A bill laying out legal protection for whistleblowers was sent to the Riigikogu for its first reading by the Legal Affairs Committee on Wednesday.
The law will protect people who report "breaches in the areas relating to the largest cash flows, corruption risks, distortions of competition and damages", the parliament said in a press release.
The legislation will make it possible for a whistleblower to report internally or to a competent authority. But the whistleblower must have grounds to believe that the information is true or they could face punishment.
Hindering reporting or retaliation will also penalized.
Currently, there is no common and cross-sectoral whistleblower protection regulation in Estonian law.
Chairman of the Legal Affairs Committee Eduard Odinets (SDE) said the legislation will help companies detect significant breaches and ensure the confidentiality and protection of reporting persons.
"In the future, employees will have the possibility to inform an employer in a secure manner when they see that something is done wrong at the workplace. It is of course possible to report problems now, but the bill will help ensure that breaches can be reported without having to fear loss of work or unfair treatment," Odinets said.
"If a company creates the necessary channels for reporting of breaches, it shows a wish to prevent breaches and eliminate them as soon as possible," he added.
The law will also apply to areas such as public procurements, prevention of money laundering and terrorist financing as well as public health.
In the future, administrative agencies, enterprises having 50 or more workers and municipal agencies will have the obligation to establish internal reporting channels.
The amendment is connected with the EU's whistleblower protection directive of the EU which Member States were supposed to adopt by December 2021.
The bill will be discussed in the Riigiikogu on October 18.
Editor: Helen Wright