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EU Member States need to implement Directive (EU) 2019/1937 on the protection of persons who report breaches of Union law, the so-called “Whistleblowing Directive”, by 17 December 2021. The German Federal Ministry of Justice and Consumer Protection has now prepared a draft bill for a "Law for the Better Protection of Whistleblowers and for the Implementation of the Directive on the Protection of Persons Reporting Breaches of Union Law" (the so-called “Whistleblower Protection Act” – Hinweisgeberschutzgesetz) (the “draft bill”). The draft bill aims to expand the hitherto incomplete protection of whistleblowers and create legal certainty for them.
Scope
The draft bill extends to so-called whistleblowers, i.e. natural persons who have obtained information about violations in connection with their professional or official activities, and report or disclose these to the reporting offices provided for in the draft law. The personal scope of application is broad and includes not only employees but also other groups of persons, such as the self-employed, volunteers and members of corporate bodies. According to the explanatory notes of the draft bill, whistleblowers whose employment relationship has been terminated, as well as persons whose employment relationship has not yet begun and who have obtained information about violations during the hiring process or other pre-contractual negotiations, are also included in the scope of application.
In addition, persons who are the subject of a report or disclosure or who are affected by the report or disclosure are also to be protected. This is to ensure that the identity of such persons is protected and that applicable procedural rights are not restricted.
As regards the material scope of application, the draft goes beyond the Directive. It includes criminal law and the law on administrative offences as well as certain other areas of law, such as public procurement, combating terrorist financing, product safety, traffic safety, environmental and radiation protection, renewable energies, food and feed safety, consumer protection, protection of privacy and personal data, as well as security of network and information systems.
Establishment of reporting offices
Two reporting channels (internal and external) are provided for whistleblowers, which are of equal value and between which whistleblowers can freely choose:
Disclosure of information
A whistleblower who comes forward with information about violations and discloses it to the public should only be protected if they have either made an external report and not received feedback within the set time limits, or if they have reasonable grounds to believe that there is a threat to the public interest, that the external reporting channel is not working, or that there is a risk of retaliation if the external reporting channel is followed.
Protective measures
In order to protect whistleblowers from retaliation such as mobbing, discrimination or dismissal and provided the relevant conditions are met, the following protective measures are available:
However, there are also limits to whistleblower protection. For example, anyone who does not have a sufficient reason to believe that the facts reported or disclosed are true, will not be protected. In addition, the whistleblower is obliged to compensate for any damage resulting from a deliberate or grossly negligent report or the disclosure of incorrect information.
Sanctions
Violations of the main provisions of the draft law are punishable as administrative offences. This applies to the obstruction of reports and taking of retaliatory measures (for which fines of up to 100,000 euros are possible), as well as failing to fulfil obligations to provide information to an external reporting office and breaching the duty to keep the identity of a whistleblower confidential (for which fines of up to 20,000 euros are possible).
Companies should continue to follow the implementation process closely. The draft bill is expected to be dealt with by cabinet at the end of March and then go through the parliamentary procedure; the planned conclusion of the procedure is at the end of June 2021. It remains to be seen whether this timetable will be adhered to, especially since the question of "overreaching implementation" is said to remain controversial within the coalition.
However, companies would be well-advised to be prepared for the fact that, in principle, there will be an obligation to set up internal reporting channels from 17 December 2021. Businesses will need to ensure that their reporting systems are operating effectively and in compliance with the various legal requirements, particularly those relating to employment law and data protection. Any existing reporting systems should also be reviewed and revised if necessary. The draft bill provides for a transitional arrangement for small and medium-sized enterprises with a usual headcount of 50 to 249 employees, for which the obligation will only apply from 17 December 2023. Nonetheless, the Whistleblower Protection Act will inevitably lead to a need for action for many companies.
30 March 2021
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