Internal corporate investigations in Poland: key aspects, specificity

Janusz Tomczak,
Raczkowski Sp.k., Warsaw, Poland
janusz.tomczak@raczkowski.eu

Ewelina Rutkowska
Raczkowski Sp.k., Warsaw, Poland
ewelina.rutkowska@raczkowski.eu

Introduction

In Poland internal investigations are conducted pursuant to various legal provisions and in accordance with established business practices. They are most frequently encountered in international corporations and their Polish subsidiaries. Internal investigations are still a virtually unknown concept among homegrown businesses domiciled in Poland.

Legal framework

Internal investigations are not regulated by one specific law. Rather, there are multiple legal regimes forming the grounds for launching internal investigations: labour law, commercial and criminal law, financial markets regulations, etc. Labour law has a special role to play in internal investigations in the workplace because it affords strong protections to the privacy of employees and the duration of their employment contracts. The sparing regulations merely form general grounds for conducting internal investigations without giving any specific instructions on how they should be managed.

This situation may change once the Directive on the Protection of Persons Who Report Breaches of European Union law (the ‘Whistleblowing Directive’) is implemented.^[1] Entities with more than 50 employees will be obliged to carry out follow-up actions if they receive a notification about the potential violation of (selected) EU law regulations. Internal investigations are one of the types of follow-up actions. The Directive specifies the duration of internal investigations and regulates the basic rules for communicating with a whistleblower. However, these provisions have not yet been implemented in Poland.

At present, investigators unilaterally select which particular investigative activities to employ. In practice, the investigator role is usually played by one of the following entities:

• internal security departments dealing with reported or detected irregularities; or
• external service providers such as law firms, forensic accounting firms and private investigators.

Non-prosecution agreements

Since Poland lacks an effective corporate criminal liability regime, internal investigations are not perceived as a means of mitigating a company’s criminal liability risk. Since they do not face any genuine risk of liability, Polish corporates are not compelled to conduct internal investigations for the purpose of entering into a settlement with law enforcement.

Investigative activities

Internal investigations may pertain to many different matters that are often complex and multifaceted such as corruption and commercial fraud. They may also focus on the softer aspects of business activity involving human relations: bullying, harassment, etc. For this reason, the objectives of a specific internal investigation, the activities conducted, and the measures taken to redress them may vary. In any event, they should be aligned to the nature of the problem.

Witnesses

Witness interviews are one of the most important sources of evidence, regardless of the type of misconduct encountered. It is virtually impossible to interpret the hard data gathered during an investigation without seeking to learn what people have to say about the case in question. Getting to the bottom of the problem almost always involves cooperation not only with employees but also with external parties. Employees, managers, subcontractors, agents and suppliers may play a valuable role in fully investigating a case. The rules of cooperation during investigations vary depending on the type of legal relationships in place with the investigator.

Employees are duty bound to participate in internal investigations. This duty stems from the specificity of employment contracts. Employees have a duty of loyalty and cooperation with their employer. This means that employees must provide explanations during an investigation. The very same rules are applicable to employees suspected of misconduct (potential ‘suspects’).

Employers cannot compel anyone to participate in an investigation. The failure to cooperate, however, may be treated as acting against a company’s interests. Employees who refuse to cooperate in such proceedings, despite their employer’s order, violate their duties as employees. In such instances, disciplinary sanctions may be taken or their employment contracts may be terminated.

Similar rules are applicable to managers. Managers working under a management contract are legally obliged to act in their company’s best interests. Good managers are expected to act reasonably and adhere to this principle. Their mandatory cooperation in investigations is justified because suspicions must be vetted and clarified to protect the organisation and mitigate its legal and reputational risks. Furthermore, it is simply a matter of professionalism.

The situation is entirely different when it comes to third parties. The basis for their cooperation is not rooted in generally applicable legal regulations, but in contractual obligations. Third parties that fail to cooperate are in jeopardy of having their contracts terminated.

Material and electronic evidence

Employers are entitled to secure and review the data stored on any, and all, devices in the workplace. In internal investigations data analysis is often outsourced to forensic experts to avoid any of the possible adverse consequences described below, for example, its integrity.

Risks related to the collection of material and electronic evidence – data protection threats and unfair practices

Special caution should be taken when it comes to processing and protecting personal data. During electronic data reviews, private files and backups from private email accounts are frequently discovered. Employers overstep their rights if the scope of data review covers private files. Furthermore, this may be treated as a breach of personal data protection or a violation of the privacy of their correspondence. Only public authorities are allowed to collect such data. Companies may support the evidence-gathering process by engaging licensed private detectives or investigators who are authorised to collect information pertaining to persons and events to a limited extent.

In practice, we see that companies that have implemented clear policies as to what data can be stored on personal devices turn a blind eye to what their employees store on their mobile phones or the websites they open on their Internet browsers. Later, during internal investigations, managers suddenly develop a voracious appetite to consume all of the content and data available to them. However, this is illegal because employers do not have the same rights as law enforcement.

Confidentiality

Ensuring confidentiality is one of the fundamental tasks for investigators to perform. Discharging this responsibility is a major challenge at present because internal investigations are conducted remotely during the pandemic. Witness interviews are held by video link. Even if rigorous security measures are applied, the risk of recording or uninvited guests participating in them cannot be eliminated. This heightens the risk of data leaks.

Professional privilege

The level of confidentiality of an internal investigation can be raised by engaging external lawyers. All the information gathered, and all the documents produced during investigations are automatically subject to professional privilege. This is important not only for the security of investigative activities, it also determines how the gathered information and evidence can be used in the future. Companies may elect to have the evidence collected during an investigation to be stored by their lawyers and subject to disclosure solely at the request of public authorities after waiving the privilege in a specific procedure in a common court.

Conclusion

The motivations for conducting internal investigations vary. In their most basic form, they constitute an attempt to gather evidence and build a case against the person engaged in some type of breach as a mobber, fraudster, etc. Building an ethical work environment and showing zero tolerance for abuse are crucial to some while protecting the company's interests, image and reputation as well as holding the abusers accountable is critical for others. Internal investigations may also serve as a mean of identifying the weak links in the compliance management system and improving control mechanisms. Since internal investigations in Poland do not face any rigid legal rules, various internal procedures and investigative tactics may be employed depending on the type of a case. The actions taken by organisations must be commensurate to the magnitude of the possible breaches. What is paramount is to adhere to the regulations and ensure the basic guarantees regardless of the subject of an investigation. This means preserving objectivity, confidentiality and integrity.

Note

[1]     Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law, see https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019L1937.