Whistleblowing – or the protection of whistleblowers – is currently governed by Directive (EU) 2019/1937 of the European Parliament and of the Council from 23 October 2019 on the protection of persons who report breaches of Union law (the Whistleblowing Directive) (“Directive”) and the Member States of the European Union are obliged to transpose it into national law by 17 December 2021. In this article, we summarize an overview of the current regulation, as brought by the bill on the protection of whistleblowers which was approved by the government and submitted to the Chamber of Deputies of the Parliament of the Czech Republic on 9 February 2021.
In general
The aim of the bill on the protection of whistleblowers is to transpose the Directive and to introduce protection for persons who report breaches in certain areas of which they have learned in connection with their work. Protected persons should include, for example, employees, persons on duty, self-employed persons, volunteers or interns.
General information on whistleblowing can be found in our previously published articles: Protection of whistleblowers in the Czech Republic (available here), Directive on the protection of whistleblowers (available here) and Whistleblowing in the light of privacy (available here).
Retaliatory measures in the field of labour law
In the Czech Republic, according to information from the explanatory memorandum to the bill, there is still a rather negative attitude towards whistleblowers. The principle of protection of whistleblowers is, above all, the prevention of so-called retaliatory measures as a result of their notification.
For this reason, too, the bill lists retaliatory measures against which whistleblowers are to be protected. Retaliation measures should include, but are not limited to, dismissal, disciplinary action or disciplinary action, reduction of pay, discrimination, transfer to another job or place, and change of working time schedule. The person who shall provide the assistance to the notifier should not be able to be subject to retaliation; a person who should be close to the notifier or a person who should be an employee or colleague of the notifier.
Obliged entities and internal notification system
One of the most significant changes introduced by the bill on the protection of whistleblowers is the expansion of the range of entities that should be obliged to introduce an internal notification system. In the original bill, the obligation was included for all employers who have more than 50 employees, but in the bill approved by the government, this obligation should be introduced for all employers with more than 25 employees.
In addition, contracting authorities should be also obliged entities, with the exception of municipalities with less than 5,000 inhabitants, public authorities exercising powers in the area of corporate income tax administration or administration of levies for breaches of budgetary discipline, etc.
The obliged entities should ensure the establishment and functioning of the internal notification system and designate a competent person to receive and assess the validity of the notification made through the internal notification system.
Obligations of obliged entities should include, in particular, that information on methods of notification through the internal notification system and the ministry of justice, the identification of the person concerned, his or her telephone number and e-mail or other delivery address be published in a remote access manner for proper instruction to the person concerned; to allow the notifier to submit a notification through the internal notification system in writing and orally and at his or her request in person.
According to the proposal, the deadline for the introduction of the internal notification system is currently set until 31 March 2022.
Duty of confidentiality
The bill on the protection of whistleblowers introduces an exception to the breach of the contractual and legal obligation of confidentiality. According to the bill, if the notifier should have legitimate reasons to believe that the notification was necessary to detect the infringement, the notification is not considered illegal for breach of bank secrecy, contractual confidentiality obligations, confidentiality obligations under the Tax Code or confidentiality obligations under other legislation governing work or other similar activity.
However, this exception should not apply to classified information, confidentiality of notaries, lawyers, judges and confidentiality in the provision of health services.
Ministry of Justice and Whistleblower Protection
In matters of whistleblower protection, the Ministry of Justice (or its whistleblower protection unit) should be responsible for receiving notifications under the bill, providing advice in connection with the establishment of an internal notification system, completing methodologies and information for the public, training activities, control of compliance with the obligations of obliged entities that are not employers and conducting certain infringement proceedings.
Offenses and fines
According to the bill on the protection of whistleblowers, whistleblowers, relevant authorized persons and obliged entities may commit an offense.
It should be possible to impose a fine to whistleblowers of up to CZK 50,000 for false notification. The offenses of the relevant authorized persons should include refusal to accept the notification or failure to inform the notifier of the outcome of the assessment of the notification.
Obliged entities should be able to commit an offense, for example by not preventing the notifier from retaliation, by not designating the authorized person, by not ensuring that information on methods of notification through the internal notification system is published in a remote access or by not properly assessing the merits of the notification by the authorized person. Fines for offenses could be imposed up to CZK 400,000 and for some offenses up to CZK 1,000,000, the fine could also be determined as a percentage of the net turnover achieved by the liable entity for the last completed accounting period (3% or 5%).
Conclusion
The bill on the protection of whistleblowers must now pass the Chamber of Deputies and the Senate and should be adopted by 17 December 2021 at the latest, when the deadline for transposition expires. The current bill also expects to take effect on 17 December 2021.
We will continue to monitor the development of the legislative process and we will inform you about any changes and the procedure.
If you have any questions, do not hesitate to contact us.
Tereza Pšenčíková, LL.M. – junior lawyer
Mgr. Jakub Málek – partner
23. 02. 2021