The legal framework on whistleblowing and protection of whistleblowers is a developing area in the UAE. At present, there is no express provision in UAE law that defines whistleblowing except in the Abu Dhabi Global Market. Generally, however, whistleblowing is a disclosure of (often confidential) information that is usually made by an employee or an ex-employee of an organisation that exposes illegal or unethical practices within that organisation.
In the UAE (except in the Dubai International Financial Centre and the Abu Dhabi Global Market), there is no overarching law that governs whistleblowing or deals with the protection of whistleblowers. However, there are some federal and emirate-specific legal mechanisms that can be construed as offering some level of protection which extends to whistleblowing as we explain below.
On a federal level, UAE Penal Code provides for a positive obligation for all individuals to report criminal conduct. However, in practice, it is rare for an employee to make a protected disclosure about their employer to the authorities. This is because all employees are under a statutory obligation to maintain confidentiality in their employment. As such, in the event a whistleblower discloses confidential information about their employer to any regulatory authorities or even to the UAE Police, not only could they be in breach of their employment contract but they may also be in breach of the UAE Penal Code. Consequently, the employer could take action against the whistleblower personally, potentially resulting in police investigations and even criminal proceedings.
The obligation to report criminal conduct also extends to companies. For example, where an employee makes a protected disclosure to the company, that company has an obligation to report it to the relevant authorities. Again, this obligation does not tend to be proactively enforced.
All employees are under a statutory obligation to maintain confidentiality in their employment.
The UAE Labour Law and its accompanying executive regulations include a provision on unlawful termination which may be construed as providing some level of protection for whistleblowers. Article 47 of the Labour Law provides that termination of an employee’s services by the employer is illegal if the termination of the employee was due to filing a serious complaint to the Ministry of Human Resources and Emiratisation, or filing a case against the employer that has been proven to be true. If the Labour Court deems a termination to be unlawful, the Court may award an employee compensation of up to 3 months’ total salary.
In 2016, the Dubai Government implemented the Financial Crimes Law, which offers protection against discrimination or mistreatment in the workplace for those who report financial crimes. Reporters will not be considered to be in breach of any obligations and will not be subject to any legal or disciplinary action unless their report is false.
In a contrasting position, the Dubai International Financial Centre (‘DIFC’) has implemented the DIFC Operating Law, which governs whistleblowing protection in the DIFC. It applies to any person operating or conducting business in or from the DIFC. Under the Law, a person who makes a disclosure of information to the DIFC Registrar of Companies, the relevant DIFC entity’s auditors or to a director or officer of the DIFC entity itself, is entitled to protection.
The disclosure must include the identity of the person making the disclosure, relate to a reasonable suspicion that the DIFC entity has contravened the Operating Law or other regulations or legislation, and must be made in good faith. The Operating Law provides that those making good faith disclosures in accordance with the law shall not, as a result of making the disclosure, be subject to any legal or contractual liability, be liable for any other contractual, civil or other remedy, and/or be dismissed or otherwise subject to a detriment by the employer. Any act in contravention of these provisions may result in a fine of USD 30,000.
Additionally, the Dubai Financial Services Authority (‘DFSA’), which is the DIFC regulatory body, has launched a regulatory regime for whistleblowing which applies to all DFSA regulated entities operating in or from the DIFC. The regime provides enhanced legal protection for persons who report misconduct internally in DFSA regulated entities or externally to their auditor, the DFSA or a law enforcement agency. The regime requires all DFSA regulated entities to put in place measures to protect the identity of the whistleblower and to protect them from suffering any detriment.
At the end of 2022, the Abu Dhabi Global Market (‘ADGM’) published its own whistleblowing guidelines for ADGM entities (the ‘ADGM Principles’) which are intended to help ensure that whistleblowers are given adequate opportunities to speak up and are fairly treated when doing so.
Whistleblowing is broadly defined in the ADGM Principles as ‘the reporting of suspected wrongdoing to someone in authority’. A whistleblower is ‘the person who makes the report[, who] might be part of the relevant organisation (such as an employee) or an external third party’. Where protected disclosures are made, ADGM entities are required to ensure that appropriately independent, skilled professionals are involved in assessing and managing whistleblowing reports.
Internal channels for raising issues within an ADGM entity should be provided and communicated clearly to staff and, where appropriate, third parties. External channels for whistleblowing should also be identified and clearly communicated to staff.
Although no express mechanisms for the protection for whistleblowers have been set out in the ADGM Principles, they do confirm that protection should be afforded to whistleblowers who make reports in good faith and that preservation of confidentiality should be afforded.
Practically, there are still challenges that exist concerning whistleblowing in this region. This is due to the cultural and legal implications that affect the making of an initial disclosure right up to how enforcement measures are taken.
From an individual’s perspective, there is often a concern that a disclosure may lead to disciplinary action and/or dismissal (in addition to the potential criminal ramifications mentioned above). The impact of termination of employment may not only impact an individual’s financial position and their ongoing employment, but could also affect their residency status in the UAE. This is the case for employees whose UAE residence visa is sponsored by their employer as the termination of their employment will result in their sponsorship being cancelled.
Although the embedding of whistleblowing protections is on the rise, the challenge historically and, to a lesser extent, presently, is that there is a limited ‘speak up’ culture encouraging individuals to make a disclosure. There can be reputational risks associated with reporting wrongdoing to the authorities for both the individual and the organisation. In circumstances where a disclosure is subsequently publicised, this could also amount to criminal defamation under the UAE Penal Code.
It is good practice to create an open, transparent and safe working environment where employees feel able to raise concerns without fear of retribution or retaliation.
Given that the UAE is continuing to take progressive steps towards ensuring better whistleblowing protections, it is recommended that employers have adequate procedures to deal with whistleblowing internally.
Despite the limitations mentioned above, many multi-national employers in the UAE operate whistleblowing hotlines which enable employees to report suspected or actual misconduct.
Many employers will implement a confidential reporting channel allowing employees to make protected disclosures, coupled with a whistleblowing policy which sets out how a protected disclosure can be made (including the details of any hotline established) as well as the process once the disclosure has been reported.
As an employer, it is good practice to create an open, transparent and safe working environment where employees feel able to raise concerns without fear of retribution or retaliation. Although the law does not require employers to have a whistleblowing procedure in place, the existence of one demonstrates an employer’s commitment to listen to and act on the concerns of its employees.
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