UPDATE: Please be informed, that the Germen Whistleblower Protection Act has been published in the Federal Law Gazette und will be effective on 2nd July 2023.
On 12th May 2023, the German Bundesrat passed the Whistleblower Protection Act. This law implements the EU Whistleblower Directive (Directive (EU) 2019/1937), which came into effect on 16th December 2019. The Whistleblower Protection Act will enter into force in Germany four weeks after publication in the Federal Law Gazette, presumably in mid-June 2023.
In the following, we will show you whether you are affected by the new German law on the protection of whistleblowers, how you can best implement the requirements in practice and how we can support you in doing so.
Background
The EU Whistleblower Directive was prompted by several incidents (including the Facebook data leak and the Panama Papers) that were brought to public attention by whistleblowers. Whistleblowers are often the first to learn of wrongdoing within their organization and can help detect and prevent harm by reporting such incidents. However, whistleblowers are often reluctant to report concerns for fear of retaliation or negative consequences. In addition, the protection of whistleblowers within the European Union has been inconsistently regulated at national level. The EU Commission saw these circumstances as an opportunity to protect such individuals, and initiated a legislative proposal in April 2018.
The German legislator missed the deadline for transposition into German law, by the end of 2021, and has now belatedly adopted the proposal after the EU has already initiated infringement proceedings.
The EU-wide rules create a framework for whistleblowers to report possible breaches in confidence and through easily accessible reporting channels without fear of retaliation or negative consequences. The Directive also aims to serve the public interest at European level in order to prevent harm or threats that might otherwise go undetected. It is also intended to protect whistleblowers from liability (whether civil, criminal or administrative), to bring to light or prevent infringements and, as a result, to improve law enforcement throughout the EU.
Requirements of the German Whistleblower Protection Act
In transposing the EU Directive, the German legislator has now provided that natural persons who have obtained information about infringements in the course of their professional activities or in advance may pass this information on to an internal (within their organization) or external reporting office (Federal Office of Justice). The internal reporting office can either be operated by the organization itself (e.g. by a delegated employee or a department) or by an external third party. The whistleblower is free to choose which office to approach.
Companies with more than 250 employees will be required to establish and operate such internal whistleblowing offices immediately (presumably in June 2023, when the law comes into force). Smaller companies with more than 50 employees (and up to 249 employees) have time until 17th December 2023. Certain sectors, such as investment services companies, have this obligation regardless of the number of employees.
Notifications may be made orally, in writing or in person. The internal unit must acknowledge the whistleblower within seven days and inform him within three months of how the report has been dealt with.
To ensure the standard of protection for whistleblowers, the Whistleblower Protection Act stipulates that reprisals (warnings, disciplinary measures, etc.) against whistleblowers are prohibited.
Opportunities
However, the purpose of the law is not only to protect whistleblowers, but also to take into account the interests of companies. The hoped-for increase in whistleblowing via trustworthy internal whistleblowing bodies also offers companies themselves the opportunity to address previously unknown grievances in a targeted and efficient manner. In this way, companies can check and react to information already received before the public learns of violations. This avoids damage to their image and the public interest.
Sanctions
If companies violate the basic requirements of the law (e.g. the establishment of an internal reporting office or the prohibition of retaliation), they will be punished as administrative offenders with a fine of up to 50,000 euros.
Conclusion and practical implications: What companies need to be aware of going forward
Companies with 50 to 249 employees have until 17th December 2023 to implement the Whistleblower Protection Act. Due to the complexity of the implementation, it is advisable to start the necessary processes now. Companies with 250 or more employees will have to implement the law immediately after it comes into force, so instant action is required.
When planning the timeframe, the following points should be considered, among others:
- If your company has a works council, remember that it has co-determination rights in the implementation of the law.
- In the case of groups, it is advisable to set up a group-wide internal reporting office.
- You should also check whether your company already has an internal reporting office that only needs to be adapted to the requirements of the Whistleblower Protection Act.
The Whistleblower Protection Act poses certain challenges in its implementation. However, it also offers opportunities for companies once it has been successfully implemented.
We are at your side - with expertise and the right technology
With us at your side, the implementation of the Whistleblower Protection Act will have no impact on your human resources and will be quick and easy, allowing you to focus on your core business and strategic issues.
We advise you on the requirements for your company and implement them both legally and technically, using software (platform) that is easy for you and your employees to use and that we set up for you. We help you to establish your internal reporting office in compliance with all legal requirements and then maintain it as a neutral third party - quickly, easily and with little effort. As part of the implementation process, you will be supported every step of the way by our trained experts, who will integrate seamlessly into your organization with tact and sensitivity. To find out more about our software-based expert witness solution, please contact us. Our lawyers will guide you along the way, providing you with expertise, a love of technology and a passion for turning challenges into opportunities.
