Status of the legislative process
With the Whistleblower Directive of 23.10.2019, the European Union has for the first time generally regulated the protection of persons who report violations of Union law. The Directive contains various requirements for internal and external reporting by employees and, in particular, provides for the obligation to set up internal and external reporting channels. The deadline for implementing the directive expired on 17.12.2021.
The requirements of the Whistleblower Directive are to be implemented by the Federal Government's "Draft Act for Better Protection of Whistleblowers and for the Implementation of the Directive on the Protection of Persons Reporting Breaches of Union Law", but also go beyond this (BT-Drs. 20/3442). On 16.12.2022, the Bundestag passed the Whistleblower Protection Act with significant amendments. As the law requires the approval of the Bundesrat and will not enter into force until three months after its promulgation, the Whistleblower Protection Act is expected to enter into force in the course of 2023.
Overview of the subject matter
The Whistleblower Protection Act contains two core elements:
Firstly, employers are placed under an obligation. Employers are natural persons as well as legal entities under public and private law, partnerships with legal capacity and other associations with legal capacity, provided at least one person is employed by them. These include municipalities, limited liability companies and public limited companies. For certain employers, the draft law regulates an obligation to set up reporting offices to receive information. This initially applies to employers with at least 50 employees. Regardless of the number of employees, the obligation also applies to financial institutions, for example. The internal reporting offices operate reporting channels, manage the procedure and take follow-up measures. The compliance costs for the establishment of internal reporting offices in the economy are expected to amount to 190 million euros. At the same time, the federal government must set up external reporting offices to receive reports. The federal states can also set up external reporting offices for reports concerning the respective state and local administrations.
The protection of whistleblowers will also be regulated. The legal situation, which has been unclear for decades, is to be improved by the Whistleblower Protection Act. This gives whistleblowers the right to choose whether to pass on information about internal irregularities to an internal or external reporting office. Disclosures to the public are only permitted under certain conditions. At the same time, whistleblowers are comprehensively protected against reprisals.
The scope of the draft law is far-reaching. It includes, for example, reports and disclosures of information on violations subject to criminal sanctions and, in some cases, fines, environmental protection violations or violations of product safety regulations. The draft law therefore goes beyond the requirements of the Whistleblower Directive. Violations of the planned Whistleblower Protection Act can be punished with fines of up to €100,000.
Effects
At the instigation of the European Union, the law will primarily establish obligations for employers. Employers will be actively required to prosecute violations of the law. Whether this will be successful remains to be seen, especially as the corporate culture in Germany - unlike in other countries - is cautious towards whistleblowing.
Employers should be aware that according to the draft law, trade and business secrets may also be disclosed under certain conditions. The establishment of an effective and employee-friendly whistleblowing system can promote a corporate culture that prevents premature reporting to the general public and irreparable reputational damage. Seminars in which the rights and obligations of employees are explained can also contribute to this.
The implementation of the law can therefore also be seen as an opportunity to effectively counteract internal grievances.
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