Out-Law / Your Daily Need-To-Know

Whistleblowing protections in the UAE

Out-Law Guide | 15 Jun 2021 | 10:10 am | 3 min. read

Laws around whistleblowing and protection for whistleblowers are developing in the United Arab Emirates (UAE) as the country seeks to align its employment legislation with international best practice.

While there is no definition of whistleblowing under UAE law, there are now a number of laws specifically providing for whistleblower protection where certain criteria are met. Most recently, the Dubai International Financial Centre (DIFC) court has sought to clarify the protections available to whistleblowers under the DIFC Operating Law, as well as its own jurisdiction to grant relief where an employer is found to have breached those protections.

What protections are available?

The UAE Penal Code imposes positive obligations on all persons to report crime. However, this reporting requirement is difficult to enforce and does not cover practices or behaviours which are unethical but not necessarily illegal that whistleblowing laws in other jurisdictions are designed to catch.

The different UAE jurisdictions have sought to address this gap in different ways through recent changes to the law.

Whistleblowing in Dubai: Financial Crime Law

The Financial Crime Law (Dubai Law No. 4 of 2016) introduced a degree of whistleblower protection for the first time. An individual making a disclosure will be protected against prosecution and retaliation in the workplace where that disclosure is:

  • true;
  • related to an activity that may affect the economic security of Dubai; and
  • made to the Dubai Centre for Economic Security, the public body established to combat financial crime.

The law expressly states that the individual making the disclosure will be protected against disciplinary action at their workplace and must not be subject to mistreatment or discrimination. In addition, an employee who makes a disclosure to the Centre will not be deemed to be in breach of any non-disclosure or confidentiality agreement signed and entered into with their employer.

We are increasingly seeing employers in the Middle East financial centres adopting formal whistleblowing policies

However, the Financial Crime Law does not protect whistleblowers from liability from the UAE’s criminal laws. In particular, whistleblowers risk falling foul of the UAE’s far-reaching privacy laws should they share confidential company information, however inadvertently, as part of the disclosure.

Whistleblowing in the UAE: Central Bank reporting portal

In June 2021, the Central Bank of the UAE (CBUAE) launched an online whistleblowing portal for reporting misconduct by CBUAE employees, contractors and representatives. Reports can also be made by telephone or in writing, and anonymous reports are permitted.

The portal can be used to report corruption, fraud, undisclosed conflicts of interest and ethical violations by CBUAE personnel, as well as breaches of specific laws and regulations. It can also be used to report violations by entities regulated by the CBUAE, provided that the person making the report did not receive a response through the appropriate regulatory channels.

Whistleblowing in the DIFC: DIFC Operating Law

The DIFC Operating Law (DIFC Law No. 7 of 2018) expressly includes a positive obligation to disclose wrongdoing as well as whistleblower protections. A whistleblower will be protected from being subject to any contractual or civil liability, and from being dismissed from their employment or otherwise suffering any detriment, where a disclosure is:

  • made in good faith;
  • involves a “reasonable suspicion” that an individual or company contravened the DIFC Operating Law, its regulations or any other legislation administered by the DIFC’s Registrar of Companies;
  • contains the identity of the person making the disclosure; and
  • made to a director or other officer of the company, the company’s auditor or a member of the audit team or the DIFC Registrar of Companies.

Where a whistleblower is subjected to any detriment, the employer can be fined $30,000. Additionally, the DIFC courts may make orders for the recovery of “loss or damage”, compensation or any other orders as it sees fit, placing an additional potential financial burden on employers.

The DIFC Court of Appeal confirmed this position in a recent judgment, Bassam Khalifa v SWIFT (Dubai) Ltd. Khalifa had made five disclosures in respect of allegedly fraudulent activity, all dated before the Operating Law came into force. He was later dismissed by SWIFT. Although the Court of Appeal dismissed Khalifa’s claim for compensation on the grounds that the Operating Law does not have retrospective effect, it did affirm the courts’ power to grant relief.

Whistleblowing in the ADGM

Currently, there are no formal protections available to whistleblowers in the Abu Dhabi Global Market (ADGM), Abu Dhabi’s equivalent of the DIFC.

What should employers do?

We are increasingly seeing employers in the Middle East, particularly in the DIFC and ADGM financial centres, adopting formal whistleblowing policies and including provisions in employment contracts requiring employees to report any wrongdoing they become aware of during their employment.

Your whistleblowing policy should clearly set out, in detail, how to escalate a disclosure internally of suspected unethical or illegal processes within the organisation. Dedicated internal whistleblowing ‘hotlines’ are increasingly popular. The policy should also cover the legal requirements of a protected disclosure, as these may differ from other jurisdictions in which multinational employees have worked. For example, the DIFC requirements of good faith and employee identification should be emphasised.