framework for whistleblowers has reached a worrying point in Switzerland as it has been ‘estimated that more than 95% of the cases of corruption are unreported’.

Though several attempts have been made to legislate a framework for whistleblowers in Switzerland, none of them was successful. It is hoped that the Swiss Federal Assembly shall understand the significance of a legal framework for whistleblowers and legislate one in the near future.