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Japan: Amendments to WPA expand scope of whistleblower protection

The Consumer Affairs Agency announced, on 15 June 2020, the promulgation of the Bill to partially amend the Whistleblowers Protection Law ('the Amendments').

Doomu / Essential collection / istockphoto.com

In particular, the Amendments make it easier for businesses to report to administrative agencies and increases whistleblowers' protection by providing additional protection for callers as well as expanding such protection to employees that have retired within the past year. Moreover, the amendments exempt whistleblowers from civil liability for damage caused to organisations by their reporting. The Amendments will enter into effect within two years of promulgation.   

Scope of applicability

Hiroyuki Masuda, Lawyer at One Asia Lawyers Group, told OneTrust DataGuidance that, "The scope of whistleblowers protection will be expanded. Under the current Whistleblowers Protection Act (Act No. 122 of 18 June 2004) ('WPA'), only workers (as defined in Article 9 of the Labour Standards Law (Law No. 49 of April 7, 1947 amended through Law No. 107 of 9 June 1995) during his/her tenure is protected as a whistleblower. According to the Amendments the scope of whistleblowers who will be protected under the WPA will be expanded to include workers who [have] retired (where a period of one year has not elapsed from the day on which he/she retired) and officers (including directors, executive officers, accounting advisers, company auditors, and liquidators)."

Impact on businesses

The Amendments introduce new requirements for organisations including, the mandatory establishment of reporting mechanisms for whistleblowers, the expansion of reportable facts subject to whistleblowing, and a new duty of confidentiality for employees involved in a company’s whistleblowing reporting mechanism.

Masuda noted that, "The biggest impact on businesses will be that [a] whistleblower will be more protected under the Amendments. [Specifically, whistleblower] protection will be strengthened by:

  • the scope of the whistleblower being expanded (as mentioned above);
  • reportable facts which are the subject of whistleblowing being expanded to include facts which are subject to administrative penalties as well as criminal penalties; and
  • business operators not [being able to] claim damages from the whistleblower on the grounds of such whistleblowing.

[A]nother big change is that the Amendments require business operators to develop systems necessary to ensure the appropriate handling of whistleblowing. [Under the Amendments,] this is a mandatory obligation for business operators which hire more than 300 employees, [however] there [is also an] obligation to 'make an effort' for business operators which hire 300 employees or less. [In addition,] to ensure compliance, the person in charge of handling whistleblowing [reports] and investigations of the reportable facts is obliged to keep confidential information which may identify the whistleblower and which [they have] come to know in the course of such an investigation. [A] breach [of this duty of confidentiality] will [result in a] criminal fine of not more than JPY 300,000 (approx. €2,480)."

Limitations

Masuda concluded that, "Administrative sanctions against business operators which inflict any disadvantageous treatment to whistleblowers will not be introduced in the Amendments. [ Furthermore,] the procedure for whistleblowing to the administrative organ with the authority to impose dispositions or recommendations, will be eased under the Amendments."

Keshawna Campbell Privacy Analyst

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Comments provided by:

Hiroyuki Masuda Lawyer

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One Asia Lawyers Group