The member states of the European Union are subject to the obligation to transpose the EU Whistleblower Directive („EUWD“) into national law by 17 December 2021. The German legislator has missed this implementation deadline, as have many other EU member states. Therefore, many companies face an uncertain legal situation since 18 December 2021, especially those that have not yet implemented a whistleblowing system so far.
Right now, the most pressing questions are as follows:
How should the legal situation be assessed for my company since 18 December? Is the EUWD directly applicable?
EU directives usually only oblige member states to transpose the content of the respective directive into national law, this also applies to the EUWD. An exception to this principle are those provisions of a directive that are to be classified as „self-executing“, as these provisions are directly applicable. These provisions are characterised by the fact that they are formulated in such a clear, independent and unconditional manner that no further transposition acts are required to determine which claims exist under the Directive, as the content of the regulations can already be derived completely from the Directive in these cases. However, this is only applicable to the extent that private legal entities are not affected. In this respect, the standards of the EUWD apply directly “only” to public companies since 18 December 2021.
Are there nevertheless serious risks for companies that have not set up a whistleblowing system?
There are no economic sanctions regarding the EUWD itself for not setting up a whistleblower system that meets the requirements of the Directive. Even if the EUWD does not apply directly in relation to private sector companies for the reasons mentioned, there is still the risk of (judicial) interpretation in conformity with the directive (e.g. employment law provisions in the context of unfair dismissal proceedings), a (legitimate) outflow of know-how due to public reports (especially of trade secrets) as well as the risk of reputational damage.
To whom or what does the scope of EUWD refer?
The EUWD applies to legal entities in the private and public sectors as well as to municipalities with a population of 10,000 or more. However, the obligation to establish internal reporting channels and procedures for internal reporting and follow-up only applies to private-law employers with at least 50 employees. For employers with 50 to 249 employees, the EUWD also provides for an extended deadline for the establishment of internal reporting offices until 17 December 2023. In terms of content, the EUWD stipulates that the reporting channels must be open to all employees of the company. The term “employee” is interpreted broadly in accordance with EU law (e.g. trainees are also included). Civil servants are also included.
What are the protective measures required by the EUWD?
It is a core obligation for companies to (i) protect whistleblowers from reprisals of any kind, directly or indirectly, including threats and attempts; and to (ii) protect the confidentiality of whistleblowers‘ identities. Reprisals in the sense of the EUWD are understood to be all direct or indirect actions or omissions in a professional context which are triggered by an internal or external report or disclosure and which may result in unjustified disadvantage for the whistleblower (e.g. dismissal or suspension, warning, transfer or relocation of tasks, failure to receive promotion, non-approval of further training, social exclusion, mobbing, etc.).
Which reporting channels should be considered for the establishment of an internal whistleblowing system?
The decision on which form of whistleblowing system to set up is at the discretion of the respective company. Different types of reporting channels are conceivable in principle. For example, in addition to the technical and web-based whistleblowing systems, a designated e-mail address, telephone number or mailbox can also be considered as a reporting channel, although the design is quite challenging, among other things due to the requirements for confidentiality and feedback. A face-to-face meeting with the unit operating as an internal reporting office must also be made possible at the whistleblower’s request.
Is the works council to be involved in the establishment of a whistleblowing system and the clarification of reports?
As a rule, the works council has a right of co-determination in the implementation of a whistleblower system. Therefore, the whistleblower system may not be introduced without the prior consent of the works council. In corporate groups or groups of companies, the competence of the group works council, the central works councils and/or the local works councils must be carefully examined and, in case of doubt, delegation decisions must be sought.
Is it sufficient in corporate groups to grant employees of subsidiaries access to centrally established whistleblowing systems?
This is currently one of the most strongly debated organisational issues. According to the EU Commission, which expressed its opinion on this issue in the summer of 2021, a group-wide central whistleblower system at the parent company does not constitute a permissible division of resources. This means that subsidiaries that fall within the scope of application due to their number of employees must (additionally) set up their own decentralised whistleblower system. It is eagerly awaited how the German legislator will react to this.
What is the new government’s view on the protection of whistleblowers?
The coalition agreement specifically states on the subject of whistleblowing: “We will implement the EU Whistleblower Directive in a legally secure and practicable manner. Whistleblowers must be protected from legal disadvantages not only when reporting violations of EU law, but also material violations of regulations or other material misconduct, the disclosure of which is in the special public interest. We want to improve the enforceability of claims for reprisals against the wrongdoer and are looking into counselling and financial support schemes for this purpose.”
It should be highlighted that:
- The material scope of application of a transposition law is likely to extend not only to violations of EU law but also to violations of national law, especially those that are subject to criminal penalties or fines,
- Financial support offers should be examined, i.e. financial incentives for potential whistleblowers (compensation?) should be considered.
